Please ensure Javascript is enabled for purposes of website accessibility
PG&E Files for Bankruptcy Amid Wildfire Lawsuits
gvw_ap_news
By Associated Press
Published 6 years ago on
January 29, 2019

Share

SAN FRANCISCO — Pacific Gas & Electric Corp., the nation’s biggest utility, filed for bankruptcy reorganization Tuesday in a bid to relieve itself of some of the billions of dollars in damages it could face as a result of California’s devastating wildfires.

PG&E cited hundreds of lawsuits from victims of fires in 2017 and 2018 when it announced this month that it planned to file for bankruptcy.
The Chapter 11 filing allows PG&E to continue operating while it puts its finances in order. But the move could ultimately drive up electricity rates for customers, jeopardize California’s ambitious transition toward renewable energy and lead to smaller payouts for fire victims.
It was also seen as a possible glimpse of the financial toll that could lie ahead as climate change takes hold. Scientists say global warming is leading to fiercer, more destructive wildfires and longer fire seasons.
PG&E cited hundreds of lawsuits from victims of fires in 2017 and 2018 when it announced this month that it planned to file for bankruptcy.
The blazes include the nation’s deadliest wildfire in a century — the one in November that killed at least 86 people and destroyed 15,000 homes in Paradise and surrounding communities. The cause is under investigation, but suspicion fell on PG&E after it reported power line problems nearby around the time the fire broke out.
Last week, however, state investigators determined that the company’s equipment was not to blame for a 2017 fire that killed 22 people in Northern California wine country.
The bankruptcy filing immediately puts a halt to the wildfire lawsuits and consolidates them in bankruptcy court, where legal experts say victims will probably receive less money.

Bankruptcy Likely to Take Years to Resolve

The victims have little chance of getting punitive damages or taking their claims to a jury in a bankruptcy proceeding. Instead, they will have to compete with PG&E’s creditors, including bondholders, for a payout from the company.

Legal experts say the bankruptcy will probably take years to resolve and result in higher rates for PG&E customers. The company provides natural gas and electricity to 16 million people in Northern and central California.
Consumer activist Erin Brockovich, who took on PG&E in the 1990s, had urged California lawmakers not to let the utility go into bankruptcy because it could mean less money for wildfire victims.
PG&E faced additional pressure not to move forward with the bankruptcy after investigators said a private electrical system, not utility equipment, caused the 2017 wine country blaze that destroyed more than 5,600 buildings in Sonoma and Napa counties. Gov. Gavin Newsom’s office estimated that more than half of the roughly $30 billion in potential damages that PG&E said it was facing was from that fire.
Legal experts say the bankruptcy will probably take years to resolve and result in higher rates for PG&E customers. The company provides natural gas and electricity to 16 million people in Northern and central California.
A bankruptcy filing would not affect electricity or natural gas service but allow for an “orderly, fair and expeditious resolution” of potential liabilities from the wildfires, the company has said on its website.
PG&E would not speculate on any changes to customers’ bills, noting that the California Public Utilities Commission sets electric and gas rates.
PG&E also filed for bankruptcy in 2001 during an electricity crisis marked by rolling blackouts and the manipulation of the energy market. It emerged from bankruptcy three years later but obtained billions in higher payments from ratepayers.

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Townsizing? Land Snorkeling? A User’s Guide to the Latest Travel Lingo

DON'T MISS

Trump Trade War Has Already Had Huge Effect on California Ports

DON'T MISS

Cambodian American Chefs Are Finding Success and Raising Their Culture’s Profile. On Their Terms

DON'T MISS

Ancient DNA Reveals a New Group of People Who Lived Near Land Bridge Between the Americas

DON'T MISS

FDA Approves Moderna’s New Lower-Dose COVID-19 Vaccine

DON'T MISS

Cabrera, Three Relievers Combine to Lead Marlins to Win Over Giants

DON'T MISS

Spike in Steel Tariffs Could Imperil Trump Promise of Lower Grocery Prices

DON'T MISS

Dodgers’ Mookie Betts Out With Broken Toe After Late-Night Bedroom Mishap

DON'T MISS

California Gubernatorial Candidate Steve Hilton Vows to Repeal Transgender Athlete Law

DON'T MISS

Trans Athlete Competes in California Championships in Clovis Despite National Controversy

UP NEXT

How Gentrification Is Killing the Bus: California’s Rising Rents Are Pushing Out Commuters

UP NEXT

Loretta Swit, Emmy-winner Who Played Houlihan on Pioneering TV Series ‘M.A.S.H.,’ Has Died at 87

UP NEXT

Medicaid Work Rules Could Leave a Million Californians With No Health Insurance

UP NEXT

California Lawmaker Won’t Be Charged After Citation for Suspicion of Impaired Driving

UP NEXT

1 in 4 US Children Have Parents With Substance Use Disorder, Study Finds

UP NEXT

Dozens Sickened in Expanding Salmonella Outbreak Linked to Recalled Cucumbers

UP NEXT

Newsom Tussles With Local Officials Over Homelessness

UP NEXT

How Trump’s Vow to Revoke Chinese Student Visas Could Hurt California

UP NEXT

Speaker Johnson Raises Campaign Money in Fresno

UP NEXT

A Program Paying CA Jurors $100 a Day Would End Due to Newsom’s Budget Cuts

Ancient DNA Reveals a New Group of People Who Lived Near Land Bridge Between the Americas

21 hours ago

FDA Approves Moderna’s New Lower-Dose COVID-19 Vaccine

1 day ago

Cabrera, Three Relievers Combine to Lead Marlins to Win Over Giants

1 day ago

Spike in Steel Tariffs Could Imperil Trump Promise of Lower Grocery Prices

1 day ago

Dodgers’ Mookie Betts Out With Broken Toe After Late-Night Bedroom Mishap

1 day ago

California Gubernatorial Candidate Steve Hilton Vows to Repeal Transgender Athlete Law

2 days ago

Trans Athlete Competes in California Championships in Clovis Despite National Controversy

2 days ago

Tim Walz Urges Democrats to Fight Back Harder Against ‘Bully’ Trump

2 days ago

US Defense Secretary Warns Indo-Pacific Allies of ‘Imminent’ Threat From China

2 days ago

Hamas Responds to the US Ceasefire Proposal for Gaza While Seeking Amendments

2 days ago

Townsizing? Land Snorkeling? A User’s Guide to the Latest Travel Lingo

For your next trip, have you considered townsizing? What about choosing a detour destination? And instead of forest-bathing, maybe it’...

20 hours ago

20 hours ago

Townsizing? Land Snorkeling? A User’s Guide to the Latest Travel Lingo

20 hours ago

Trump Trade War Has Already Had Huge Effect on California Ports

20 hours ago

Cambodian American Chefs Are Finding Success and Raising Their Culture’s Profile. On Their Terms

21 hours ago

Ancient DNA Reveals a New Group of People Who Lived Near Land Bridge Between the Americas

1 day ago

FDA Approves Moderna’s New Lower-Dose COVID-19 Vaccine

1 day ago

Cabrera, Three Relievers Combine to Lead Marlins to Win Over Giants

1 day ago

Spike in Steel Tariffs Could Imperil Trump Promise of Lower Grocery Prices

1 day ago

Dodgers’ Mookie Betts Out With Broken Toe After Late-Night Bedroom Mishap

Help continue the work that gets you the news that matters most.

Search

Send this to a friend