PG&E Reportedly Eyeing Breakup, Bankruptcy In Wake Of Multiple Devastating Wildfires

Andrew Cummings
January 8, 2019

The company was considering the move, for some or all of its businesses, as it fears a massive charge in the fourth quarter related to potential liabilities from wildfires.

A bankruptcy filing reportedly is not PG&E's preference for addressing the liabilities, but the preparations could put pressure on California politicians hoping the company can avoid such an outcome. Because of potential legislative aid, PG&E has not yet determined whether it will make a bankruptcy filing, Reuters reported.

Shares of PG&E were down 14 per cent in pre-market trading on the NY stock exchange. The company is weighing using proceeds from the unit's sale to address death and injury claims arising from the recent wildfires, this source said.

Three major insurance companies have filed a Camp Fire lawsuit against PG&E as a result of the billions of dollars in claims they are expecting.

Cal Fire, which is investigating the Camp Fire, has yet to determine the exact cause of the fire.

The Sacramento Bee reports that PG&E is already facing multiple lawsuits from wildfire survivors. But the bill did not cover 2018 fires. In response to a request for a comment from Fortune, PG&E emailed: "T$3 he PG&E Board is reviewing structural options to best position PG&E to implement necessary changes while meeting customer and operational needs". It also said it is searching for new directors at its holding company and its utility subsidiary Pacific Gas and Electric Co. Lawmakers were in talks late past year for legislation to protect the company from liabilities related to the 2018 fires.

The California Public Utilities Commission last month opened proceedings to consider penalties against the company for falsifying pipeline safety records.

S&P Global Ratings on Monday stripped PG&E Corp of its investment-grade credit rating, citing indications of a significant deterioration in the political and regulatory environment for the California power utility.

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