Pacific Gas & Electric Company (PG&E), one of the largest utilities serving Northern California and the surrounding region, announced Monday that it will file for Chapter 11 bankruptcy.
"We'd like to see it avoided but we're not naive", he said.
The San Francisco-based company said its decision to reorganise under Chapter 11 is tied to more than Dollars 30 billion in claims it is facing over the so-called 2018 Camp Fire in Northern California - the deadliest in the state's recent history - that left 86 people dead.
PG&E is facing liabilities that reach $30 billion in damages from the Camp Fire.
Even as the utility heads toward reorganization under bankruptcy, officials said in a press release Monday the company "does not expect any impact to electric or natural gas service for its customers" and that "employees will continue to receive their pay and health care benefits as usual".
Gov. Gavin Newsom spent the day in meetings with key lawmakers to talk about the impact of PG&E's announcement.
Get breaking news alerts and special reports. "This is 2019. We have an abundance of energy, and our customers should not be concerned about turning on their lights".
It's possible that current shareholders could end up owning something after a reorganization, but often shareholders are completely wiped out. Wall Street last week slashed PG&E's credit rating to junk status. State laws aren't given as much weight.
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A shortwave infrared (SWIR) satelite image of the Camp Fire in Magalia, Paradise, California, November 9, 2018.
"I think there's less chance, less thought of a bailout this year than we saw last year, certainly", said Hill, who has the names of the nine people killed in the San Bruno blast framed in his office. The announcement comes after the company has claimed liability for the 2017 and 2018 Northern California wildfires.
Sometimes running a business which is sinking might seem adventurous for some entrepreneurs but it's a tough task to run a company which is in massive debt and right now that's what is happening with PG&E.
PG&E, which ranks as the largest US power utility by number of customers, supplies electricity to 40 percent of Californians.
"You can only imagine that kind of effort will only be back-burnered, or may be eliminated entirely", Brown said.
One of the largest public utilities in the United States is planning to file for bankruptcy protection after being hit by soaring liabilities from years of deadly California wildfires.
Such legislation would also let utilities shift some future fire-related costs to consumers so long as regulators find no negligence on the companies' part. "Today, the problem isn't so much cash flow; the problem is it has huge potential liabilities".
Democratic Sen. Jerry Hill, meanwhile, said a PG&E bankruptcy may turn out to be a good thing. "If there's no agreement, it gets tried by bankruptcy court and then a judge will decide".
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Cavanagh said that another casualty of bankruptcy could be billions of dollars of funding for clean energy initiatives created to fight the effects of climate change.
During this time, those who have filed lawsuits against PG&E will have to wait.
But state lawmakers have given mixed signals about what they might do about liability stemming from the deadly Camp Fire of November 2018 that incinerated most of Paradise.
"The company today provided the 15-day advance notice required by recently enacted California law that it and its wholly owned subsidiary Pacific Gas and Electric Company now intend to file petitions to reorganize under Chapter 11 of the US Bankruptcy Code on or about January 29", a statement said. But they're not yet sure how - or if - they can act to ensure that outcome.
"The chances of victims getting what they would've gotten without a bankruptcy are not good", said state Sen.
"We're not sure what our tools are, what we're capable of", Rendon says.
Correction: A previous version of this story misidentified Sacramento Attorney Dale Ginter. Tell us in the form below.
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