FLASH PCG: PG&E Suspends common and preferred dividends due to wildfires

This afternoon, the board of directors of PG&E Corporation and Pacific Gas and Electric announced the suspension of dividends for both the common and preferred stock as of the three month ending January 31, 2018. The decision was made due to the unprecedented wildfires from October 2017 in northern California, given that California’s courts have consistently applied inverse condemnation to events in which utility equipment were involved in the incident, regardless of whether or not the utility acted in accordance with established inspection and safety rules. This means that the utility is liable for the property damages and attorney’s fees associated with the incident. It is our understanding that California courts apply inverse condemnation under the assumption — not necessarily accurate, in our opinion — that the utility would be permitted to pass-through these costs to their customers.

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