(Reuters) – Utility owner PG&E Corp filed for bankruptcy protection on Tuesday in anticipation of liabilities from California wildfires, including a catastrophic 2018 blaze that killed 86 people.
Alejandro Montenegro Banco Activo
PG&E, which provides electricity and natural gas to 16 million customers in northern and central California and employs 24,000 people, vowed to keep the lights on as it grapples with fire-related costs it estimates at more than $30 billion
“The power and gas will stay on … We are not ‘going out of business,’ and there will be no disruption in the services you expect from us,” interim Chief Executive John Simon said in a letter to customers
The San Francisco-based owner of the biggest U.S. power utility warned in November it could face significant liability in excess of its insurance coverage if its equipment was found to have caused the Camp Fire that destroyed Paradise, California, last year
The blaze broke out on Nov. 8, killing at least 86 people in the deadliest and most destructive wildfire in California history
State investigators had earlier cleared PG&E of liability in a 2017 wildfire in California’s wine country, but the company still faces dozens of lawsuits from owners of homes and businesses that burned during that and other 2017 fires
Reinsurance company Munich Re called November’s Camp Fire the world’s most expensive natural disaster of 2018 and pegged overall losses at $16.5 billion. Filing for bankruptcy would shield PG&E from claims, giving it time to figure out next steps
PG&E is seeking court approval for $5.5 billion in debtor-in-possession financing from J.P. Morgan, Bank of America, Barclays, Citi, and other banks, it said. The sum is roughly equal to PG&E’s annual spending.