PG&E to File Chapter 11 Petitions
The corporation's CEO, Geisha Williams, resigned on Jan. 13. PG&E faces billions of dollars in potential liabilities related to wildfires in California.
PG&E Corporation announced Jan. 14 that it and its wholly owned subsidiary Pacific Gas and Electric Company currently intend to file petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code on or about Jan. 29, 2019. The corporation's CEO, Geisha Williams, resigned the previous day, the company announced. PG&E faces billions of dollars in potential liabilities related to wildfires in California.
The Jan. 14 announcement said PG&E is "committed to continuing to make investments in system safety as it works with regulators, policymakers and other key stakeholders to consider a range of alternatives to provide for the safe delivery of natural gas and electric service for the long-term in an environment that continues to be challenged by climate change." It continued, "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."
Executive Vice President and General Counsel John Simon has been named interim CEO while the company conducts a search for Williams' successor.
PG&E also reported that it does not expect any impact to electric or natural gas service for its customers as a result of the Chapter 11 process, and its employees will continue to receive their pay and health benefits as usual.
The announcement quotes Simon: "The people affected by the devastating Northern California wildfires are our customers, our neighbors and our friends, and we understand the profound impact the fires have had on our communities and the need for PG&E to continue enhancing our wildfire mitigation efforts. We remain committed to helping them through the recovery and rebuilding process. We believe a court-supervised process under Chapter 11 will best enable PG&E to resolve its potential liabilities in an orderly, fair and expeditious fashion. We expect this process also will enable PG&E to access the capital and resources we need to continue providing our customers with safe service and investing in our systems and infrastructure. Everyone at PG&E knows that our single most important responsibility is safety, and we recognize that we must work even harder every day to demonstrate that the safety of our customers, our communities, our employees and our contractors comes first."
"Following a comprehensive review with the assistance of our outside advisors, the PG&E Board and management team have determined that initiating a Chapter 11 reorganization for both the Utility and PG&E Corporation represents the only viable option to address the Company’s responsibilities to its stakeholders," said Richard C. Kelly, chair of the PG&E Corporation board of directors. "Our goal will be to work collaboratively to fairly balance the interests of our many constituents—including wildfire victims, customers, employees, creditors, shareholders, the financial community and business partners—while creating a sustainable foundation for the delivery of safe service to our customers in the years ahead. The Chapter 11 process allows us to work with these many constituents in one court-supervised forum to comprehensively address our potential liabilities and to implement appropriate changes."
Pacific Gas and Electric Company is based in San Francisco and is one of the largest combined natural gas and electric energy companies in the United States. The company provides natural gas and electric service to approximately 16 million people throughout a 70,000-square-mile service area in northern and central California.