California utility giant PG&E files for bankruptcy, citing wildfire exposure

Pacific Gas & Electric Corp., the largest utility in the U.S. with 16 million customers in California, filed for Chapter 11 bankruptcy protection on Tuesday, citing liabilities from a series of wildfires in the state. PG&E said its operations and services will be unaffected by the reorganization process, which it expects will take about two years.

PG&E estimates that it faces $30 billion in potential damages from 2017 and 2018 wildfires tied to its infrastructure, but about $15 billion of that was from one fire — 2017's deadly Tubbs fire in northern California wine country — and the California Department of Forestry and Fire Protection said last week that a private electrical system, not PG&E equipment, was the cause of that blaze. Cal Fire has not yet released its finding on 2018's Camp Fire, the deadliest in state history, but PG&E's infrastructure is suspected in that fire.

Critics say PG&E's bankruptcy filing is aimed at getting concessions from California lawmakers or regulators and lowering the payout to wildfire victims, who will now have to compete with PG&E's creditors in bankruptcy court. The last time PG&E filed for Chapter 11 reorganization, in 2001 during the Enron-linked energy crisis, it emerged from bankruptcy three years later with investors largely repaid but customers paying higher rates. PG&E customers are expected to pay more for their electricity after this reorganization, too.

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