S&P Warns Power Companies About Becoming the Next PG&E

After PG&E's bankruptcy and downgrades, S&P says more could follow if the state doesn't reform utility regulations.

After two devastating wildfire seasons, California’s largest utility is bankrupt -- and it might not be the last.

Faced with as much as $30 billion in liabilities for its equipment allegedly sparking wildfires in 2017 and 2018, Pacific Gas & Electric (PG&E) filed for bankruptcy protection last month. Now, S&P Global Ratings is warning that, thanks to extreme weather and weak protections for power companies in the state, more utility upheaval could follow.

“Without any regulatory reform, we view it as entirely possible that another electric utility could face a devastating wildfire during the 2019 wildfire season," wrote analysts Gabe Grosberg and Rebecca Ai. "Depending on the magnitude and severity, its board of directors could similarly determine that the best course of action would be to file for a voluntary bankruptcy before year-end 2019."

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