CALIFORNIA – Pacific Gas & Electric, California’s largest utility provider announced today it will file for bankruptcy protection. It currently faces tens of billions of dollars in potential damages from the deadly and destructive wildfires in 2017 and 2018.
As of Friday, PG&E said it was facing roughly 50 lawsuits stemming from the deadliest wildfire in recent U.S. history that destroyed the town of Paradise, leaving at least 86 people dead and 15,000 homes destroyed last November. It is facing another 700 or so lawsuits stemming from wildfires in Northern California in 2017.
The cause of the Paradise fire remains under investigation, but investigators are looking into the possibility it was sparked by a PG&E power line that malfunctioned.
PG&E said Monday that it’s given the required 15-day advance notice that it plans to file for Ch. 11 bankruptcy protection.
If the company goes forth with filing, expected by the end of this month, it will be the biggest bankruptcy by a utility in U.S. history, legal experts say.
The announcement follows the resignation of the power company’s chief executive Geisha Williams saying that John Simon will serve as interim chief executive.
A utilities expert says filing for bankruptcy will help PG&E take on the overwhelming number of lawsuits it’s facing and would raise bills for current utility customers. The company can consolidate all the lawsuits in front of a single, bankruptcy judge in order to avoid jury trails that could result in damages PG&E cannot afford.
As for the pending lawsuits, Frank Pitre, an attorney for hundreds of wildfire victims, said they will be on hold and in limbo. He also said PG&E should have contacted the victims and insurance carriers prior to announcing its plans to file for bankruptcy.
California Gov. Gavin Newsom says he’ll work to ensure people have access to safe and affordable power and victims of the devasting fires are treated fairly.
PG&E’s stock value dropped more than half after the announcement was made.
The company claims it will be able to gain access to capital and resources needed to continue providing service to customers.
(The Associated Press contributed to this report)