PG&E, already facing liability for several major wildfires in Northern California last October, told investors Thursday that its insurance premium costs are significantly higher than just a few years ago and it plans to transfer some of the financial risk to insurance and capital markets. The utility holding company said it expects to have agreements for new risk coverage executed in the coming days.
At the same time, PG&E said that it has experienced credit rating downgrades from three major rating agencies, raising the possibility of higher financing costs and cautioned that it may have to scale back on some of the utility's clean energy projects. The company also described how its extensive fleet of airplanes and helicopters is helping during wildfire season in detection and fire response efforts.
In remarks during the company's second-quarter earnings conference call Thursday, PG&E CEO Geisha Williams said the utility is "seeing negative impacts in the insurance markets as providers are adjusting to the increased frequency and severity of wildfires across the state, coupled with the unsustainable strict liability standard."