PG&E Files For Bankruptcy As Company Faces Wildfire Liability

SAN FRANCISCO, CA — Pacific Gas and Electric company has officially filed for bankruptcy early Tuesday morning, according to company officials.

The utility company filed the motion after a raucous California Public Utilities Commission meeting in San Francisco on Monday.

"To be clear, we have heard the calls for change and we are determined to take action throughout this process to build the energy system our customers want and deserve," said interim PG&E CEO John R. Simon in a statement.

Punctuated by protests, the CPUC voted to allow PG&E Co. to borrow up to $10 billion to pay for operations during its Chapter 11 bankruptcy. The Chapter 11 process enables a company to freeze its debts and continue functioning while developing a financial reorganization plan.

>>Also See: PG&E Profits Going Up In Smoke

The filing will enable the company to continue operating while resolving a potential liability of up to $30 billion for Northern California wildfires.

PG&E had asked the CPUC for approval to obtain $6 billion in bank loans during that process. The decision authored by Commission Chairman Michael Picker allows the utility to borrow up to $10 billion without further authorization.

>>Also See: Will PG&E customers pay more in bankruptcy?

Picker told the meeting audience, "Nothing in this decision allows PG&E to increase rates. It merely authorizes PG&E to borrow money to continue operations."

The measure was unanimously approved by the four current commission members at an emergency meeting that was announced Monday morning.

If allowed to keep operating during the Chapter 11 bankruptcy, it would become what is known as a debtor in possession.

>>Also See: What happens if PG&E goes bankrupt?

PG&E said in a statement, "The debtor-in-possession financing provides the funds needed to continue operating our business and to continue investing in our systems, infrastructure and wildfire mitigation initiatives throughout the Chapter 11 process.

"That process also supports the orderly, fair and expeditious resolution of its liabilities resulting from the 2017 and 2018 wildfires," PG&E said.

>>Also See: PG&E Announces Plan To File Bankruptcy

Both PG&E Co. and its parent holding company, PG&E Corp., are expected to file for bankruptcy.

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— Bay City News; Image via Shutterstock