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PG&E Files For Bankruptcy

Company: "The Power and Gas Will Stay On"

KCBS Radio Morning News
January 29, 2019 - 5:46 am
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SAN FRANCISCO (KCBS Radio) -- PG&E filed for bankruptcy early Tuesday, following through on a threat to seek Chapter 11 protection as it faces potential multi-billion dollar wildfire liabilities.

The filing in United States Bankruptcy Court for the Northern District of California cited "actual and potential liabilities" facing Pacific Gas and Electric Co. and its parent company.

In a statement posted on its website, the company said, "We do not expect any impact to natural gas or electric service for our customers as a result of the Chapter 11 process."

PG&E faces thousands of potential lawsuits from wildfire victims. Some of those cases have already been filed, and the Chapter 11 filing effectively freezes the process.

"It has to stop until a bankruptcy judge can determine what is the most efficient way to proceed," said Stanford Law Professor G. Marcus Cole.

As for PG&E's billions of dollars in long-term contracts to buy wind and solar power, Cole believes the company will wind up paying full price. "It appears as though PG&E is solvent", Cole told KCBS Radio, meaning those contracts are unlikely to be discounted during the bankruptcy process. 

Another bankruptcy expert, U-C Hastings College of the Law associate professor Jared Ellias, had a different take regarding the green energy contracts. "The bankruptcy court has the power to wipe those contracts out," said Ellias.

According to Cole, the initial phases of the bankruptcy process will include orders allowing the company to meet its immediate obligations, including payroll.

12,000 PG&E employees are represented by IBEW Local 1245.  The union's business manager Tom Dalzell believes wildfire liability remains a massive issue for the utility industry. "It's the survival not just of this company, but of the industry," Dalzell said in a KCBS Radio interview.

The filing came hours after the California Public Utilities Commission voted unanimously to permit PG&E to access $5.5 billion in debtor-in-possession financing it has arranged with lenders. The CPUC action came as protesters chanted "Shame!" and called for a public takeover of PG&E and other investor-owned utilities.