Bankruptcy

bankruptcy

The town of Paradise, CA being engulfed by fire

Funny that I just wrote about visiting the epicenter of the Camp Fire, the most destructive wildfire in California history, and all the news today in Northern California is about the impending announcement of declaring bankruptcy by the utility that covers most of Northern California, PG & E (Pacific Gas and Electric).

“Under California law, utilities are exposed to liability from wildfires regardless of their negligence.” 

Just a few years ago, PG & E stock was considered to be safe, with a good dividend. Today, the shares dropped 55%, with talk of them becoming near worthless.

Potential liability is estimated at $30 billion Enough, I believe, to break any company. Utility rates will go up, since it will cost them more to borrow money as a bankrupt company.

“The driving force has been extreme wind—gusts of up to 60 miles per hour, perhaps even 70 in the hills of Southern California—blowing through the state. Wind further desiccates already dry vegetation and pushes the fires along with incredible speed. Like a demonic analog of water, this air is flowing across the state, nourishing flames and parching plants.” 

I had heard through other sources that the wind was 70 MPH that started the chain reaction. The people in Paradise had about 20 minutes from the time the fire started until it was at their town.

I don’t think the pictures that I posted really showed the true devastation – hundreds of homes gone, showing just brick chimneys and hulks of cars, just in the 2 streets that I explored.

I remember it here, that day, and that wind was something. Perfect conditions for a wildfire.

Was the fire caused by a line that was in need of maintenance, or was it inevitable due to the high wind and parched land?

In the last 40 years in Northern California, we have seen an explosion of homes in the Sierra foothills. Small gold rush towns have become bedroom communities, as many want to live surrounded by forest.

I had a good friend who lived above Auburn on a hill, surrounded by pines. She loved sipping wine while listening to Mozart. It was near paradise, unless a fire came. I guess it would go from Heaven to Hell in a hurry.

Will there be a 2-tiered rate structure in the future based on risk? Why would a utility want to build power lines into an area they know will substantially increase their risk and exposure?

My neighbor, who worked for Hewlett Packard, moved from the Bay Area to live up in the foothills on a couple of acres. He found it so much work constantly clearing away brush that he sold the place and moved down to the flatlands.

Despite admonitions for people to keep a fire safety zone, not everyone does it.

I am ambivalent on assigning all blame to PG & E, with the ending result of all of this is yet to play out. I am not sure that the lawmakers who made the law considered all of the unintended consequences.

It is one thing if the line was in need of maintenance, quite another if PG & E did all they reasonably could to insure the safety.

I just don’t know.

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