Fixed on ESG, Ep. 16 – The Price of Power: The Impact of Wildfires on Utilities

Damaged power lines are a leading cause of wildfires around the world and serve as a significant vulnerability to the service providers who operate them. The cost of upgrading and repairing transmission and distribution lines is high, but costs related to the legal liabilities faced by these entities in the face of a wildfire can be enormous and, therefore, can majorly impact the credit risk of utilities debt issuers.

In this episode of Fixed on ESG, Taylor Chatlos, ESG Specialist, and Maxwell Hausle, U.S. Investment Grade Credit Research Analyst, provide an in depth look into how utilities providers balance the mitigation of wildfire risks with rate increases for customers, the litigation risks that providers could face if found liable for damages, and the consequential impact on credit quality for utilities issuers that are found culpable. Get our insights on what debt investors need to consider when it comes to these issuances and why deep credit research analysis and active, fixed-income strategies can help investors make more informed choices.

Recorded on August 29, 2023.

PGIM Fixed Income
PGIM Fixed Income

PGIM Fixed Income is a global asset manager offering active solutions across all fixed income markets. The company has portfolio management and research teams in Newark, New Jersey, London, Amsterdam, Zurich, Munich, Singapore, Hong Kong, and Tokyo. As of December 31, 2022, the firm has $770 billion of assets under management, including $350 billion in institutional assets, $169 billion in retail assets, and $251 billion in proprietary assets. Nearly 1000 institutional investors entrust PGIM Fixed Income with their assets.

Rupal Shah
Principal, Client Advisory Group
655 Broad Street
Newark, NJ, USA 07102

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