PG&E, owner of biggest U.S. power utility, files for bankruptcy

The Removal of PG&E Stock Proves Your Index Fund Isn’t That Passive

Wildfire-scorched PG&E, California's biggest utility, files for bankruptcy

WESTERVELT: Ayotte says a key impetus for the filing - in California, utilities can be held liable for wildfire damages if the company sparked the blaze regardless of whether they were negligent.

These promises will likely come up in a Wednesday hearing where the federal court judge overseeing PG&E's criminal probation for its role in causing the deadly 2010 San Bruno pipeline explosion will consider ordering PG&E to reinspect, fix and clear vegetation from the entirety of its 106,000 miles of transmission and distribution grid by the start of summer this year. The measures the judge has proposed would be part of the utility's probation.

Even as an official report published Thursday revealed the company's power lines were not the source of the deadly Tubbs Fire in the Sonoma and Napa Valleys in October 2017, PG&E said it "still faces extensive litigation, significant potential liabilities and a deteriorating financial situation".

Pacific Gas & Electric, a utility company that serves 16 million California residents, filed for Chapter 11 bankruptcy protection Tuesday, citing up to $30 billion in potential liability from wildfires in 2017 and 2018.

Wildfire damage has become a multibillion-dollar liability for the utility. But Cal Fire did find a year ago that PG&E lines were the cause of several fires that killed at least 15 people and razed over 5,000 homes in the fall of 2017, including 12 cases where the utility was allegedly in violation of safety or maintenance procedures.

PG&E, which had a debt burden of more than $18 billion, said earlier this month it would need to pursue a court-supervised reorganization in the aftermath of the blazes, including November's so-called Camp Fire.

The fire claimed the lives of 86 people and it destroyed more than 14,000 homes. That finding spared PG&E from billions in liability. The cause is still under investigation, but suspicion fell on PG&E after it reported power line problems nearby around the time the fire broke out.

Bankruptcy may not spare PG&E from carrying out any orders issued by Alsup. PG&E has stated in recent court filings that such an effort would require hiring hundreds of thousands of workers and cost between $75 billion and $150 billion. The company said today it has also filed a motion for court approval to enter into a USD5 million agreement to provide it with "debtor-in-possession" financing that will provide it with the capital it needs to ensure essential maintenance and continued investments in safety and reliability for the expected duration of the Chapter 11 cases. It could lead to higher bills for customers and reduce the size of any payouts to fire victims by consolidating all their cases in bankruptcy court.

PG&E said the bankruptcy will not affect electric or gas service and will allow for an "orderly, fair and expeditious resolution" of wildfire claims.

Legal experts say the bankruptcy will probably take years to resolve and result in higher rates for PG&E customers.

"I just know in my heart of hearts that we need to have a change in management, which we've had some, and we need to have a change in the boardroom", Dodd said. "And this will take years to sort out".

BlueMountain Capital Management LLC, a NY investment firm that bought shares right before the stock collapsed, has challenged the California power giant's plans to seek bankruptcy protection.

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