Economy

PG&E Bankruptcy Talk Sets Stage for Showdown With California

PG&E Bankruptcy Talk Sets Stage for Showdown With California

"Breaking it up or the state running the company, those are all incredibly complicated proposals that just have no indication that they would be successful, certainly not anytime soon", he said.

The utility could be faced with billions of dollars of liabilities from fatal blazes in 2018 and 2017.

PG&E Corp, the electricity provider in the northern California region ravaged by a deadly wildfire, said it was searching for new directors at its holding company and its utility subsidiary Pacific Gas and Electric Co.

Shares were down more than 18% early Monday. The filing isn't certain, the people said, but it may be enough to force the hand of state legislators who could come up with a rescue package.

"PG&E's board and management are working diligently to assess the company's potential liabilities as a result of the wildfires and the options for addressing those liabilities. We recognize the need to balance the interests of many stakeholders while maintaining safe, reliable, and affordable services for our customers, which is always our top priority".

PG&E shares have plunged almost 50% since November 8, when the deadliest and most destructive wildfire in California history broke out.

Tim Paine answers journalist's phone at press conference
Paine, however, found the lighter side of it as he not just halted to answer the call, but did it in the most savage way possible. We've just been outplayed. "We had spells that were quite good but that's not going to cut it", he said.

"Rather than waiting for the regulators to tell you what's going to happen - which could take years", he said, "you're in the bankruptcy court where there's a structure".

State Farm and USAA, represent another potentially staggering blow to PG&E, which has already acknowledged that problems occurred on a high-voltage transmission tower near the spot where the fire started November 8. But the bill did not cover 2018 fires.

PG&E added that it has formed a special board committee that includes independent experts to advise on wildfire safety best practices. Lawmakers were in talks late a year ago for legislation to protect the company from liabilities related to the 2018 fires.

The California Department of Forestry and Fire Protection (Cal Fire) has determined PG&E likely broke state law in connection with 12 of the 2017 fires and is investigating if the utility played any part in the recent Camp Fire, the deadliest fire in the state's history, killing 86 people.

The utility has borrowed more than $3 billion under credit lines available to it, a move companies in financial distress will often make to shore up cash.

Earlier last month, the California Public Utilities Commission (CPUC) opened a proceeding to consider penalties against the company, ordering immediate action against the utility for falsifying safety documents for natural gas pipelines. It emerged from bankruptcy in 2004.