PG&E (PCG), a long-established name in the electric utilities industry, continues to face investigations regarding its connection with the ongoing Dixie Fire in California. Nevertheless, can its stock price rebound in the near term on the company’s announcement of new initiatives to help prevent wildfires? Let’s find out.PG&E Corporation (PCG) is a San Francisco-based holding company that operates primarily through its subsidiary, Pacific Gas and Electric Company, which is one of the largest combined natural gas and electric energy companies in the United States. On July 21, the company announced a new initiative to expand the “undergrounding” of electric distribution power lines in high fire threat districts (HFTD) to harden its system further and help prevent wildfires.
However, the stock has lost 23.7% over the past six months and 14.1% over the past month to close yesterday’s trading session at $8.95.
PCG’s operating expenses for the second quarter (ended June 30, 2021) increased 7.8% year-over-year to $4.58 billion, driven by costs related to the amortization of wildfire insurance fund contributions, the investigation of remedies, reorganization under Chapter 11, and wildfire-related expenses. It also witnessed a decline in interest from the hedge funds. So, the stock’s prospects look bleak in the near term.