How Will PG&E Bankruptcy Affect Service And Rates?
- Author: Darren Santiago Jan 17, 2019,
Jan 17, 2019, 2:00
US officials are investigating whether equipment from the power company sparked the November wildfire in northern California that led to the deaths of 86 people - the deadliest and most destructive blaze in California history.
"While PG&E announced its intent to file bankruptcy today, the company should continue to honor promises made to energy suppliers and to our community", Newsom stated. That does not include claims from 2018 wildfires.
California law says utility companies can be held liable for fire damage caused by their equipment, even if they weren't negligent in maintenance.
The move by Pacific Gas & Electric Corp., expected by the end of the month, would be the biggest bankruptcy by a utility in USA history, legal experts said. "The process also will enable PG&E to access the capital and resources we need to continue providing our customers with safe services and investing in our systems and infrastructure." .
However, under state law, the company needs to give a prior 15 days to its employees and investors before it declares the bankruptcy and many people are waiting for this notice.
It would allow PG&E to hold off creditors and continue providing electricity and natural gas without interruption to its 16 million customers in Northern and central California while it tries to put its finances in order.
The company in its filing with the SEC on Monday said its potential liabilities from all the fires combined could exceed $30 billion. "The company also is exploring selling key real estate assets, including its San Francisco headquarters, and moving its operations elsewhere in the Bay Area, the sources say".
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The company said it is facing nearly 50 lawsuits related to last November's Camp Fire in Paradise, along with hundreds of lawsuits from fires in Northern and Southern California in 2017.
"This is not a surprise, it's been coming for a while", said Michael Wara, director of the Climate and Energy Policy Program at Stanford University, who added that PG&E faced "severe challenges" after the Camp Fire in Paradise late previous year. But safety is an issue that has dogged the beleaguered utility for months.
Shares of PG&E Corp. had plummeted more than 51 percent as of 3 p.m. ET on Monday.
Around two-thirds of the company's market value has been wiped out since the company said following the fire that there were equipment failures near its origin point.
The legislature and the governor could decide to allow PG&E to pass along the costs associated with victim lawsuits and other fire losses to ratepayers, as they did a year ago for a series of deadly northern California blazes in 2017. Additionally, the utility's CEO Geisha Williams resigned. She was born in Cuba, making her one of the few Latina CEOs of a Fortune 500 company. The company acknowledged in a court filing in November that it had detected a problem on a transmission line 15 minutes before the first report of the Camp Fire. The utility is also under scrutiny for blazes in 2017 that devastated the wine region in Northern California and left more than 40 people dead.
PG&E supplies electricity and gas to more than 5 million California households and has more than 20,000 employees.
PG&E faces a lawsuit brought by more than three dozen plaintiffs alleging the fire was started by faulty steel rings atop a transmission tower, which brought risky live wires crashing down.