PG&E should be broken up if responsible for California wildfires, lawmaker says

PG&E Corp., Northern California’s largest public utility, should be broken up if it is found to be at fault for the devastating wildfires that swept across Wine Country, a state senator said Tuesday.

The San Francisco Chronicle reported that state Sen. Jerry Hill — whose district includes San Bruno, which suffered a deadly gas explosion and fire from a PG&E natural gas pipeline in 2010 — said PG&E may need to be held accountable.

“If we find that in this particular case —and we don’t know the cause yet — then frankly I don’t think PG&E should do business in California anymore,” Hill said, according to the Chronicle. “They’ve crossed the line too many times. They need to be dissolved in some way, split.”

PG&E

PCG, +7.51%

  has been found responsible for wildfires in the past, most notably a 1994 blaze in California’s Sierra Nevada foothills, in which it was found liable for 739 counts of criminal negligence for failing to properly trim trees near power lines. Earlier this year, PG&E was fined $8.3 million for a deadly fire in Northern California that burned more than 500 homes in 2015.

The causes of the destructive swarm of wildfires that have burned swaths across Northern California for more than a week are not yet known, but there have been reports that downed power lines and exploding electrical transformers may have been responsible. California’s Public Utilities Commission and Cal Fire, the state’s firefighting agency, are both looking into PG&E’s possible role in the fires.

PG&E Chief Executive Geisha Williams told the Chronicle that it was too early to cast blame. “It’s very, very early days, and it’s a bit of a chicken-and-egg,” Williams said. “What we don’t know is, did our equipment start the fire, or did the fire damage the equipment?”

Firefighters have made significant progress against the fires, with six of the seven Wine Country blazes more than 50% contained as of Tuesday night. At least 41 people have been killed, and almost 250,000 acres have burned in the past week-plus, including more than 3,000 homes.

Property losses in Wine Country are expected to total in the billions.

PG&E shares have plunged 17% since Oct. 11, when the PUC investigation was announced. Shares jumped 7.5% Tuesday after a Monday report that an arson suspect had been arrested in Sonoma County. However, that arrest was in relation to a fire that started Sunday, and appeared unrelated to the earlier, far bigger blazes .

The company’s stock has been downgraded by Goldman Sachs, Wells Fargo and J.P. Morgan over the past week. PG&E’s market cap stood at about $29.5 billion Tuesdays, and its shares are down 5.4% year to date, compared to the S&P 500’s

SPX, +0.07%

  14% gain.