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Saturday, June 3, 2023

PG&E to Expand Coverage of Underground Power Lines in California

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To reduce the risks and incidents of wildfires, Pacific Gas and Electric Company, popularly as PG&E, (PCG) has announced that it will expand the coverage of underground electric distribution power lines in High Fire Threat Districts (HFTD). PG&E’s initiative of undergrounding 10,000 miles of power lines in California will be carried out over the next few years. (See PG&E stock chart on TipRanks)

Apart from decreasing wildfire incidents, underground power lines reduce the need for Public Safety Power Shutoffs (PSPS), which are conducted on dry windy days to prevent vegetation from contacting live power lines.

CEO of PG&E, Patti Poppe, said, “We want what all of our customers want: a safe and resilient energy system. We have taken a stand that catastrophic wildfires shall stop.” She added, “We will gladly partner with policymakers and state and local leaders to map a path we can all believe in.”

Two months ago, Barclays analyst Eric Beaumont reiterated a Hold rating on the stock and lowered the price target to $14 from $15 (47.5% upside potential).

Beaumont believes the utility market to be undervalued, compared to broader equities, U.S. Treasuries and corporate bonds. Nevertheless, he sees gradual improvement in the valuations of utilities.

Consensus among analysts is a Moderate Buy based on 2 Buys and 2 Holds. The average PG&E price target of $14.88 implies 56.8% upside potential.

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The post PG&E to Expand Coverage of Underground Power Lines in California appeared first on TipRanks Financial Blog.

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