Today, Pacific Gas and Electric announced it intends to file for bankruptcy. The company is required by California law to give its employees 15 days notice so the announcement today means the company can file by the end of the month. The company’s CEO announced she was stepping down yesterday. From CNBC:
Shares of the company dropped nearly 50 percent in early trading Monday, one day after the company said Chief Executive Geisha Williams was stepping down. The stock has lost more than 80 percent of its value over the last three months…
The company, California’s largest investor-owned utility, has 16 million customers across a 70,000-square-mile service area in Northern and Central California. There was some speculation that PG&E was bluffing in order to force aid from California. CNBC’s David Faber said that sources told him that is not the case.
Last week there were reports that PG&E was considering an option dubbed “Project Falcon” which would have sold off the company’s gas assets in an attempt to cover its liabilities. But there were a couple of problems with that plan. For one thing, the gas business has also had serious safety issues which, according to some analysts, means the company was unlikely to get the $10-$15 billion it was looking for in a sale. Second, even if the company could get top dollar for the gas business, it still wouldn’t be nearly enough to cover their expected liability from the Camp Fire combined with still outstanding liability from 17 fires in 2017. From the San Francisco Chronicle:
Analysts estimate that PG&E could face as much as $30 billion in liability because of the 2017 Wine Country fires and the 2018 Camp Fire, which killed 86 people and destroyed the town of Paradise in Butte County. That figure includes civil claims filed by fire survivors and families alleging wrongful death, property damage and personal injury. PG&E’s wildfire insurance for the year that began Aug. 1, 2018, covers $1.4 billion.
The California Department of Forestry and Fire Protection, or Cal Fire, has determined that PG&E equipment ignited 17 of the wildfires that tore through Northern California in 2017. Investigators forwarded 11 of those cases to local district attorney’s offices for possible criminal prosecution
The cause of the worst 2017 wildfire — the Tubbs Fire, which killed 24 people and leveled neighborhoods in and around Santa Rosa — is still under investigation.
Responsibility for the Camp Fire hasn’t been officially placed on PG&E yet, but the company has already admitted it had a short in a high voltage line 15 minutes before the fire started in the same area where it started. It’s just a matter of time until investigators make it official.