9.15 +0.06 (0.66%)
Before hours: 5:11AM EDT
|Bid||9.09 x 1800|
|Ask||0.00 x 1400|
|Day's range||8.50 - 9.12|
|52-week range||3.55 - 20.16|
|Beta (5Y monthly)||1.11|
|PE ratio (TTM)||N/A|
|Forward dividend & yield||N/A (N/A)|
|Ex-dividend date||28 Sep 2017|
|1y target est||N/A|
(Bloomberg) -- PG&E Corp. shares tumbled after the company raised more than $5 billion in a common stock and equity unit offering to help finance its exit from the biggest utility bankruptcy in U.S. history.The California power giant’s shares fell as much as 5.8% Friday, to $9.17, following its sale of more than 420 million shares at $9.50 each. The shares were trading at $9.34 at 12:18 p.m. in New York.PG&E’s offering is one the year’s largest stock sales and part of the company’s plan to raise $9 billion in equity to help pay for claims from wildfires through its Chapter 11 case. The company has also raised more than $13 billion in the debt markets to finance its bankruptcy, which began after its equipment sparked deadly blazes in Northern California.The company said it expects to emerge from Chapter 11 on or about July 1.The broader market also fell Friday, with U.S. stocks dropping to a two-week low as a resurgence in new virus infections drag on the American economy. That creates a challenge for PG&E as it brings a large number of new shares onto the market.“Obviously, it’s a substantial amount of dilution,” said Kit Konolige, an analyst for Bloomberg Intelligence. “Maybe people would have liked to have seen a higher price.”PG&E’s $9.50 per-share offer price represented a 2.4% discount to Thursday’s close of $9.73. The share sale, as well as separate offering of equity units, which have a coupon of 5.50%, netted the company about $5.15 billion, according to a statement early Friday.What Bloomberg Intelligence Says“With successful equity offerings of more than $9 billion opening the way to a bankruptcy exit by July 1, PG&E faces one key issue -- surviving the summer wildfire season.”\- Kit Konolige, senior utilities analystRead the full report here.Goldman Sachs Group Inc. and JPMorgan Chase & Co. are underwriting the offering. Barclays Plc, Citigroup Inc. and BofA Securities Inc. are joint book-running managers.PG&E filed for Chapter 11 last year facing $30 billion in liabilities from the fires, some of the worst in California history. They included the Camp Fire, which destroyed the town of Paradise and killed more than 80 people. The company pleaded guilty last week to 84 counts of involuntary manslaughter. State regulators fined PG&E $1.9 billion in connection with the blazes.PG&E is raising money to help cover $25.5 billion in damage claims it resolved in its bankruptcy through settlements with fire victims, insurers and local government agencies.(Adds analyst quote in sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
PG&E; Corporation has announced that it has raised over $5 billion from shares and equity unit offering as the company prepares for life to avoid the largest utility bankruptcy in U.S. history in July.
(Bloomberg) -- The coronavirus-related economic shutdowns have led to one arcane consequence: delaying California’s sale of $10.5 billion in bonds to finance future wildfire costs.Power customers are using less electricity with shops and businesses closed, and that has slowed the efforts to pay down bonds sold in the last energy crisis that must be defeased before the new debt is offered.The delay means the state can’t take advantage of the current rally in the $3.9 trillion municipal market. While investors in need of tax-havens generally seek California bonds, the market now is seeing even greater demand for such securities. Bondholders are set to receive a wall of debt payments this summer that’s expected to exceed the amount of new securities on tap.“It’s hard to anticipate what the fall is going to look like,” said James Dearborn, director of municipal credit research at DWS. “If they were issuing bonds today, I think they would be well received.”Last year, California Governor Gavin Newsom and state legislators agreed to establish a $21 billion fund to help utility giants including PG&E Corp. and Edison International cover future liabilities when their equipment ignites catastrophic blazes. Such exposure led to PG&E Corp.’s bankruptcy last year, and its incipient exit will allow it to tap the fund.The fund was part of legislation needed to keep investor-owned power companies operating as wildfires increase in number and severity. An unusual California doctrine holds utilities liable for wildfires that their equipment sparks, even if they aren’t proven negligent, leaving officials worried about the reliability of power in the most-populous U.S. state.Helping finance the fund is $10.5 billion to be raised through the sale of municipal revenue bonds. The bonds will be backed by a charge customers are already seeing on their bills from the $11.2 billion in bonds the state sold starting in 2002. That issuance reimbursed California from buying electricity for insolvent utilities hobbled by rising prices and manipulation by Enron Corp. and other companies in the deregulated market.The catch: California officials have to wait until they can defease those bonds, of which $1.5 billion is outstanding. The amount collected by the $.005 per kilowatt hour charge depends on usage. With the state mandating residents to shelter in place at the end of March, electricity demand dropped. Since the first full week of the statewide stay-at-home order through June 7, homes, businesses and manufacturers used 3.7% less in electricity on an average weekday, according to California ISO, which manages the state’s power grid.Originally, the bonds were to be retired around the third week of August. Due to lower than projected revenue, the estimate is now mid- to late-September, with the new bonds potentially being sold in October, according to the state treasurer’s office. It’s likely the new bonds would pay back the $2 billion in loans to the fund from the state’s general fund, said H.D. Palmer, a spokesman for Newsom’s finance department.Contributions from the utilities make up the rest of the fund. PG&E’s share is $4.8 billion. Southern California Edison made its initial contribution to the fund of $2.4 billion in September 2019 and made the first of its 10 annual payments of $95 million in December. SDG&E made its first initial contribution of $322.5 million and its first of its ten annual payments of $12.9 million.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- PG&E Corp. won final approval of its bankruptcy plan, clearing the way for the California utility giant to emerge from one of the darkest chapters of its history.U.S. Bankruptcy Judge Dennis Montali issued an order Saturday confirming PG&E’s Chapter 11 plan that will cover billions of dollars in damage claims stemming from catastrophic wildfires linked to the company’s equipment. The judge said in an earlier written decision that he planned to approve the turnaround proposal because the alternative would leave tens of thousands of fire survivors with “no other options on the horizon.”PG&E needed the judge to sign off on its plan before the end of this month to qualify for a state wildfire insurance fund. That will help it cover damage claims from any future blazes sparked by its power lines.Read More: PG&E Is Set to Exit Bankruptcy, Ending Saga Sparked by Fires“PG&E is committed to emerging from Chapter 11 as a fundamentally improved and transformed utility that meets the highest safety, governance, and operational standards,” Chief Executive Officer Bill Johnson said Saturday in a statement.The company said it expects to emerge from bankruptcy in July.PG&E filed for bankruptcy in January 2019 after its equipment was implicated in wildfires that killed more than 100 people and burned tens of thousands of homes across Northern California. It was the largest utility reorganization in U.S. history. The company is emerging from Chapter 11 saddled with nearly $40 billion in debt after it agreed to settle claims from people, insurers and local government agencies for $25.5 billion.PG&E retired expensive high-coupon debt and replaced it with lower cost debt as a result of the Chapter 11 proceedings, yielding savings for customers, according to a statement.With the judge’s confirmation in hand, PG&E can begin marketing $5.25 billion in shares as part of a plan to raise $9 billion through new equity to help pay for the fire-related costs. It is also raising more than $13 billion in the debt markets.Some wildfire victims denounced PG&E’s turnaround proposal, saying hedge funds and other investors stood to make billions from bets on the distressed utility while individual victims will have to take half of their $13.5 billion settlement in shares in the reorganized company.PG&E said it will implement all wildfire settlements it reached during its bankruptcy after it emerges, including the immediate funding of the victim trust.(Updates with PG&E statement on debt replacement)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The stock market didn't make much of a move on Wednesday morning, weighing several offsetting factors that raised both positive and negative prospects for investors. There's been a lot of activity in the shares of bankrupt companies like Hertz Global Holdings, J.C. Penney, and Whiting Petroleum, with many investors not realizing the potential to lose everything involved in buying that stock. Most of the time, shareholders end up with little or nothing when a company emerges from bankruptcy, as creditors end up dividing whatever assets are left.
(Bloomberg) -- Only 19 months after the Camp Fire erupted in the tinderbox mountains of Northern California, PG&E Corp., the power utility behind the deadliest conflagration in the state’s history, is poised to emerge from bankruptcy with its safety still in question.As the state braces for another fire season, the judge overseeing PG&E’s Chapter 11 case said Tuesday he would approve its $59 billion turnaround plan. Moments earlier, its chief executive officer pleaded guilty on behalf of the company to involuntary manslaughter, bringing its criminal case from the deadly blaze close to an end. And on Wall Street, PG&E moved forward with plans to sell bonds to fund its restructuring.The quick series of events concludes a tumultuous chapter for PG&E. Yet it’s exiting bankruptcy facing many of the same challenges as it did the day it filed. Efforts to strengthen its finances and safety procedures are still underway, and the long-term future of the giant utility remains in question.“It’s only going to take one season like the last couple and they’d be back in bankruptcy,” said San Jose Mayor Sam Liccardo, who led an unsuccessful push to turn PG&E into a customer-owned cooperative.During an online hearing, U.S. Bankruptcy Judge Dennis Montali said he will issue a notice Wednesday outlining his plan to approve PG&E’s restructuring. The judge said he will schedule a hearing for Friday to iron out a handful of issues.“I’m going to come to the conclusion that the plan should be confirmed,” Montali said.An attorney for PG&E asked for an official order confirming the plan by Monday so the company can start selling $9 billion in equity to help fund its reorganization. It’s already sold $8.9 billion in investment-grade bonds and is raising $3.75 billion in junk bonds. As of Tuesday morning, the company had received about triple the number of orders it’s seeking for the high-yield notes.Read More: PRICED: Pacific Gas And Electric $8.925b Debt OfferingOn the morning of Nov. 8, 2018, in the foothills of the Sierra Nevada mountains, a faulty PG&E transmission line ignited what soon became a hell on Earth -- a fire that soon consumed more than 150,000 acres, including the entire town of Paradise. It killed more than 80 people and destroyed nearly 19,000 homes, businesses and other structures.PG&E, which serves about 16 million people in Northern and Central California, has made some crucial changes since collapsing into bankruptcy in the aftermath of the blaze. It has replaced 11 of its 14 board members and is allowing for additional state oversight, appointing an independent safety monitor and dividing operations into regional units to focus more on safety. The company will have a new chief executive officer after its current one, Bill Johnson, steps down at the end of the month.As the judge prepared to announce his decision Tuesday, Johnson appeared in a California courtroom in Chico, some 20 miles from where the Camp Fire began. On behalf of the company, he pleaded guilty to 84 counts of involuntary manslaughter and one count of unlawfully starting a fire.“PG&E will never forget the Camp Fire and all that it took from this region,” Johnson said. “We remain deeply, deeply sorry for the terrible devastation we have caused.”READ MORE: PG&E Pleads Guilty to Killing 84 People in 2018 Camp FireHours after Johnson spoke, the Butte County District Attorney, who prosecuted the utility, released a scathing 92-page report of his probe into the Camp Fire. The findings included that a broken metal hook supporting the power line that started the blaze was at least 97 years old. The tower that held the equipment was about 100 years old.In essence, the prosecutor said, “PG&E blindly bought a used car. PG&E drove that car until it fell apart.”In a statement, PG&E said it has made “substantial progress” toward emerging from bankruptcy as a financially stable company that is positioned to safely supply California with power and help meet the state’s clean-energy goal.Critics, however, contend the reforms have yet to fully address the daunting operational challenges PG&E faces. Despite calls for the company to be broken up or turned into a government-owned entity, it will remain a colossal investor-owned utility. And it will emerge from Chapter 11 having nearly doubled its debt to more than $38 billion.As recently as May, a federal judge overseeing PG&E’s criminal probation stemming from a fatal gas-pipeline explosion in 2010 excoriated the company, saying it continues to drag its feet on safety and calling it a “recalcitrant criminal.”“If ever there was a corporation that deserved to go to prison -- it is PG&E,” U.S. District Judge William Alsup said during a virtual hearing. “I’m going to do everything within my power to protect the people of California from further crimes and further destruction by PG&E.”PG&E’s debt has raised concerns about its financial durability and its ability to make an estimated $40 billion in investments required to fire-proof its grid. In the meantime, the utility will need to resort to intentionally shutting off power to keep its lines from igniting fires during wind storms.The company expects to officially exit bankruptcy at some point this summer, after it closes on the financing it has lined up to fund its reorganization. If PG&E gets into trouble again, California will have the option to take the utility over as part of an agreement with the state to back its reorganization plan.“This company didn’t get much out of the bankruptcy that’s going to help it going forward,” said Jared Ellias, a bankruptcy law professor at the University of California, Hastings College of Law. “They are leaving bankruptcy basically having converted pre-bankruptcy claims into mostly debt they have to pay.”One key advantage PG&E will have once it formally exits Chapter 11 is the option to participate in a state fund established to help utilities cover liabilities from future fires linked to their equipment.In all, investigators blamed PG&E equipment for 21 fires in 2017 and 2018. PG&E’s downfall underscores the increasing vulnerability utilities face as wildfires and hurricanes become more extreme. That’s especially the case in California, where state law holds utilities liable for damages even if they aren’t found to be negligent.PG&E’s odyssey through Chapter 11 turned into a battle for control of the century-old company as some of the biggest names on Wall Street including Pacific Investment Management Co., Elliott Management Corp. and Seth Klarman’s Baupost Group fought over competing reorganization plans.Judge Montali says he will confirm PG&E’s proposal despite concerns from some fire victims about whether they will get the full value of a $13.5 billion settlement to pay claims filed on behalf of an estimated 70,000 families and businesses devastated by fires.Half of the settlement will be paid in stock that some victims worry may go down in value if PG&E is blamed for causing more wildfires this year. The trust could see a $2 billion shortfall in the value of its shares when PG&E emerges based on current stock price estimates, an attorney for fire victims said Tuesday during the bankruptcy hearing.“Everyone here in Northern California really needs this company to succeed,” Ellias said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
84 people died in the Camp Fire that investigators determined was the fault of reckless maintenance of the utilities transmission system.
(Bloomberg) -- Blackouts that hit millions of Californians in 2019 could be doubly calamitous this year with tech giants Google, Twitter Inc. and Facebook Inc. among the many companies keeping offices closed until the fall or later in response to the global Covid-19 pandemic.If utilities cut power again, home offices set up during the pandemic could go dark and stay dark for days, and they’ll have no corporate offices to flee to for power. In October 2019, more than 3 million people were affected by a series of rolling blackouts over more than a week as PG&E Corp. and Edison International tried to prevent live wires from sparking wildfires.Call it a collision of crises. Blackouts could limit California’s push to revive an economy largely paralyzed by stay-at-home orders this spring. The state, utilities and individual companies are all seeking ways to deal with blackouts before a wildfire season forecast to be worse than normal. Hewlett Packard Enterprise Co., for one, has “long contemplated this type of scenario,” according to spokesman Adam Bauer.The San Jose-based tech company is building in geographic redundancies, he said, with “the ability to shift work among distributed teams to maintain service to our customers and partners.”Neither Google, Twitter nor Facebook would comment on their plans. The state’s utilities and government officials, though, have said they’re working to minimize the threat.California regulators last month adopted new shutoff rules that will require the companies to restore electricity within 24 hours after the weather clears, although the state’s wind storms can last several days. PG&E, the state’s largest utility, has set its own goal of 12 daylight hours after the winds ease, and has nearly doubled the number of helicopters it will use to look for downed lines.Troublesome SignsStill, there are troublesome signs leading into this year’s wildfire season. A year ago at this time, the state was drought free. Now, almost 50% of California is gripped by drought, with the driest areas occurring across the northern part of the state, according to a June 2 assessment by the U.S. Drought Monitor.The result: an “above normal significant large fire potential,” according to the National Interagency Fire Center in Boise, Idaho. Already this year, more than 6,600 acres have been burned in the state. Small blazes are already cropping up on an almost daily basisAt the same time, the coronavirus has killed more than 4,900 people in California, forcing companies to allow employees to work at home, closing schools and restricting travel.“The reality is Mother Nature hasn’t changed her mind with respect to wildfires because of covid,” said Don Daigler, director of business resiliency for Edison’s Southern California Edison utility. “We still face the same fire risk as communities as we did last year.”Sheltered in Place“We’re going to have people sheltered in place and without power,” said Carl Guardino, chief executive officer of the Silicon Valley Leadership Group lobbying organization, which represents many of the region’s biggest companies.Guardino’s own home lost electricity for 5 days last year, he said. He ended up moving his family into a hotel. he said. Now, though, even that solution is unlikely given the coronavirus shutdowns.To be sure, many Californians have already turned to back-up power generators. Generac Holdings Inc. saw its sales in the state surge 300%, its chief executive officer told Bloomberg a month after the blackouts. And this spring, the Silicon Valley Leadership Group successfully lobbied state officials to let solar installers return to work months before many other businesses opened.But solar panels with a battery to store the power, can cost $30,000 to buy the hardware for a robust home system and have it installed, so it’s not for everyone.Utility ViewThe utilities, whose use of intentional blackouts last year provoked fierce criticism, are aware of the issue. But they don’t want the number of people working from home to affect their decision to shut off power, if weather conditions demand it.Those conditions -- high winds, hot temperatures, low humidity and dry vegetation -- should still be the determining factors, the utilities say.“The approach we take is different, but the calculus really hasn’t changed,” Edison’s Daigler said. Instead, they’re trying to reduce the need for shutoffs, and ensure that when they occur they are smaller and shorter than last year’s.“We want to reduce the impact of public safety power shutoffs on customers whether they are working from home or not,” said Matt Pender, director of the community wildfire safety program at PG&E.Forced Into BankruptcyPG&E, which was forced into bankruptcy last year after its equipment sparked deadly fires, is installing switches and other devices to isolate power cuts, making them more targeted than last year’s mass blackouts. The company has also secured mobile diesel generators that can be located at as many as 48 substations.Both PG&E and Edison are also hardening their field equipment, running some lines underground and installing stronger poles. Edison, for example, is installing 600 miles of power lines with coating that prevents sparks when touched by tree branches.PG&E estimates these steps should cut the number of customers affected in each potential blackout by one-third.Pop-Up CentersBoth companies are also planning to open more pop-up community resource centers during blackouts to allow for more social distancing between people who show up to cool down and charge phones and other devices.They’ll send vans equipped with charging stations into darkened neighborhoods to help customers who don’t go to the centers, potentially a large number of people at a time when gathering with strangers brings risks.Some county governments, along with the city of San Jose, asked state utility regulators in April to impose new rules on the shutoff program. The commission, though, said the final decision should stay with the utilities.“Based on these rules and standards, it is appropriate for the utilities to have the final say over shutting down power and for the CPUC to hold them accountable,” spokeswoman Terrie Prosper said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Big Oil’s forays into renewable energy have drawn a lot of skepticism. Besides accusations of greenwashing, any oil CEO embracing energy transition must somehow convince investors to trust them putting cash into unfamiliar businesses that might need a lot of upfront spending before there’s much in the way of profits. It’s a race against time; a race to prove the CEO isn’t just splurging money on their version of the vision thing. One way to try getting there faster involves a lesson from a more familiar bit of the energy business: pipelines.Hard as it is to imagine now, there was a time when pipelines were hot investments. Master limited partnerships, the tax-advantaged structures that usually housed them, were in huge demand in the years after the financial crisis due to their high payouts and shale-fueled growth. MLPs traded at almost double the earnings multiple of the wider energy sector.Some of the easiest money ever made in the history of investment banking involved showing some variation of that chart to an oil producer and saying something like: “Hey, how about we double the value of those old pipelines you own by sticking them into a new thing called [Company Name] Partners LP and spinning it off? That’ll be $20 million please. I’ll get an analyst started on the lucite.”Of 188 IPOs of MLPs since 1986, almost 40% happened in that five-year period between 2010 and 2014, according to data from Alerian. Roughly two-thirds of MLP-dedicated investment funds launched then. What a time it was. As is often the way with such things, it got a bit out of hand. It turns out steering yield-starved investors toward companies with all the governance of benevolent dictatorships, minus the benevolence, can lead to sub-optimal outcomes.Even so, the original premise remains valid: taking assets that aren’t valued by one set of investors and offering them to another set that might. Nobody’s buying shares in the likes of Royal Dutch Shell Plc or BP Plc because of their solar farms or vehicle-charging ventures — or, given Covid-19’s ravaging of oil demand, buying their shares at all. If these companies are serious about maintaining transition strategies once this crisis passes, then spinning off the assets should be a high priority.For one thing, transition-flavored companies have generally weathered the pandemic better.Like those MLPs of yore, transition stocks garner higher valuations too. There are ludicrous extremes such as Tesla Inc., but more down-to-earth stocks such as Danish wind pioneers Ørsted A/S and Vestas Wind Systems A/S or Florida’s NextEra Energy Partners LP also command multiples oil majors should envy. And as for Tesla, while its four-figure earnings multiple makes no sense, what should unnerve the majors is the sheer zeal of its fans and power of its narrative despite all the red ink and red flags.An analysis just published jointly by London’s Imperial College Business School and the International Energy Agency reinforces this in two ways. Examining portfolios of U.S. and European companies linked to fossil fuels and renewable energy, the authors find the new kids generated both higher and less volatile shareholder returns over five and 10-year windows.Perhaps more important is the sheer paucity of renewable energy stocks available. The study’s U.S. fossil fuel basket, for example, has 163 constituents. The corresponding renewable power portfolio has only 18, a couple of which no longer exist and one of which is a regulated utility with an interesting backstory, PG&E Corp.This gets at a big problem: It’s hard for the average investor to gain exposure to pure energy transition themes, as the assets often reside in private-equity-like portfolios or inside bigger companies that do everything from energy to autos to construction.Even though it’s nascent relative to the incumbent energy business, the amounts invested are already large. Bloomberg NEF’s database of clean energy asset financing adds up to $3.3 trillion from 2004-19, with almost half of that in the past five years. Yet while investors can pick or choose from any number of frackers, miners or majors — and dedicated funds tracking them — participating in renewable energy or other transition themes is much harder.That’s a big problem for the transition itself. Capital costs can make or break renewable energy projects; with little running cost, virtually all the outlay is upfront. The IEA, in its latest energy investment report, released in May, noted that getting lower-cost institutional money into a wind project can be the difference between single- and double-digit returns (and, therefore, whether the project goes ahead). Similarly, without ready access to cheap capital, there would have been no shale boom (or no Tesla, for that matter). This is where oil majors seeking a relevant role in energy transitions might be useful. Rolling up a set of ventures hidden inside an oil major trading on a low multiple is a good way to destroy value. It also lends credence to accusations of greenwashing: If you’re serious, then why obscure the scale and performance of these assets by lumping them in with natural gas or making them a quarterly line item?Spinning them out into separate companies instead should provide higher valuations and, therefore, a means to raise cheaper capital for new projects, by expanding the pool of dedicated options for interested investors. Meanwhile, traditional oil investors needn’t be jealous of dollars heading into renewable energy projects. The majors could retain large stakes and even co-brand them; presumably, BP and Shell have retained names such as Lightsource and Greenlots for a reason. The only imperative is to avoid the conflicts and fetid governance that ultimately undid many MLPs.A consistent refrain of Big Oil is that its sheer bigness provides an edge. That doesn’t fit neatly with the distributed and modular nature of renewable energy and other transition-related businesses. But heft could help where it really counts: raising money.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
One of these is clean energy producer Clearway Energy (NYSE: CWEN)(NYSE: CWEN.A), which has already provided its investors one raise earlier this year and could give them an even bigger one later this summer. While electricity usage has fallen this year as a result of the COVID-19 outbreak, this issue hasn't impacted Clearway. Overall, Clearway expects to produce $310 million, or $1.56 per share, of cash available for dividends this year, which would be 22% above last year's level.
With 2020 shaping up to be one of the hottest years on record, the insurance industry, already hobbled by the coronavirus pandemic, is bracing for another wave of insurance claims.
Clearway Energy (NYSE: CWEN) (NYSE: CWEN.A) has been largely immune to the impact the COVID-19 outbreak has had on electricity usage. Powering that surge was a 16% increase in electricity generation thanks to more favorable year-over-year wind and solar conditions across its portfolio.
California's largest utility, Pacific Gas & Electric, will plead guilty to 84 involuntary manslaughter counts in connection with the 2018 Camp Fire, the most destructive wildfire in the state’s history. The company also pledged billions of dollars to improve safety and help wildfire victims, under an agreement with Governor Gavin Newsom. That agreement ended a major roadblock to PG&E's planned emergence from Chapter 11 bankruptcy. PG&E’s guilty plea would end all state criminal proceedings against it - after a state regulator last year concluded the company did not properly inspect and replace transmission lines before a faulty wire sparked the Camp Fire. That blaze killed more than 80 people and destroyed much of the town of Paradise. Chief Executive Bill Johnson said in a statement: "We cannot replace all that the fire destroyed, but our hope is that this plea agreement, along with our rebuilding efforts, will help the community move forward from this tragic incident.” PG&E also agreed to put itself up for sale if it cannot emerge from Chapter 11 by a state-imposed June 30 deadline... before the next wildfire season begins.
(Bloomberg) -- Warren Buffett said he’s not yet picked a candidate in the U.S. presidential race.“I think I’m going to wait and see who gets the nomination,” Buffett said Monday in an interview with CNBC. “Normally, I vote for Democrats. We will see what happens.”Buffett, who runs Berkshire Hathaway Inc., endorsed Hillary Clinton for the 2016 election against now-President Donald Trump, and attended fundraisers for both Clinton and Barack Obama ahead of the 2008 primaries. The son of a Republican U.S. congressman, Buffett, 89, said he’s a capitalist, not a “card-carrying” Democrat.Democratic candidates vying for the nomination include Vermont Senator Bernie Sanders, who’s gained momentum with victories in Nevada and the New Hampshire primary. While Buffett agrees with Sanders that the country needs to do more for people who are left behind, he doesn’t think that requires dismantling “the golden goose” of capitalism.“I actually agree with him in terms of certain things he would like to accomplish,” Buffett said. “I don’t agree with him in many ways.”Buffett said he would prefer former New York City Mayor Michael Bloomberg over Sanders, who embraces what he calls democratic socialism.“I would certainly vote for him,” Buffett said of Bloomberg. “I don’t think another billionaire supporting him would be the best thing to announce.”Bloomberg’s campaign has said he would sell his company, Bloomberg LP, if he’s elected president. Buffett said he wouldn’t be a buyer because some other bidder is likely to emerge that would pay more. (Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)Buffett’s business partner, Charles Munger, said earlier this month that Michael Bloomberg could garner the votes of many moderates, increasing his chances in the election. Munger, a lifelong Republican, declined to name which candidate, if any, he was supporting. Buffett expressed support for Bloomberg in early 2019, ahead of the candidate’s official entry into the race.U.S. equities dropped Monday as the coronavirus continued to spread beyond China. Buffett said the virus hasn’t affected his long-term outlook on stocks, since he often views investing through a multi-decade lens.“It is scary stuff,” Buffett said. “I don’t think it should affect what you do in stocks. But in terms of the human race, it’s scary stuff.”Buffett spoke after releasing his annual letter and fourth-quarter earnings on Saturday. He said in the letter that shareholders can expect to hear more from top lieutenants Ajit Jain and Greg Abel, seen as the top contenders to eventually replace him as CEO. The company’s earnings report showed Berkshire stepped up its share repurchases at the end of 2019, spending $2.2 billion for the biggest tally ever in a single quarter.Berkshire’s Class A shares fell 2.5% to $335,027 at 11:09 a.m. in New York. They’re down 1.4% for the year.Here are some other key takeaways from Buffett’s comments Monday:On GeicoLast year, Berkshire announced that Todd Combs, one of Buffett’s key investing deputies, would take over as Geico’s chief executive officer. That change is temporary, Buffett said Monday.“Todd is there and I hope very much that he’s not there very long,” Buffett said. “Our intention always is to promote from within. We would hope to pick out the right person at Geico.”On Yield HuntBuffett criticized companies willing to take on more risk in the hunt for higher returns.“Reaching for yield is really stupid, but it’s very human,” he said.On AirlinesBuffett, whose company owns stakes in Delta Air Lines Inc. and Southwest Airlines Co., said it’s “very unlikely” Berkshire would buy an airline outright because of the heavily-regulated nature of the industry.On CryptoBuffett’s lunch with Chinese cryptocurrency entrepreneur Justin Sun doesn’t seem to have changed his mind on the asset.“Cryptocurrencies basically have no value -- they don’t produce anything,” Buffett said.On PG&EThe billionaire investor’s company owns a sprawling energy empire across the U.S. and even in the U.K. Still, he doesn’t seem to want to add PG&E Corp. to the mix, despite urging from California Governor Gavin Newsom.PG&E filed for Chapter 11 bankruptcy protection more than a year ago after its equipment was blamed for causing some of the worst fires in California history, resulting in about $30 billion in liabilities.“It’s too tough,” Buffett said, while praising Newsom. “I don’t know how to solve all that.”On Wells FargoBerkshire sold some of its Wells Fargo & Co. stake in the fourth quarter, taking that investment down to $17 billion at the end of the year. Buffett declined to give his current views on the company and reiterated that the bank made a mistake in not responding to its issues more quickly.“Some of it was sold down to avoid being over 10%,” Buffett said of the Wells Fargo stake, referring to U.S. regulations governing maximum bank ownership stakes. “We’ve sold more than that.”On Kraft HeinzBuffett said the company is “still a great business” even after struggles including a major writedown last year.Berkshire continues to carry the investment at $13.8 billion on its balance sheet, even though its market value was $10.5 billion at the end of 2019.(Updates with comments on coronavirus starting in 10th paragraph.)To contact the reporter on this story: Katherine Chiglinsky in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Michael J. Moore at email@example.com, Steve Dickson, Daniel TaubFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- PG&E Corp.’s biggest union is pushing back against Bernie Sanders’ criticism of the embattled California power company, claiming the senator and presidential candidate supports a $100 billion state takeover of the utility.The campaign by the International Brotherhood of Electrical Workers Local 1245 follows a new Sanders ad in California last week that blasted PG&E for sparking the deadly wildfires that pushed it into bankruptcy last year.Sanders’ video, which comes as the state gears up for its March 3 primary, includes comments from fire victims and local activists who suggest that PG&E customers would be better served if the utility was in public hands. An online petition funded by his campaign also calls for a public takeover of the utility.In local newspaper ads slated to run Tuesday, the union describes a state seizure of PG&E a “bird-brained idea” that would lead to higher energy rates and wouldn’t guarantee that PG&E operates in a safer manner.“Senator Sanders, you are just plain wrong on this,” Tom Dalzell, business manager for the union, says in a video ad posted Tuesday. “Publicly-owned utilities are capable of greatness. But they are also capable of bad management and bad luck, just the same as investor-owned utilities.”IBEW Local 1245, which represents 12,000 PG&E workers, says in its video that a public takeover would threaten union pensions, be expensive for the state and expose it to future wildfire liabilities. The union estimates that turning PG&E into a government-run utility would cost $100 billion.No Magic WordsSanders’ campaign shot back, saying “greed and corruption” at PG&E have led to the neglect of California’s power grid.“We cannot keep letting corporate profits stand in the way of safety and action on climate change,” Josh Orton, Sanders’ National Policy Director, said in a statement. “Bernie has a plan to transition to renewable energy and create millions of good-paying union jobs.”The IBEW local, which also represents members of government-owned power companies in Northern California, has been vocal in its opposition to public ownership of PG&E. Some of its members staged a protest recently in San Francisco when a state lawmaker introduced of a bill that would turn PG&E into a government-run utility. The union has also opposed a move by San Francisco to buy out PG&E’s power network within the city.“This isn’t Cinderella,” Dalzell says in the video. “There are no magic words that would change the fact that PG&E operates in high fire-risk areas at a time of serious climate change.”(Disclaimer: Michael Bloomberg is seeking the Democratic presidential nomination. He is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News).(Adds comment from Sanders campaign beginning in seventh paragraph.)\--With assistance from Emma Kinery.To contact the reporter on this story: Mark Chediak in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Joe Ryan at email@example.com, Pratish NarayananFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- PG&E Corp., the California utility that’s still struggling to emerge from bankruptcy court, is being dragged into another brutal arena -- the presidential campaign.A new ad from Senator Bernie Sanders blasts the power company for repeatedly sparking deadly wildfires, and uses the devastation to argue for his version of a Green New Deal. It signals that the contender for the Democratic presidential nomination sees PG&E as a useful foil as California gears up for its March 3 primary vote.Sanders has built a strong operation aimed at winning in the state, with more campaign offices there than any candidate in the race. He is leading among young voters, liberals and Latinos, who could make up one-fourth of the Democratic electorate in California.It’s not the first time Sanders has taken aim at PG&E. Last fall, as the company cut power across northern California to prevent fires in a wind storm, he slammed its “irresponsible corporate greed.” An online petition funded by his campaign calls for a public takeover of the utility, a possibility state Governor Gavin Newsom has also raised.Destroyed TownThe latest ad, which runs for almost three minutes, shows Sanders surveying burned out homes, as people criticize the company. A resident of Paradise, the town destroyed by a 2018 fire blamed on PG&E’s equipment, says the company only filed for bankruptcy to limit its payments to wildfire victims.It ends with a woman’s voice saying “If we’re going to be paying for everything that PG&E does, the people of California should have a say in how it is run.” Many state residents have already received their mail-in ballots for the primary vote.PG&E said it has already committed to $25.5 billion in settlements with wildfire victims. “We are committed to doing right by the communities impacted by wildfires, and to doing everything we can to reduce the risk of wildfires in the future,” company spokesman James Noonan said in an email.The Sanders campaign didn’t immediately respond to a request for comment.(Disclaimer: Michael Bloomberg is seeking the Democratic presidential nomination. He is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News).\--With assistance from Emma Kinery.To contact the reporter on this story: David R. Baker in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Joe Ryan at email@example.com, Pratish Narayanan, Christine BuurmaFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
For decades, the best urban planning simulation wasn't a simulation for urban planners at all, but the wildly popular city building game, SimCity, says Peter Calthorpe, an expert in the field and the co-founder of UrbanFootprint. Calthorpe began his career as an urban planner and designer in the late seventies, and in the mid-eighties he wrote the book on sustainable communities alongside the famous architect and designer, Sim Van der Ryn. Working on design and development projects across Portland, Salt Lake City, Los Angeles, and (my home state) Southern Louisiana, Calthorpe approached urban design through the lens of climate resilience and sustainability -- all the while developing the suite of tools that would become UrbanFootprint .