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California has faced numerous wildfires in recent memory as climate change-induced weather wreaks havoc on the Golden State. Which companies could be affected by the ongoing Park Fire in Northern California?
Park Fire Rundown: The Park fire, the largest wildfire currently burning in the U.S., has ravaged over 426,000 acres in Northern California, particularly within Lassen National Forest, according to the New York Times.
The fire, ignited by an arson attack on July 24 near Chico in Butte County, has destroyed hundreds of homes and structures and was 34% contained as of Wednesday.
The fire spread rapidly due to hot, dry conditions and dense vegetation. Due to the region’s rugged terrain, firefighters face difficulties in managing the fire. This fire has become the fourth largest in California history and could surpass the third-largest Mendocino Complex fire.
Experts attribute its intensity to climate change’s impact on California’s weather conditions. The hotter, drier climate extended and worsened wildfire seasons.
The fire is in a similar region to the deadly 2018 Camp Fire in Butte County.
Market Implications: California wildfires can negatively affect several companies, including those in the insurance, utilities and logistics industries.
Hanover Insurance Group Inc (NYSE:THG) and Mercury General Corp (NYSE:MCY) each took hits in the aftermath of the 2018 Camp Fire.
It is unclear what PG&E Corp‘s (NYSE:PCG) exposure is to the Park Fire. The utility provider, which supplies electricity to the region, confirmed that it left some customers without power. A failure in PG&E’s electrical infrastructure caused the 2018 Camp Fire; the company later pleaded guilty to the deaths of 84 victims of the fire.
Water utility firm California Water Service Group (NYSE:CWT) operates in Chico and nearby Oroville.
Union Pacific Corp (NYSE:UNP) seemingly operates railway lines close to the site of the fire. The lines connect Sacramento to the Pacific Northwest and Reno, Nevada.
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