Saturday, November 09, 2019

PGE bankruptcy and power blackouts will stir up activists


The Wall Street Journal has a major story this weekend by Peg Brickley and Gretchen Morgenson, “Fire victims confront PG&E Bankruptcy”


The subtitle is “Chapter 11 rules essentially put a lid on compensation to California wildfire payouts.”

The story is disturbing.  My parents had heavy investment in utility stocks, especially a few decades ago, as they were very stable and wound up being a major reason that the family was prepared, for example, for mother’s long decline.

I haven’t noticed any overall portfolio fund damage from this, but some mutual funds might be affected.  I do have some Dominion Power.

Shareholders as individuals are not responsible for this (other than through the loss of value of their holdings).  I wonder if activists will try to change all this. You could see much more social pressure in social media with campaigns to support the victims.  
   
You might see push for state takeover of this and some other utilities. 
  
There is a good question to ask, whether PS&G should have anticipated the growth of this fire risk due to climate change over the years.  I can recall a big LA fire in, as I recall, 1978.

By the late 1980s, the media was first starting to pay more attention to western wildfires. 
    
This article in Forbes explains, by the way, why global warming, by warming the arctic, forces cold snaps south and generates the wind events like those in California. The average temperature difference between different latitudes shrinks.

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