Monday, 20 June 2011

PG & E Has Nearly $ 1 Billion In Insurance

PG & E Corp. said Friday that federal regulators that its usefulness has almost $ 1 billion in fire insurance to cover the liabilities of the natural gas pipeline explosion in San Bruno fatal, but added that its financial position "can negative impact "if the insurance coverage or below is not available.

Fearful investors fled stocks PG & E, erasing about $ 1 billion in market value of San Francisco company. PG & E has dropped $ 4.03, or 8.4%, to $ 44.21 in the wholesale trade.

Pacific Gas & Electric Co., the largest company PG & E said it was "take responsibility" if it is found to be responsible for gas explosion Thursday in the pipeline.

"We are determined to do right and what is appropriate to help all families and others who were affected by this tragedy," said the president of the usefulness of Chris Johns Friday at a news conference.

The unusual nature of the incident which took place in a residential area, could ratchet up costs far beyond pipeline incidents in recent times, analysts said, but several expressed confidence that PG & E has a adequate insurance and financial resources to manage injuries, fines and possible lawsuits and repairs.

Other pipeline accidents eventually led to damage of about $ 100 million to U.S. $ 200 million, analysts said. But he stressed that most of these incidents occurred in relatively remote areas away from neighborhoods.

"It's very rare that this occurs in a residential area. They usually occur in the construction and excavation in places without permission," said Shelby Tucker, director general of electricity at Oppenheimer & Co. "It's really hard to tell if your insurance covers this, and now we're talking about lives lost, takes a completely different level. "

Houston-based El Paso Corp., has reached a series of out-of-court two relatives of a family wiped out in August 2000 the explosion of a gas pipeline near Carlsbad, NM are presented in a single contract: $ 14 million to pay victims of the December 1. To resolve the federal claims, the company has agreed to pay for $ 101500000, which included at least $ 86 million to modify its system of pipes.

In 1999, gas pipeline ruptured and caught fire in Bellingham, Washington, killing three people. Olympic Pipe Line Co. paid $ 112 million in civil penalties, criminal fines and safety improvements, and two former executives were sentenced to prison for contributing to the leak.

In a filing with the Securities and Exchange Commission, PG & E Corp., said it maintains liability insurance for damage caused by fire "for approximately $ 992 million in more than a deductible $ 10,000,000 . "Analysts estimate that only a finding of negligence could prevent the usefulness of insurance.

"They did a great job with their operations in the past," said Tucker. "It's certainly a surprise. There were some problems, but nothing of this magnitude."

But the long-term utility to the critique of Reform Network Utility, or turn, suggested that PG & E may slow the residents' complaints about gas fumes. TURN spokeswoman Mindy said Spatti PG & E had promised to improve its response to the 2007 opinion, after gas leak killed the person in Rancho Cordova, California

"In San Bruno, again customer did the right thing and called PG & E when they smelled gas. PG & E had the correct answer, the explosion might not have happened, "said Spaten.

Johns said the federal investigators, state and utility have been looking into the reports.

Some Wall Street analysts said it was too early to determine the economic consequences of PG & E, while others believe that the investors 'panic' in case it was an overreaction.
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