California's largest utility, Pacific Gas and Electric, gave a required 15-day notice Monday that it would be filing for Chapter 11 bankruptcy protection by the end of the month. The firm is facing billions of dollars in claims after being blamed for sparking numerous wildfires, including 2018's Camp Fire — the state's deadliest on record.
What are the details?
According to The Wall Street Journal, PG&E is facing more than $30 billion in potential liability costs associated with claims that the company's power lines sparked numerous wildfires in California in the past few years. State investigators found PG&E lines were responsible for igniting 18 wildfires in October 2017, and are still probing whether the utility's equipment caused the devastating Camp Fire last year.
CNN reported that the company currently faces at least $7 billion in claims from the Camp Fire alone.
Moody's Investors Service and S&P Global Ratings both downgraded PG&E's bonds to junk status last week, adding to the firm's troubles, according to The New York Times.
In a news release on Monday, PG&E Corporation said it expects a reorganization will allow the firm to continue supplying natural gas and electric services to its 16 million customers, while providing an "orderly, fair and expeditious resolution of PG&E's potential liabilities resulting from the 2017 and 2018 Northern California wildfires."
PG&E had just announced the day before that its CEO Geisha Williams stepped down from her $7.6 million a year position, after 11 months on the job. She has been replaced by the company's general counsel, John Simon, while the utility searches for a permanent chief with "extensive operational and safety expertise."
This will be the second time PG&E has filed for Chapter 11 bankruptcy. The utility went through a reorganization from 2001 to 2004, which resulted in a settlement that was estimated to cost the average customer anywhere from $1,300 to $1,700, according to the Los Angeles Times.
The previous bankruptcy was caused by PG&E racking up over $12 billion in debt due to price controls implemented by California's restructuring plan amid the state's electricity crisis.