PG&E shares rebound as regulator soothes bankruptcy fear

By Nichola Groom and Noel Randewich

(Reuters) – The head of California’s top utilities regulator said on Friday that utilities must be able to borrow money cheaply in order to properly serve ratepayers, affirming comments about PG&E Corp (N:) that sent its stock surging 37 percent.

PG&E’s stock had nosedived this week on fears that without help from California’s government, the utility could go bankrupt should it eventually be found responsible for the state’s deadliest-ever wildfire. The fire, which erupted a week ago and destroyed the town of Paradise, has killed at least 63 people.

California Public Utilities Commission President Michael Picker told Reuters that with PG&E potentially facing mounting costs from wildfires, the regulator would also consider potential options to restructure the company, including separating its electricity and gas units.

Picker on Thursday told investors on a conference call that he could not imagine allowing the state’s largest utility to go into bankruptcy, sending PG&E’s stock up as much as 40 percent in extended trade.

“I was stunned and terrified” after learning PG&E’s stock surged so much, Picker said.

PG&E shares closed up 37.5 percent, or $6.66, at $24.40 on Friday.

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