California Utility Shares Rise as Regulator Calms Investors

No cause has been determined, but speculation has centered on PG&E, which reported an outage around the time and place the fire ignited. Late Thursday, California Public Utilities Commission President Michael Picker sought to calm financial markets by indicating support for the continued viability of PG&E and other publicly traded utilities. In an interview with the San Francisco Chronicle, Picker said his agency will soon implement a provision in a new state law that makes it easier for utilities to pass costs for past wildfires to their customers. He said additional legislation may be needed to ensure that provision applies to this year's fires. “They have to be financially healthy to be able to provide those goods and services that ratepayers need," he told the Chronicle. "If they can't borrow money, if they have liquidity problems and they can't do vegetation management, that's a problem. That's not good policy, to really let them get financially unstable. “He also said he will widen an investigation of PG&E's safety culture, which started following the regulator's investigation of a 2010 gas pipeline explosion in San Bruno that killed eight people. Even with Friday's rebound, PG&E shares were trading about 50 percent lower than they were when the fire broke out. Moody’s and S&P downgraded the credit ratings for the utility and its parent company late Thursday and warned that further downgrades were possible. Another downgrade would likely drop their debt below investment grade, making it significantly harder and costlier for the company to raise money to operate its sprawling network.PG&E drew down its lines of credit on Tuesday, borrowing $3.3 billion in an unusual move that suggests the company is concerned about maintaining access to capital markets, Moody's reported.