Last year’s devastating northern California wildfires won’t bankrupt the state’s largest utility, PG&E (PCG). Nor will future natural disasters permanently damage the company and other in-state electric and gas providers Edison International (EIX) and Sempra Energy (SRE).
On the last day of August, California passed legislation that allows utilities to “securitize” billions of dollars in fire disaster liabilities. Under the state’s “inverse condemnation” rule, utilities owe for damages when officials deem power lines and other infrastructure played a role, even if the companies have followed required safety practices.
