A lack of legislative and legislative reforms to reduce the risk of California power tools could leave the state without investment owned by investors before the 2019 fire season, according to a summary published Tuesday by S & P Global Ratings Inc.  I its report said S&P that California's Liability Laws effectively enforce tools to act as state reinsurers, creating new risks that they were never supposed to take on.
"We don't think a power tool is large enough, sufficiently diversified, or sufficiently capitalized to be a reinsurer," says S & P in the report that responds to investors' most frequently asked questions about California-based tools, PG & E Corp.. , voluntary bankruptcy registration.
As a result, S & P said it could lower the values of Edison, Southern California Edison Co. and San Diego Gas & Electric Co. with one or more scores within the next few months.
"This indicates that t he issuer's credit rating for these devices may be below investment class before the beginning of the 201
PG & E filed for bankruptcy due to the risk of incurring significant debts after 2017 and 2018 fires and the uncertainty surrounding its recoveries through the legislative process, the report says.
"We believe that potential liability risks are significant in California and that the regulatory framework for resolving these risks at best is unclear. Consequently, we believe that the electric tools in California are facing ongoing and unresolved risks associated with future fires," says S & P in the report.
Due to this lack of clarity, each of the other California tools may possibly follow PG & E's leadership if they face a catastrophic firearm in 2019 or later, it said.
California's "inverse condemnation" law, if a tool's facilities are determined to be the root cause of a fire, the tool can be responsible for all firewall property damage and other associated costs without the tool being negligible, the report says.