Why PG&E Stock Just Crashed
If PG&E sparks another wildfire, it will still have to pay for it.
Overview
California electric utility stock PG&E Corporation (NYSE: PCG) crashed 19.6% through 11:50 a.m. ET Monday after a legislative effort in Sacramento to limit utilities' exposure to lawsuits from insurance companies fell apart over the weekend.
Image source: Getty Images.
As Sacramento NBC affiliate KCRA 3 reports, Gov. Gavin Newsom was working to secure legislation that would partially insulate PG&E and similar utilities from liability for wildfires caused when their equipment malfunctions. When homes are destroyed in a wildfire, for example, homeowners claim compensation from their insurance companies -- which in turn try to mitigate their own losses by suing the electric utility they deem responsible for the fire. (Legally, the route used to do this is called "subrogation.")
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Originally published at www.fool.com.