This is one more reason to go rooftop solar – few or no transmission lines.
As submitted to the US Securities and Exchange Commission (SEC) on Tuesday, November 13, 2018:
“Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
As of November 13, 2018, Pacific Gas and Electric Company (“Utility”), a subsidiary of PG&E Corporation, and PG&E Corporation have aggregate borrowings outstanding under their respective revolving credit facilities of $3.0 billion and $300 million, respectively. The Utility’s aggregate borrowings under its revolving credit facility includes $2.85 billion of revolving credit loans, approximately $105 million of letters of credit outstanding, and $10 million of commercial paper. No additional amounts are available under the Utility’s and PG&E Corporation’s respective revolving credit facilities.
With these borrowings, PG&E Corporation’s and the Utility’s balance of cash and cash equivalents increased to approximately $356 million and $3.1 billion, respectively, at November 13, 2018. PG&E Corporation and the Utility made the borrowings under their respective revolving credit facilities for greater financial flexibility. PG&E Corporation and the Utility plan to invest the cash proceeds from the borrowings in highly liquid short-term investments and to use them for general corporate purposes, including upcoming debt maturities.
Any description of PG&E Corporation’s or the Utility’s respective credit agreements is qualified in its entirety by reference to the complete copies of PG&E Corporation’s and the Utility’s credit agreements filed as Exhibits 10.1 and 10.2, respectively, to PG&E Corporation and the Utility’s Form 10-Q for the quarter ended March 31, 2015, which credit agreements are incorporated by reference herein.
Item 8.01 Other Events.
On November 8, 2018, a wildfire began near the city of Paradise, Butte County, California (the “Camp Fire”), located in the service territory of the Utility. The California Department of Forestry and Fire Protection’s (“Cal Fire”) Camp Fire Incident Report dated November 13, 2018, 7:00 a.m. Pacific Time (the “incident report”), indicated that the Camp Fire had consumed 125,000 acres and was 30% contained. Cal Fire estimates in the incident report that the Camp Fire will be fully contained on November 30, 2018. In the incident report, Cal Fire reported 42 fatalities. The incident report also indicates the following: structures threatened, 15,500; single residences destroyed, 6,522; single residences damaged, 75; multiple residences destroyed, 85; commercial structures destroyed, 260; commercial structures damaged, 32; and other minor structures destroyed, 772.
The cause of the Camp Fire is under investigation. On November 8, 2018, the Utility submitted an electric incident report to the California Public Utilities Commission (the “CPUC”) indicating that “on November 8, 2018 at approximately 0615 hours, PG&E experienced an outage on the Caribou-Palermo 115 kV Transmission line in Butte County. In the afternoon of November 8, PG&E observed by aerial patrol damage to a transmission tower on the Caribou-Palermo 115 kV Transmission line, approximately one mile north-east of the town of Pulga, in the area of the Camp Fire. This information is preliminary.” Also on November 8, 2018, acting governor Gavin Newsom issued an emergency proclamation for Butte County, due to the effect of the Camp Fire.
As previously reported, during the third quarter of 2018, PG&E Corporation and the Utility renewed their liability insurance coverage for wildfire events in an aggregate amount of approximately $1.4 billion for the period from August 1, 2018 through July 31, 2019. For more information about wildfire insurance and risks associated with wildfires, see PG&E Corporation and the Utility’s quarterly report on Form 10-Q for the quarter ended September 30, 2018.
While the cause of the Camp Fire is still under investigation, if the Utility’s equipment is determined to be the cause, the Utility could be subject to significant liability in excess of insurance coverage that would be expected to have a material impact on PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows.
– 2 –” Emphasis our own. Original here: https://www.sec.gov/Archives/edgar/data/75488/000114036118042983/form8k.htm
The problem is obviously made worse by drought conditions and winds.
In a May 7, 2018 BUSINESS UPDATE presentation PG&E promised:
“• Executing more enhanced vegetation management in high fire-threat areas
• Expanding our disabling of reclosers and circuit breakers
• Refining and executing protocols to proactively turn off electric power where extreme fire conditions are occurring” https://www.sec.gov/Archives/edgar/data/75488/000119312518154942/d549096dex991.htm
Top photo of deer used for illustration purposes: Montana Deer Wildfire USDA-US Forestry Service