PG&E Talking to Banks on Multibillion Dollar Bankruptcy Financing

Employees of Pacific Gas & Electric work in the aftermath of the Camp Fire in Paradise

California's largest investor-owned utility company, said Monday that it will file for Chapter 11 by January 29 and warned that it could be on the hook for as much as US$30-billion in costs related to wildfires in 2017 and 2018. "Whereas we're making progress as an organization in security and different areas, the board acknowledges the great challenges PG&E continues to face", mentioned Richard C. Kelly, PG&E's chairman.

PG&E said in a company filing Monday that it has only about $1.5 billion in cash and cash equivalents on hand.

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

As the utility company's financial status became more transparently dire, protesters have flooded into California Public Utilities Commission hearings requesting that they not create a safety net for the company; which would end up falling on consumers paying higher fees to bail them out.

Meanwhile, the company is widely reported to be considering filing for bankruptcy protection as its stock price has nose-dived after it said in November that it could be liable for billions of dollars in excess of its insurance coverage from fires both past year and in 2017.

State investigators have also blamed PG&E power lines for some fires in October 2017.

PG&E's announcement on Monday that it intends to file for Chapter 11 bankruptcy protection as early as this month, citing potential liability exceeding $30 billion due to wildfires, came a day after its chief executive officer, Geisha Williams, was ousted from her post.

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

PG&E's safety record has come under sharp scrutiny before.

A shortwave infrared (SWIR) satelite image of the Camp Fire in Magalia, Paradise, California, November 9, 2018.

Few politicians want to rush to the defense of a big utility, but many policy experts argue that PG&E wouldn't be in this position if it weren't for a unique California legal standard that makes utilities strictly liable for damages from wildfires linked to their equipment even if the utilities were not negligent or unreasonable.

Today's action confirms reports from Sunday that the company was set to notify its staff of a bankruptcy filing. "I have directed the San Francisco Public Utilities Commission to study any near and long-term impacts this bankruptcy will have on our city and to identify any and all options we have to ensure that everyone in San Francisco has access to clean, safe, and reliable power".

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

One, the Camp Fire, swept through the mountain community of Paradise and killed at least 86 people, the deadliest and most destructive blaze in state history.

California legislators passed a law allowing PG&E to pass on fire liabilities to customers to help it recover from the cost of the 2017 blazes. PG&E said the cause of that fire was still under investigation, but the agency Cal Fire is focusing on several of the utility's transmission lines and towers. "But victims' interests won't be served by pushing utilities into bankruptcy, converting wildfire sufferers into one more class of frustrated creditors pursuing inadequate funds".

"It's not going to wash away all the liability that they have", Potter said.

A bankruptcy filing is not assured, the sources said.



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