California gov: State could take over PG&E in wake of bankruptcy crisis

California gov: State could take over PG&E in wake of bankruptcy crisis
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Gov. Gavin NewsomGavin NewsomCalifornia grid operator calls on residents to conserve electricity amid heat wave California hydroelectric plant expected to shut down for the first time in 50 years Beyond California, a record year for recalls MORE (D-Calif.) threatened Friday that the state of California could take over the Pacific Gas and Electric utility company if it does not pull itself out of bankruptcy by mid-2020.

"PG&E as we know it may or may not be able to figure this out. If they cannot, we are not going to sit around and be passive," Newsom said at a press conference. "If Pacific Gas and Electric is unable to secure its own fate and future ... then the state will prepare itself as backup for a scenario where we do that job for them." 


PG&E has recently come under intense scrutiny for cutting power to thousands of people as it tries to prevent wildfires. The company filed for bankruptcy in January while it was facing billions of dollars in claims tied to deadly fires. 

Newsom said he intends to reach a deal with the company and its stakeholders that should get PG&E out of bankruptcy by June 30, 2020.

"We want to bring everyone together, we want to broker a deal. It's what we do," he said.

"PG&E as we know it cannot persist and continue," the governor added, noting that the company has to be "completely transformed, culturally transformed, operationally transformed with a safety culture first and foremost as part of that fundamental transformation." 

Besides the preemptive shutoffs, known as Public Safety Preventative Shutoffs (PSPS), the utility firm has also been accused of starting deadly wildfires. The company has filed reports admitting its equipment may be linked to at least three of the over 12 fires in the past week. 

"We cannot afford the kind of PSPSes we've experienced over the course of the last week. We had people out in some circumstances for one full week without power," Newsom said. "You gotta consider the life impacts of these power cutoffs."