Pacific Gas & Electric Corp. (PCG) - Get Report said Thursday it took at $10.5 billion charge linked to last year's deadly California wildfires and cautioned that there is "substantial doubt" over the utility's prospects as a going concern.
In a filing to the Securities and Exchange Commission, PG&E said it has booked total charges of $14 billion from the Northern California fires and won't be able to provide operating earnings guidance for 2019 as the company faces "extraordinary" near-term challenges, However, it said it sees a full-year after tax loss of between $670 million and $907 million.
"We recognize that more must be done to adapt to and address the increasing threat of wildfires and extreme weather in order to keep our customers and communities safe," said interim CEO John Simon. "We are taking action now on important safety and maintenance measures identified through our accelerated and enhanced safety inspections and will continue to keep our regulators, customers and investors informed of our efforts."
PG&E shares fell 4.5% to close at $17.03 following the news.
"The company is facing extraordinary challenges relating to the 2018 Camp Fire and 2017 Northern California wildfires. Management has concluded that these circumstances raise substantial doubt about PG&E Corporation's and the Utility's ability to continue as going concerns," the company said.
Last November, PG&E warned investors that it faced "significant" liability, over and above its insurance capacity, if its equipment was found to have started the deadly Camp Fire that started in the city of Paradise and spread through much of Northern California, killing at least 86 people and causing billions in economic and environmental damage.
Last month, PG&E's board of directors said it was "actively assessing PG&E's operations, finances, management, structure, and governance -- and remains focused on improving safety and operational effectiveness," in addition to the prior actions it had taken to "confront the growing wildfire threat."
The California Public Utilities Commission said in late December it was investigating PG&E's role in falsifying data related to the safety of its natural gas pipelines.
"Utility falsification of safety related records is a serious violation of law and diminishes our trust in the utility's reports on their progress," the Commission said. "These findings are another example of why we are investigating PG&E's safety culture."
(This story has been updated.)