SAN FRANCISCO (AP) – The nation's largest aid program said it will file for bankruptcy on Monday, claiming at least $ 30 billion in potential losses in California following catastrophic lawsuits Forest fires are threatening in 2017 and 2018, killing numerous people and destroying thousands of homes.
The relocation of Pacific Gas & Electric Corp. expected by the end of the month. Lawyers
It would allow PG & E to withhold creditors and continue to provide electricity and natural gas without interruption to its 16 million customers in North and Central California, while it would be the largest bankruptcy of a utility company in US history trying to fix his finances.
The submission would not let the lawsuits go away, but cause all Wildfire claims to be summed up in a single process before a bankruptcy judge and not in a jury. This could protect the company from excessive judgments by the jury and save time by pausing the claims.
The reorganization of Chapter 11 is "the only viable option to address the company's responsibilities to its stakeholders," Richard Kelly, chairman of PG & E's Board of Directors, said in a statement.
"The Chapter 11 process allows us to work with these many constituents in a court-supervised forum to fully address our potential liabilities and implement appropriate changes."
Civil servants are investigating whether the utility's equipment has triggered California's deadliest and most destructive wildfire, a November Northern California fire that killed at least 86 people and burned down 15,000 homes.
In addition, state investigators have blamed PG & E power lines for some fire in October 2017. The authorities are also investigating the cause of a fire that destroyed thousands of homes and killed 22 people in Santa Rosa last year.
California law requires utility companies to pay compensation for forest fires if their equipment has caused the fires – even if utilities were not negligent, for example, due to inadequate maintenance.
PG & E, the nation's largest pension fund in terms of income and headquartered in San Francisco, said it had announced the required 15-day notice that it would have to file for bankruptcy.
It will continue to work with regulators and stakeholders to consider how it can ensure energy supply in a safe environment Environment that continues to be challenged by climate change.
The announcement follows the resignation of Chief Executive Officer Geisha Williams a day earlier.
In a filing with the Securities and Exchange Commission on Monday, the company said it was facing the fires in 2017 and 2018 could exceed $ 30 billion, with no punitive damages, fines and penalties.
The largest insolvency petition registered by a utility company was Energy Future Hol Dings Corp., which had liabilities of $ 49.7 billion in 2014 According to an analysis by Kevin Kelly, US dollar had director of publications at S & P Global.
H. Jeffrey Schwartz, the bankruptcy attorney from New York, said PG & E's bankruptcy should prove to be the largest ever, as it had liabilities of approximately $ 50 billion at the end of 2017. This does not apply to claims from Waldbr ends of 2018.
He said the utility companies have no other way to overcome the legal claims.
19659019] "The liability is too great, there are too many claims, the total amount is too large and it initially looks inglorious, because PG & E knew about this risk and did not remove the line areas as desired," said Schwartz.
expects shareholders to bear the brunt of the restructuring. The bankruptcy court has no influence on the tariffs paid by consumers and these are determined by state regulators and politicians.
As for the lawsuits, PG & E will negotiate with the plaintiffs and their other creditors. A reorganization plan based on how much the utility can pay, said Hugh Wynne of Sovereign Research, an investment research firm.
"You avoid a situation where a jury in California thinks that PG & E is responsible for this fire. You can get involved in all that damage and think about how to pay for it," said Wynne.
Bankruptcy would also allow PG & E to raise money through the sale of assets – such as the gas business and hydroelectric power plants.  PG & E lobbied at the end of the California Legislative Session in the eleventh hour August to try to change the law to reduce liability for forest fires, Barricades overturned the company's headquarters in downtown San Francisco with the announcement of Chapter 11.
Before last year's devastating fire in Northern California Butte County's PG & E share price was $ 47.80, but in early Monday, trading fell $ 8.48 to $ 9.11, the lowest of all Stan d for more than 16 years. Wall Street this past week has reduced the credit rating of PG & E to junk status.
PG & E also applied for Chapter 11 in 2001 when electricity prices rose during California's energy crisis.
California's new Governor Democrat Gavin Newsom said in a statement that he will ensure that customers continue to receive affordable energy and forest fires are treated fairly.
The Natural Resources Defense Council warned that the bankruptcy could result in billions in funding for PG & E's clean energy initiatives, which are critical to California's environmental goals. PG & E is the largest state-owned investor in energy efficiency and electric vehicle infrastructure, said Ralph Cavanagh of the NRDC.
"California needs healthy energy suppliers with access to capital to meet its environmental goals and guidelines, which is essential," said Travis Miller, a strategist at Morningstar Inc.
This version corrects the name of the Natural Resources Defense Council.
Bussewitz reported from New York.