PG&E Shares Fall After California Says Utility Caused Dixie Fire

(Bloomberg) -- PG&E Corp. fell the most in five weeks after California investigators said late Tuesday that the utility's power line was responsible for sparking the second-largest wildfire in state history last year.

PG&E declined as much as 3.7% on Wednesday, the biggest drop since Nov. 30. 

The California Department of Forestry and Fire Protection, known as Cal Fire, said the Dixie fire was caused by a tree contacting PG&E electrical electrical distribution lines west of Cresta Dam in the Sierra Nevada mountains, north of Sacramento.  Cal Fire said it will refer the findings to the Butte County District Attorney's Office.

The Dixie fire, which started July 13, torched nearly 1 million acres and destroyed more than 1,300 structures, Cal Fire said. It was the first blaze in California history to burn clear across the Sierra Nevada mountain range.

The result of the probe is the latest blow for embattled PG&E, which emerged from bankruptcy in 2020 after agreeing to settle damage claims from previous wildfires. A federal judge overseeing the company's criminal probation said earlier this week that he would be open to extending federal oversight of the utility given its recent track record of starting large wildfires. 

PG&E said the large tree that hit one of its power line was one of more than 8 million within striking distance of its electrical wires, the utility said in a separate statement late Tuesday. PG&E said it has committed to burying 10,000 miles of lines and will continue to be “tenacious” in its efforts to stop fire ignitions from its equipment.

PG&E had said that it was likely liable for the Dixie fire and in November estimated that it would take a $1.15 billion loss from the blaze.

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