Economy

PG&E to File for Bankruptcy Amid Mounting Liabilities from CA Wildfires

PG&E to File for Bankruptcy Amid Mounting Liabilities from CA Wildfires

California's wildfires in 2017 and 2018 will likely cost tens of billions of dollars.

"PG&E expects that the Chapter 11 process will, among other things, support the orderly, fair and expeditious resolution of its potential liabilities resulting from the 2017 and 2018 Northern California wildfires, and will assure the company has access to the capital and resources it needs to continue to provide safe service to customers", the company said. In a PG&E report last month, the company outlined how employees discovered damaged power towers minutes before the Camp Fire broke out. The Legislature a year ago gave PG&E a partial bailout, instructing the Public Utilities Commission to take utilities' finances into account when deciding whether to let ratepayers absorb any of the costs of wildfire claims.

The Camp Fire, the most deadly and destructive fire in state history, has yet to be assigned an official cause, but PG&E reporting having an equipment malfunction near the spot around the same time the fire ignited.

PG&E's financial woes have already spread to the companies that supply its natural gas and generate electricity for its customers.

PG&E's general counsel John Simon will serve as interim CEO until the board of directors finds a new head.

The company has about $1.5 billion in cash heading into bankruptcy and is negotiating with lenders to get about $5.5 billion more in debtor-in-possession financing to stay in business and continue providing power and gas to millions of Californians, according to Reuters.

PG&E said Monday that Williams will receive severance.

More news: Leishman third as Kuchar wins Sony Open

Shares of PG&E fell as much as 52 per cent in pre-market trading. But PG&E has suggested it may be responsible.

Advisers said they expect it may take up to two years for the company to emerge from bankruptcy.

Pacific Gas & Electric announced Sunday evening that CEO Geisha Williams will step down amid the fallout from a spate of deadly wildfires that may have brought the California utility to the brink of bankruptcy.

Williams was CEO for less than two years, but she had been with PG&E since 2007.

That would bring up another concern for Northern California residents, many of whom haven't forgotten the San Bruno gas explosion that killed 8 people and leveled a neighborhood in 2010: Who would be their new gas company or companies, and would they be any better than PG&E?

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


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