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.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up