Pacific Gas & Electric Corp., the nation’s biggest utility, has filed for bankruptcy reorganization in a bid to relieve itself of some of the billions of dollars in damages it could face as a result of California’s devastating wildfires.
Faced with potentially ruinous lawsuits over California’s recent wildfires, Pacific Gas & Electric Corp. filed for bankruptcy protection Tuesday in a move that could lead to higher bills for customers of the nation’s biggest utility and reduce the size of any payouts to fire victims.
The Chapter 11 filing allows PG&E to continue operating while it puts its books in order. But it was seen as a glimpse of the financial toll that could lie ahead for the industry because of climate change, which scientists say is leading to fiercer, more destructive blazes and longer fire seasons.
The bankruptcy could also jeopardize California’s ambitious program to switch entirely to renewable energy sources within a few decades.
PG&E, which supplies natural gas and electricity to 16 million people in Northern and central California, cited hundreds of lawsuits over fires in 2017 and 2018 and tens of billions of dollars in potential liability when it announced earlier this month that it planned to file for bankruptcy.
The blazes include the nation’s deadliest wildfire in a century — the one in November that killed at least 86 people and destroyed 15,000 homes in and around the Northern California town of Paradise. The cause is still under investigation, but suspicion fell on PG&E after it reported power line problems nearby around the time the fire broke out.
Last week, however, state investigators determined that the company’s equipment was not to blame for a 2017 fire that killed 22 people and destroyed more than 5,600 buildings in Northern California wine country. That finding spared PG&E from billions in liability.
PG&E said the bankruptcy will not affect electric or gas service and will allow for an “orderly, fair and expeditious resolution” of wildfire claims.
“Throughout this process, we are fully committed to enhancing our wildfire safety efforts, as well as helping restoration and rebuilding efforts across the communities impacted by the devastating Northern California wildfires,” interim CEO John R. Simon said in a statement.
