PG&E Stock Tumbles on Bankruptcy Filing

PG&E Stock Tumbles on Bankruptcy Filing

PG&E Corp, the biggest USA power utility, said on Monday it is preparing to file for Chapter 11 bankruptcy for all of its businesses as it faces potentially crushing liabilities linked to catastrophic wildfires in 2017 and 2018.

The company's intent to file voluntary bankruptcy proceedings on or about January 29 came in a one paragraph statement. PG&E's wildfire insurance for the year that began August 1, 2018, covers $1.4 billion.

The cause of the Camp Fire is still under investigation, according to state fire officials.

Shares of PG&E plunged 55% in initial premarket trading following the filing and was still down 40% shortly after 5 a.m. PT. To address future wildfire costs, SB 901 allows the CPUC to apply a so-called "stress test" review, to determine which costs can be passed on to ratepayers, versus those that must be borne by the utility's shareholders, in order to keep the company operating. Her departure follows the exit of three PG&E executives earlier this month - Patrick Hogan, senior vice president of electric operations at PG&E's utility unit; Kevin Dasso, vice president of electric asset management; and Gregg Lemler, vice president of electric transmission.

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.

The California Department of Forestry and Fire Protection, or Cal Fire, has determined that PG&E equipment ignited 17 of the wildfires that tore through Northern California in 2017. My staff and I have been in constant contact throughout the week and over the weekend with these stakeholders and regulators.

Pacific Gas and Electric, facing billions of dollars in claims over the deadly 2018 Camp Fire, is headed to bankruptcy court.

PG&E's bankruptcy filing has been a possibility for months, but its likelihood rose to near-inevitability in the first few weeks of 2019 as S&P and Moody's cut its credit rating to near-junk status and amid continued declines of its battered share price.

The utility set up barricades at its headquarters in San Francisco before additional details were set to be revealed at a news conference.

"The people affected by the devastating Northern California wildfires are our customers, our neighbors and our friends, and we understand the profound impact the fires have had on our communities and the need for PG&E to continue enhancing our wildfire mitigation efforts", interim CEO John Simon said in a statement Monday.

The reorganization will involve investments by PG&E's to make is distribution systems safer as the company looks for alternative ways to provide "safe delivery of natural gas and electric service". We believe John is the right interim leader for the company while we work to identify a new CEO.

"Our search is focused on extensive operational and safety expertise, and the board is committed to further change at PG&E", Kelly said in a statement.

Williams was CEO for less than two years, but she had been with PG&E since 2007.

Williams had been CEO since 2017.

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