Economy

PG&E, utility tied to deadly California wildfires, will file for bankruptcy

PG&E, utility tied to deadly California wildfires, will file for bankruptcy

Pacific Gas & Electric Corp., the parent company of California's largest utility, plans to file for Chapter 11 bankruptcy protection amid what could be billions of dollars in liability costs over the massive wildfires that have torn through California in recent years.

Simon said that a court-supervised bankruptcy "will best enable PG&E to resolve its potential liabilities in an orderly, fair and expeditious fashion".

In the press release sent out regarding the bankruptcy, PG&E also stated that it "remains committed to assisting the communities affected by wildfires in Northern California, and its restoration and rebuilding efforts will continue". The company said it would look to hire a new chief executive with "extensive operational and safety expertise".

US utility Pacific Gas and Electric Company (PG&E) disclosed on Monday that it will file for bankruptcy.

The company, based in San Francisco, is required by law to give 15 days' notice of bankruptcy. "Everyone's immediate focus is, rightfully, on ensuring Californians have continuous, reliable and safe electric and gas service".

The utility's stock price is down more than 80 per cent since November, driven by fears that PG&E equipment was responsible for the wildfires that raged through Paradise, Calif., killing 86 people.

"While we are making progress as a company in safety and other areas, the board recognizes the tremendous challenges PG&E continues to face", PG&E Chairman Richard Kelly said Sunday. State investigators found PG&E; lines were responsible for igniting 18 wildfires in October 2017, and are still probing whether the utility's equipment caused the devastating Camp Fire a year ago.

The utility said the bankruptcy process will not affect electric or natural gas services for customers.

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The announcement Monday follows the resignation of the company's chief executive, Geisha Williams, a day earlier.

And regulators are now investigating the utility's potential culpability in November's Camp Fire, the deadliest in state history. Shares of PG&E were already down 63% since the start of the Camp Fire.

Barricades surrounded the company's headquarters office in downtown San Francisco after the Chapter 11 announcement. Just two 2018 wildfires, the Camp and Woolsey fires, are estimated to have done $8.6 billion in damage.

Shares in the company are expected to fall by more than 50% when trading begins on Monday.

"California's existing liabilities laws weren't made for the new normal that we face going forward with these climate driven wildfires", Steve Malnight, a senior vice president at PG&E, told NPR member station KQED in August.

As of this afternoon, PG&E stock was down almost 50 percent.

That's a fairly concise statement of the huge challenge PG&E and the state of California will face in the months and years of bankruptcy reorganization to come.

A federal judge last week proposed restricting PG&E from using power lines deemed unsafe during high winds in this year's fire season.


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