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

Irving Hamilton
January 7, 2019

National Public Radio, citing an anonymous company official and a former employee, reported that PG&E is exploring selling off its natural gas division - a major part of the company - to set up a fund for potential wildfire claims.

A bankruptcy filing is not certain, the sources said. California lawmakers have passed a law that would protect the company from the 2017 fire and fires in 2019 and after but not the 2018 fire. But that is just a possibility, they said, so bankruptcy preparations are being made.

The company is considering whether to file for bankruptcy protection as soon as February, people familiar with the situation said Friday.

PG&E Corp. stock fell 25% in after-hours trading Friday after a report that the company was eyeing bankruptcy filings for some or all of its businesses.

The California utility faces billions of dollars of liabilities as a results of wildfires over the past two years. Safety is and will continue to be our top priority as we work to determine the best path forward for all of our stakeholders.

"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". But the insurance companies note in their lawsuits that flames ignited near the site of a transmission-line irregularity reported by the utility.

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NPR first reported on the exploration of the gas unit sale earlier on Friday.

State fire investigators blamed the utility's power lines for causing several wildfires in October 2017.

The Camp Fire broke out on the morning of November 8 near the mountain community of Paradise, sweeping through the town and killing at least 86 people, in the deadliest and most destructive wildfire in state history.

"We are aware of lawsuits regarding the Camp Fire", Lynsey Paulo, a PG&E spokeswoman, said in a statement. California policymakers had approved a bill that let utilities pass on to customers some costs related to wildfires, according to Moody's.

The company said on Friday that it was reviewing its "structural options" and assessing its operations, finances, management, structure and governance.

PG&E, one of the nation's largest electric utilities with more than 5 million customers in Northern and Central California, is facing legal and regulatory challenges on a number of fronts, including the potential for criminal charges.

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