Reports: PG&E claims wildfire liability could force bankruptcy
- Pacific Gas & Electric (PG&E) has warned state lawmakers that it may need to declare bankruptcy or reorganize, depending on its liability for the wildfires that devastated parts of California in October, 2017, a Sacramento CBS affiliate reports.
- On June 8, Cal Fire, the state's fire management agency, said electric equipment owned by PG&E caused 12 wildfires that killed 18 people and burned hundreds of square miles.
- The utility, in a statement following that finding, said the state needs to address issues of insurance affordability and to reform California's unsustainable policies regarding wildfire liability. PG&E told the U.S. Securities and Exchange Commission that the company "will record a significant liability for losses" stemming from 10 of the fires.
PG&E declared bankruptcy in 2001 amidst the 2000-2001 California electricity crisis and recently warned state lawmakers it may need to do so again.
According to state Sen. Jerry Hill, D, who represents San Francisco, "they keep talking about the sky is falling, that they’re going to go bankrupt and what are we going to do, and they're creating a lot of fear in the Capitol."
Cal Fire says the utility violated state law governing vegetation management in eight of the wildfires, including blazes that killed 9 people. The utility was also found at fault for four wildfires in a separate investigation released last month.
PG&E responded to a request for comment by directing the query to its previous statements and filings.
"The loss of life, homes and businesses in these extraordinary wildfires is simply heartbreaking, and we remain focused on helping communities recover and rebuild," the utility said in a statement. "We look forward to the opportunity to carefully review the Cal Fire reports to understand the agency's perspectives. Based on the information we have so far, we continue to believe our overall programs met our state's high standards."
PG&E also faults state policies for putting its finances at risk.
"California is one of the only states in the country where the courts have applied inverse condemnation liability to events associated with investor-owned utility equipment," the utility said. "This means PG&E could be liable for property damages and attorneys’ fees even if we followed established inspection and safety rules."
In an 8-K filed with the SEC, PG&E said that based on current state law it expects to "record a significant liability for losses" associated with 10 fires. In another two, the Atlas and Highway 37 fires, the company said it does "not believe a loss is probable at this time."
PG&E emerged from bankruptcy almost 15 years ago, following the California energy crisis.
- CBS13 Sacramento Lawmakers Say PG&E Talking Bankruptcy After October Wildfires
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