SANTA ROSA, Calif. (KGO) -- From ashes to dirt and now, a translation into dollars.
PG&E is warning investors it may be on the hook for at least $2.5 billion in costs related to some of the devastating North Bay fires, but the utility giants warns it could get worse.
It notified investors Thursday morning of the 8-K SEC filing and a potential loss this quarter. Long term, the losses could total $15 billion.
Think if it as a financial weather report predicting a storm on the horizon.
"I would say it is not an admission of guilt," said Marc Edwards, a financial manager at Winans Investments. "It is an admission that they have this potential liability and they need to start reserving the money for the potential that it becomes a fact they have to pay."
A $2.5-billion write-down, said Edwards, represents almost two years profit for the company. And yet, he noted that PG&E stock rose 1.3 percent on the news. "The market is interpreting it as we know more than we did, yesterday."
The estimate accounts only for fires in which Cal Fire says PG&E bears responsibility.
Cal Fire has not yet assigned fault to the Tubbs Fire, which took out 5 percent of the structures in Santa Rosa. Attorneys representing some of those victims and others expect PG&E liabilities to increase.
"Twelve to fifteen billion dollars is what experts say was done in physical damage. Property damage. No one has tried to estimate emotional damages," said Garry Mauro, who claims to represent some 1,000 fire victims. As of now, the numbers mean nothing in terms of what they may, someday, receive.
"They (PG&E) are admitting a $2.5 billion charge," said attorney Doug Boxer. "They could cut checks to people today."
The Utility Reform Network, a PG&E watchdog, insists that rate payers should not bear any responsibility for covering PG&E losses.
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