Utility sued for billions over California wildfire, seeks bankruptcy protection
- Author: David Armstrong Jan 17, 2019,
Jan 17, 2019, 1:56
Earlier in the day, PG&E announced it will file for Chapter 11 bankruptcy as it faces at least $30 billion in potential damages from lawsuits over catastrophic California wildfires in 2017 and 2018 that killed scores of people and destroyed thousands of homes.
"It will allow us to work with our regulators, policymakers and other key stakeholders to consider a range of alternatives to provide for the safe delivery of natural gas and electric service for the long-term in an environment that continues to be challenged by climate change".
PG&E's shares plummeted more than 48 percent during morning trading Monday.
This comes one day after the chief executive of the company stepped down. PG&E has been in controversy from last few months for the wildfire issues because the government accused the company's power lines for causing California's wildfire in 2017.
If PG&E is found legally responsible for some or all of the costs connected to the 2017 and 2018 Northern California wildfires, its liability could exceed $30 billion, according to the company's filing with the Securities and Exchange Commission on Monday.
State fire investigators said they have determined that PG&E's power lines sparked 18 wildfires in October 2017 that burned almost 200,000 acres, destroyed 3,256 structures and killed 22 people.
PG&E said it was required to give employees at least 15 days notice before it filed for bankruptcy, which it plans to do "on or about" January 29.
The plans have not been finalised and the communication could come later, the source said.
Today's action confirms reports from Sunday that the company was set to notify its staff of a bankruptcy filing.
"We would like to see it (bankruptcy) avoided, but we are not naive", Newsom said. Shares of PG&E were already down 63% since the start of the Camp Fire. He said the utility should "honor promises made to energy suppliers and to our community".
The state legislature cleared the way for PG&E to securitize debts related to deadly wildfires in 2017, but that does not include the costs of last year's blazes.
"This company has been dishonest, it has prioritized profits way over safety and there has been no effort on their part to change that", he said.
State officials are investigating whether the utility's equipment sparked the deadliest, most destructive wildfire in California history, a November Northern California blaze that killed at least 86 people and burned down 15,000 homes.
Last week, a federal judge proposed requiring PG&E to re-inspect its entire electric grid and "remove or trim all trees that could fall onto its power lines".
"All Californians sympathize deeply with the victims of our recent catastrophes, which caused dozens of deaths and wreaked unprecedented destruction across the state", said Ralph Cavanagh, California-based energy expert at the Natural Resources Defense Council. He's confident bankruptcy won't change the outcome of their lawsuits. "We are not in a situation where the cost of electricity is going to be stable", Wara said, "because of the cost of these fires, and the risks created because of future fires".