Thursday, 17 January, 2019

PG&E to File for Bankruptcy Amid Mounting Liabilities from CA Wildfires

US wildfires push energy firm PG&E to bankruptcy protection PG&E to declare bankruptcy
Nellie Chapman | 14 January, 2019, 19:12

John Geesman, an attorney and energy consultant, and former member of the California Energy Commission, said the bankruptcy had seemed inevitable in recent weeks as the utility's financial situation began "cascading downward".

PG&E has already asked state regulators for a $1 billion rate hike, beginning in 2020, to help cover the increased costs of improving its fire safety.

The PG&E board of directors is pushing Williams out as CEO over fallout from the company's liability in sparking deadly wildfires across California.

The company's board chose to oust CEO Geisha Williams and undergo a restructuring at a board meeting this weekend in San Francisco, according to a source familiar with the matter.

"PG&E expects that the Chapter 11 process will, among other things, support the orderly, fair and expeditious resolution of its potential liabilities resulting from the 2017 and 2018 Northern California wildfires, and will assure the company has access to the capital and resources it needs to continue to provide safe service to customers", the company said.

"The company does not expect any impact to electric or natural gas service for its customers as a result of the Chapter 11 process", the statement read.

Earlier this month, NPR reported that PG&E has developed a plan, dubbed "Project Falcon", to sell off its natural gas division as a way to fund the billions of dollars in potential claims from the California wildfires. On Sunday, the company started searching for a new leader after Geisha Williams, 57, quit as CEO.

Shares of PG&E fell as much as 52 per cent in pre-market trading.

Richard Kelly, chairman of PG&E Corp., said a Chapter 11 filing "represents the only viable option to address to the company's responsibilities to its stakeholders".

Fire officials have not yet officially said what caused the blaze, but have focused on power equipment. "I value the opportunity I've had to lead PG&E and wish all of my colleagues well".

Williams knew the risks that she faced because of wildfires liabilities. The PG&E (PCG) board said it would look to hire a new chief executive with "extensive operational and safety expertise".

The utility may face up to $30 billion in damages from devastating wildfires in California over the last two years. The Nov. 8 fire destroyed Paradise and killed 86 people, more than any other in state history.

-With assistance from David R. Baker and Peter Blumberg.