How Will PG&E Bankruptcy Affect Sacramento Consumers?

How Will PG& E Bankruptcy Affect Sacramento Consumers?

Sacramento, CA: Investigators are massing. Lawsuits are mounting. The death toll in Butte County's historic Camp Fire is tragic.



Another year, another megafire, another calamity in which faulty Pacific Gas and Electric equipment is a prime suspect. And once again, Californians face a familiar question: What's going to happen to the behemoth power company in the thick of the fire zone?

Be glad that your situation, with the help of a financial situation with the help of a Sacramento Bankruptcy Attorney, is more manageable.

It's a concern not just for PG&E—one of the largest utilities in the nation—but also for utilities and their customers throughout California. State laws make power companies especially liable for fires sparked by and around their equipment, and California's fire season is year-round now, thanks to global warming.

In recent weeks, Southern California ratepayers sued Southern California Edison for damage from the Woolsey Fire in Ventura County. And earlier this year, the Legislature passed a special wildfire bill to help PG&E spread the costs of its potential liability in 17 Northern California wildfires last year.

Now comes the Camp Fire, which sent PG&E stock whipsawing this month after evidence of an equipment malfunction near the fire's point of origin sparked fears the company's liability won't be covered by its insurance. Investors were so panicky that Public Utilities Commission President Michael Picker had to step in, pointedly announcing that PG&E's financial stability was crucial to making the utilities' equipment safer. Pasadena Democratic Assemblyman Chris Holden even raised the possibility that the Legislature will intervene a second time to help California utilities cope with wildfire expenses.

But the century-old PG&E—which employs 20,000 workers and is slated to play an integral role in California's clean energy future—also has a checkered history and little goodwill to spare with the public. The PUC has launched an investigation into the utility's safety record and corporate structure, as Bay Area residents shouted, protested and urged commissioners not to give them a bailout.

What if Sacramento lacks the political appetite to bail out the soulless corporation in "Erin Brockovich" and the negligent villain that was found guilty in the 2010 San Bruno pipeline explosion?

Let's look at what could happen if PG&E, which provides natural gas and electricity to 16 million people in northern and central California, seeks debt restructuring in the aftermath of the deadliest blaze in state history.

Protecting Sacramento Consumers or PG&E Shareholders

SACRAMENTO (AP) — Two Pacific Gas & Electric customers want the federal judge overseeing the company’s bankruptcy to strike down a new California law that Gov. Gavin Newsom has championed as a way of shoring up the state’s major electric utilities in the face of disastrous wildfires.

A lawsuit filed Friday argues that the law violates the rights of utility customers and taxpayers by making it easier to raise electric rates to cover the costs of wildfires caused by power company equipment.

Rushed through the Legislature in the last week before summer recess, Assembly Bill 1054 will allow electric utilities meeting new safety standards to pass on the costs of wildfires to customers by raising rates unless customers create “serious doubt” that a power company acted reasonably. Currently, a power company must prove to regulators that it acted prudently — a higher standard.

“They have found a way to finance how to pay for the fires, not how to stop the fires,” said attorney Michael Aguirre, who filed the lawsuit Friday with the federal district court in San Francisco.

Aguirre also argued plans to use money from a fee on utility bills to create a fund that will cover utilities’ costs from wildfires in some circumstances amounts to an unlawful gift of public money from the state government to power companies owned by private investors.

Passing the Buck to Make Consumer's Responsible?

California’s largest power company faces an existential crisis as it confronts the looming possibility of tens of billions of dollars in wildfire liability.

Shares of PG&E Corp. — which owns Pacific Gas & Electric Co. — sank 22.3% to $18.95 on Monday after reports that the utility could face at least $30 billion in liability related to fires and has considered filing for bankruptcy protection or unloading its natural gas operations

California’s largest power company faces an existential crisis as it confronts the looming possibility of tens of billions of dollars in wildfire liability.

Shares of PG&E Corp. — which owns Pacific Gas & Electric Co. — sank 22.3% to $18.95 on Monday after reports that the utility could face at least $30 billion in liability related to fires and has considered filing for bankruptcy protection or unloading its natural gas operations.

The consequences of bankruptcy or an asset sale could ripple far beyond the utility’s shareholders, some experts say, affecting 16 million Californians who depend on PG&E for energy and potentially threatening the state’s ability to meet its climate-change goals.

The utility has faced tremendous scrutiny over the last decade, starting with a 2010 gas explosion that killed eight people in San Bruno and continuing with among the deadliest and most destructive fires in state history, some of which may have been sparked by PG&E’s infrastructure. The California Public Utilities Commission is considering breaking up the company as part of an investigation into PG&E’s safety culture.

Some PG&E critics have called for a government takeover or for the massive company to be replaced by smaller, municipal utilities. But it’s far from clear that local governments across Northern and Central California have the ability or the desire to take control of PG&E’s infrastructure, and to assume the huge liabilities that running the power grid entails. And state officials aren’t likely to support a takeover because then the utility’s problems would become Sacramento’s problems instead.