Electric and natural gas utility giant PG&E Corp. on Monday said it will file for bankruptcy protection amid billions of dollars of potential liability for its role in recent California wildfires.
The announcement, which follows a California-mandated 15-day advance notice of bankruptcy, is an effort to reorganize to ensure the “orderly, fair and expeditious resolution” of its liabilities for the 2017 and 2018 wildfire seasons, which analysts say could be more than $30 billion. It said last week it has just $1.6 billion of cash or cash equivalents on hand.
The San Francisco-based company, whose main unit is Pacific Gas and Electric Co., had said late Sunday that Geisha Williams, its CEO for less than two years, would resign.
“The people affected by the devastating Northern California wildfires are our customers, our neighbors and our friends, and we understand the profound impact the fires have had on our communities and the need for PG&E to continue enhancing our wildfire mitigation efforts,” interim CEO John Simon said in a statement.
“We believe a court-supervised process under Chapter 11 will best enable PG&E to resolve its potential liabilities in an orderly, fair and expeditious fashion,” he continued. “We expect this process also will enable PG&E to access the capital and resources we need to continue providing our customers with safe service and investing in our systems and infrastructure.”
PG&E told its customers in a letter that bankruptcy “is the only viable option for meeting these goals.” It said electric and gas service would not be interrupted.
California officials have pinned numerous fires in 2017 and 2018 on PG&E due to electric lines or other equipment that broke. Under state law, even if the company followed all relevant rules and laws, it can be held liable for the fire’s damages.
State investigators are still probing last year’s Camp Fire, which was the most costly wildfire in United States history, and PG&E could be at fault.