By Hudson Sangree

Pacific Gas and Electric reported multibillion-dollar losses in its quarterly and annual reports Tuesday but said in a separate five-year forecast that it expects sustainable financial performance after it emerges from Chapter 11 reorganization.

“Our focus now is on working with all key stakeholders, including elected officials and state regulators, to position PG&E for emergence as a financially stable company with a renewed and rigorous focus on safe operations and customer service,” CEO Bill Johnson said in a statement.

The company said it would not hold a call with analysts to discuss its Q4 results but included detailed slide presentations in its filings.

In its annual report, PG&E said it lost $7.7 billion ($14.50/share) in 2019, an increase over the $6.9 billion ( $13.25/share) loss recorded in 2018. Fourth-quarter 2019 losses totaled $3.6 billion ($6.84/share), down from $6.9 billion ($13.24/share) the utility said in its quarterly report.

The losses mostly resulted from the 2017 and 2018 wildfires that drove PG&E to seek bankruptcy protection in January 2019. The fourth quarter numbers include a $5 billion pre-tax charge related to its previously announced $13.5 billion settlement with victims of the November 2018 Camp Fire that leveled the town of Paradise, the October 2017 Northern California wine country fires that destroyed part of the city of Santa Rosa and the 2015 Butte fire in the Sierra Nevada foothills.

In its forecast, PG&E said it expects to invest $37 billion to $41 billion in infrastructure improvements during the next five years, resulting in an 8% growth in rate-based revenues. Most of the investments will go to hardening its grid against wildfires. The outlook lists serious risk factors, including future wildfire liabilities, but says PG&E could see nearly $20 billion in annual revenue growth by 2024.

Reducing wildfire risks and focusing on safety will help it avoid future losses, PG&E said. Two-thirds of its revenues come from owning and operating electric, gas and generation infrastructure, the utility said, with the remaining third coming from pass-through costs for procuring commodities.

U.S. Bankruptcy Judge Dennis Montali and the California Public Utilities Commission must approve PG&E’s bankruptcy plan by June 30 for the utility to be able to participate in a $21 billion state fund to insure utilities against future wildfires. The fund and its participation criteria were included in last year’s Assembly Bill 1054.

Access to the insurance fund is regarded as vital to the company’s future because California holds utilities liable for fires ignited by their equipment regardless of negligence.

“Wildfire settlements, regulatory resolutions, the enactment of AB 1054 and [the] establishment of a multi-year investment and rate roadmap resolve uncertainty and provide stability,” the company said. PG&E has secured $59 billion for reorganization, and an additional $27 billion may be raised through future public offerings.

The company assured the financial sector Tuesday that it’s on track to meet the June 30 deadline because it has reached settlement agreements with fire victims, insurance companies and local governments in deals worth $25.5 billion.

“PG&E has made significant progress in our Chapter 11 cases over the past year,” Johnson said. “We have resolved essentially every consequential issue within the bankruptcy court’s jurisdiction, most notably reaching a [$13.5 billion] settlement with wildfire victims.”

However, many fire victims have begun to question the deal because it allocates nearly $4 billion of the $13.5 billion to reimbursing government entities, including the Federal Emergency Management Agency. (See What Spring Could Bring for PG&E.)

Gov. Gavin Newsom, too, has challenged the bankruptcy plan, saying PG&E would have so much debt that it wouldn’t have the tens of billions of dollars needed to harden its grid.

The utility said it is continuing to work with the governor’s office to resolve his concerns, but it acknowledged in its SEC filings Tuesday that its “ability to meet the eligibility and other requirements [of AB 1054] may be adversely impacted by the California governor’s review of the proposed plan.”