Standard and Poor's slashed PG&E's credit rating to junk status as the utility grapples with the fallout from two years of devastating and deadly wildfires in Northern California.
The ratings firm cut the company's key rate five notches to "B" from "BBB-." The company's stock and bonds have been weighed down since November and took a sharp dive Monday on bankruptcy speculation, with share prices falling a total of roughly 30 percent in trading Monday and Tuesday. The company's stock has lost about 60 percent of its value in the past three months.
The utility also announced Tuesday in a regulatory filing that Patrick Hogan, senior vice president of the electric operations unit, will be replaced by Michael Lewis, who has served as vice president of electric distribution operations at the utility. Hogan will retire from the utility on Jan. 28.
PG&E is contending with potentially crippling liability costs related to Butte County's Camp Fire, which killed 86 and destroyed more than 15,000 homes in and around the town of Paradise, making it the deadliest and most destructive wildfire in California history. No cause has been determined, but Cal Fire investigators are looking into the potential it was sparked by PG&E equipment. The utility reported to the California Public Utilities Commission of two power outages on transmission lines shortly before the Camp Fire began on the morning of Nov. 8.
NPR reported Friday that PG&E was exploring means to cover its potentially huge liability costs, including selling off its natural gas division and key real estate assets, like its San Francisco headquarters. NPR reported that proceeds from the sale of PG&E's gas division would be used to set up a fund to pay billions of dollars in potential claims.