Coverage: PG&E plans to file for bankruptcy protection
PG&E Corp. stock cratered Monday after the company said it will file for Chapter 11 bankruptcy protection amid the financial anguish stemming from its part in helping spark a wave of historic wildfires in California.
Thomas Franck of CNBC.com had the news:
Shares of the company plunged 52 percent to $8.38 per share Monday, one day after the company said Chief Executive Geisha Williams was stepping down. The stock has lost more than 80 percent of its value over the last three months. The market value of the company has declined more than $30 billion to about $4.7 billion from a peak over $36 billion in 2017, a loss equivalent to the size of eBay.
The company provided official 15-day advance notice that it and its wholly owned subsidiary, Pacific Gas and Electric, intend to file petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code on or about Jan. 29.
The company, California’s largest investor-owned utility, has 16 million customers across a 70,000-square-mile service area in Northern and Central California. There was some speculation that PG&E was bluffing in order to force aid from California. CNBC’s David Faber said that sources told him that is not the case.
George Avalos of the San Jose Mercury News reported that Williams was receiving $2.5 million in severance:
PG&E’s former chief executive officer was given a $2.5 million cash severance on the way out the door even though she was at the helm of the embattled utility during the disastrous and deadly infernos that roared through Northern California in 2017 and 2018.
“It is outrageous that Geisha Williams is receiving anything,” said Mark Toney, executive director with The Utility Reform Network, a consumer group. “She should be forced to return the money.”
PG&E this week announced the end of Williams tenure as CEO, less than two years after she took on the role in March 2017.
“Severance is in line with PG&E company policy for officers as stated in our SEC filings,” PG&E spokesman Matt Nauman said. “Geisha Williams’ cash severance is approximately $2.5 million.”
John Wildermuth and J.D. Morris of the San Francisco Chronicle reported that state lawmakers were in no rush to help the company:
The Legislature has already helped PG&E handle the fiscal strain of previous wildfires through a measure it passed last year, SB901, which created a process that regulators and the utility must follow before PG&E can pass along costs to customers. PG&E must first use a financial stress test to see how much of the burden it can pay on its own; then the utility can finance the rest through bonds its customers pay off over time.
But the law allows PG&E to issue such bonds only for blazes that ignited in 2017. The Legislature would have to take new action if it wanted to protect the company from Camp Fire costs.
Assemblyman Chris Holden, D-Pasadena, who chairs the Utilities and Energy Committee, had said he was working on legislation to extend the provisions of SB901 to 2018 fires. However, Holden hasn’t filed the bill yet, and he said Monday that he would not do so.
“Our purpose was to keep PG&E from going into bankruptcy, but that’s out the window now,” Holden said. “Now the courts are getting out in front.”