PG&E, utility tied to deadly California wildfires, will file for bankruptcy

Roman Schwartz
January 14, 2019

Pacific Gas and Electric said last month it determined weather conditions were no longer risky enough to warrant a massive power shut off on November 8 - a decision that came as a massive fire was tearing through a Northern California town.

Pacific Gas & Electric announced Sunday evening that CEO Geisha Williams will step down amid the fallout from a spate of deadly wildfires that may have brought the California utility to the brink of bankruptcy.

PG&E said Monday that Williams will receive severance.

"PG&E expects that the Chapter 11 process will, among other things, support the orderly, fair and expeditious resolution of its potential liabilities resulting from the 2017 and 2018 Northern California wildfires, and will assure the company has access to the capital and resources it needs to continue to provide safe service to customers", the company said.

The Company does not expect any impact to electric or natural gas service for its customers as a result of the Chapter 11 process. "We believe John is the right interim leader for the company while we work to identify a new CEO".

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John Simon, who served as PG&E's executive vice president and general counsel, will now be the utility's interim CEO until the board finds a permanent replacement and said the utility's "single most important responsibility" is safety. Shares were trading at almost $50 before the company disclosed that a faulty transmission tower may have caused the Camp Fire.

The company's deepening financial crisis has forced California regulators and policy makers to consider a bailout package and PG&E. "I value the opportunity I've had to lead PG&E and wish all of my colleagues well". The company said it would look to hire a new chief executive with "extensive operational and safety expertise".

Williams knew the risks that she faced because of wildfires liabilities. She said the wildfires were a symptom of climate change with hotter and drier conditions sparking more frequent and intense blazes. In 11 of those fires, state investigators found the company violated codes regarding brush clearance near its power lines or had made related violations.

While state lawmakers rejected PG&E's request to change wildfire liability law, they did pass legislation in August that will help PG&E pay for lawsuits arising from the wine country fires.

Firefighter Jose Corona sprays water as flames from the Camp Fire consume a home in Magalia, Calif., Nov. 9, 2018.

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