SAN FRANCISCO | The nation’s biggest utility said Monday its filing for Chapter 11 bankruptcy to counter at least $30 billion in potential damages from lawsuits over the devastating wildfires in California in 2017 and 2018 that killed scores of people and destroyed thousands of homes.
The move by Pacific Gas & Electric Corp., expected by the end of the month, would be the largest bankruptcy by a utility in U.S. history, legal experts said.
It would allow PG&E to delay paying creditors and continue providing electricity and natural gas without interruption to its 16 million customers in Northern and central California while it works to put its finances in order.
The filing would not make the lawsuits go away, but would result in all wildfire claims being consolidated into a single proceeding before a bankruptcy judge, not a jury. That could protect the company from excessive jury verdicts, and also buy time by putting a hold on the claims.
Chapter 11 reorganization represents “the only viable option to address the company’s responsibilities to its stakeholders,” Richard Kelly, chairman of PG&E’s board of directors, said in a statement.
“The Chapter 11 process allows us to work with these many constituents in one court-supervised forum to comprehensively address our potential liabilities and to implement appropriate changes.”
State officials are looking into whether the utility’s equipment caused the deadliest, most destructive wildfire in California history, a blaze in Northern California in November that killed at least 86 people and burned down 15,000 homes.
Additionally, state investigators have blamed PG&E power lines for various fires in October 2017. Authorities are also looking into the cause of a blaze that destroyed thousands of homes and killed 22 people in Santa Rosa last year.
California law requires utilities to pay damages for wildfires if their equipment caused the blazes — even if the utilities weren’t negligent through, say, inadequate maintenance.
PG&E, which is the nation’s largest utility by revenue and is based in San Francisco, said it is giving the required 15 days’ notice that it plans to file for bankruptcy protection.
It said it will continue working with regulators and stakeholders to consider how it can safely provide energy “in an environment that continues to be challenged by climate change.”
The announcement follows the resignation of chief executive Geisha Williams a day earlier.
