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

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

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

Pacific Gas & Electric Corp., the parent company of California's largest utility, plans to file for Chapter 11 bankruptcy protection amid what could be billions of dollars in liability costs over the massive wildfires that have torn through California in recent years. Simon is serving as interim chief executive officer for the company.

The company said Monday that it has only about $1.5 billion in cash and cash equivalents on hand. The utility faces dozens of lawsuits from people who lost loved ones and property in the fires, and under a legal standard known as "inverse condemnation", utilities in California are held liable for damages caused by fires started by their equipment, even if they are found to be safely and legally operating that equipment.

The Camp fire, which obliterated the town of Paradise, is the deadliest and most destructive wildfire in California's history and was the costliest natural disaster worldwide in 2018. And that figure does not include potential punitive damages, fines and penalties or damages related to future claims.

Fire officials have not yet officially said what caused the blaze, but have focused on power equipment.

Geisha Williams announced her resignation from PG&E amid growing concerns over the company's role in the devastating Camp Fire, which killed at least 86 people and destroyed more than 18,800 homes and buildings.

The company says will be able to gain access to capital and resources it needs to continue providing service to customers as it restructures.

The company was acting under a new state law requiring it to tell employees at least 15 days before a change of control in the company - including a bankruptcy filing.

"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.

In October 2017, a series of wind-driven wildfires, aptly named the Northern California "firestorm", ripped through several counties.

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Barricades surrounded the company's headquarters office in downtown San Francisco after the Chapter 11 announcement.

PG&E said it expects the Chapter 11 process to "support the orderly, fair and expeditious resolution of its potential liabilities" from the California wildfires.

The stock is down 88% from late 2017, before wildfires devastated PG&E's service areas.

Per a BBC report, the utility firm faces liabilities that could reach $30 billion. But PG&E has suggested it may be responsible. "It's creating really significant financial risk to the utilities which will limit our ability to continue making the investments we need going forward".

The utility set up barricades at its headquarters in San Francisco before additional details were set to be revealed at a news conference.

CNN reported that the company now faces at least $7 billion in claims from the Camp Fire alone.

A federal judge last week proposed restricting PG&E from using power lines deemed unsafe during high winds in this year's fire season.

PG&E supplies electricity and gas to more than 5 million California households and has more than 20,000 employees.

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