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California governor, lawmakers confront utility bankruptcy

California governor, lawmakers confront utility bankruptcy

As Pacific Gas and Electric (PG&E) faces billions of dollars in claims over the California wildfires of 2017 and 2018, the company has announced that they intend to file for bankruptcy.

"While we are making progress as a company in safety and other areas, the board recognizes the tremendous challenges PG&E continues to face", the company said. The company said it expects to have approximately $5.5 billion of committed debtor-in-possession financing when it files for bankruptcy.

PG&E's shares plummeted more than 48 percent during morning trading Monday.

The group said Governor Newsom should appoint a strong pro-consumer president to the Public Utilities Commission as soon as possible to ensure that the response protects ratepayers, taxpayers and fire victims.

"While PG&E announced its intent to file bankruptcy today, the company should continue to honor promises made to energy suppliers and to our community", Newsom stated.

The state's fire agency, Cal Fire, determined in June that PG&E equipment had sparked 17 wildfires across Northern California in 2017.

California utility PG&E Corp. on January 14 gave its workers the state-required 15-day advance notice of its intent to file a Chapter 11 bankruptcy. Electric and natural gas customers will not notice any change in service, the utility said.

Democratic Sen. Jerry Hill, meanwhile, said a PG&E bankruptcy may turn out to be a good thing.

As a regulated utility, PG&E has appealed to the California Public Utilities Commission for higher gas and electric rates to recover costs.

"You avoid a situation where some jury in California thinks PG&E is responsible for this fire, so we should hit them up for all these damages and let them sort out how they pay for it", Wynne said.

PG&E's decision to replace its chief executive is likely meant to satisfy state regulators rather than investors, said Paul Patterson, an analyst who follows PG&E at Glenrock Associates LLC.

California law says utility companies can be held liable for fire damage caused by their equipment, even if they weren't negligent in maintenance. "We don't want to see the victims victimized again".

Patterson is the vice chair of the Assembly's Utilities and Energy Committee. Last year, the state approved a law helping utilities recoup costs from fires in 2017, but not blazes in 2018.

"This company has been dishonest, it has prioritized profits way over safety and there has been no effort on their part to change that", he said.

US officials are investigating whether equipment from the power company sparked the November wildfire in northern California that led to the deaths of 86 people - the deadliest and most destructive blaze in California history.

It is believed the fire was started when a PG&E power line came in contact with nearby trees.

"All Californians sympathize deeply with the victims of our recent catastrophes, which caused dozens of deaths and wreaked unprecedented destruction across the state", said Ralph Cavanagh, California-based energy expert at the Natural Resources Defense Council.

The bankruptcy filing will not make the lawsuits disappear, but it will result in all of the wildfire claims being consolidated into a single proceeding before a bankruptcy judge, not a jury. "PG&E is the state's largest investor in energy efficiency and electric vehicle infrastructure, alone, with annual commitments well in excess of $1 billion", he said.

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