In Wake of Catastrophic Fires, PG&E Announces Plans to File for Bankruptcy

Geisha Williams speaks during the 2018 CERAWeek by IHS Markit conference in Houston Texas on Thursday

Geisha Williams speaks during the 2018 CERAWeek by IHS Markit conference in Houston Texas on Thursday

PG&E Corp's announcement that it will file for bankruptcy, citing massive potential liability from deadly wildfires, puts California politicians in quandary, whether to offer a bailout or risk allowing the state's largest private utility to fail.

"Everyone at PG&E knows that our single most important responsibility is safety, and we recognize that we must work even harder every day to demonstrate that the safety of our customers, our communities, our employees and our contractors comes first". The company said it expects to have approximately $5.5 billion of committed debtor-in-possession financing when it files for bankruptcy.

Shares of PG&E Corp. had plummeted more than 51 percent as of 3 p.m. ET on Monday. 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.

PG&E will only pay for a fraction of its negligence in the end, Consumer Watchdog said, but sought Chapter 11 protection to leverage paying as little as possible. The California Insurance Department said the Camp Fire and two other wildfires previous year destroyed 19,000 homes and businesses in the state.

PG&E, the state's largest utility, said Monday it will file for bankruptcy on January 29, after a 15-day waiting period required by California law.

PG&E said the bankruptcy filing will not impact its services for 16 million customers.

Again, the source of the fire was traced back to PG&E's transmission tower.

Geisha Williams resigned as regulators investigate whether the company's powerline infrastructure contributed to the Camp Fire, which killed 86 people in northern California in November. PG&E has come under intense scrutiny following the devastating wildfires in California after it emerged that some of its equipment may have sparked the blazes.

PG&E's decision to replace its chief executive is likely meant to satisfy state regulators rather than investors, said Paul Patterson, an analyst who follows PG&E at Glenrock Associates LLC.




"The report of PG&E's likely bankruptcy is deeply concerning news for the state, fire victims, and ratepayers", California State Assembly member Chris Holden, a Democrat, said in a statement.

PG&E also negotiated a US$350-million loan last April with Royal Bank of Canada and two Japanese financial institutions that is "payable immediately" in the event of a bankruptcy or insolvency, according to securities filings.

"You avoid a situation where some jury in California thinks PG&E is responsible for this fire, so we should hit them up for all these damages and let them sort out how they pay for it", Wynne said.

Patterson is the vice chair of the Assembly's Utilities and Energy Committee.

"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.

It is believed the fire was started when a PG&E power line came in contact with nearby trees.

It remains to be seen how PG&E's bankruptcy will affect California's PV sector. He's confident bankruptcy won't change the outcome of their lawsuits.

They warned that allowing the utility's finances to collapse could threaten some of California's most ambitious plans, including a goal to shift the state entirely to green energy by 2024 and a long-standing push to create an electrified high-speed rail network.

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