US wildfires force PG&E bankruptcy preparations
US power utility firm Pacific Gas & Electric (PG&E) is preparing to file for Chapter 11 bankruptcy due to the potential liabilities it faces from the 2017 and 2018 Northern California wildfires.
PG&E faces widespread litigation, government investigations and liabilities that could potentially reach $30 billion, accounting for damage from fires last year and in 2017, according to a January 14 Reuters report.
Earlier in January US insurers Allstate, State Farm and USAA launched lawsuits that could be worth billions against PG&E alleging it is liable for the Camp Fire, California’s most destructive and costly wildfire to date.
The energy company, which is already being sued by victims of the fires, has acknowledged there were issues at one of its transmission towers near where the fire started but the exact cause of the fire has yet to be determined.
The Camp Fire is expected to result in insured losses of as much as $10 billion. The fire spread across more than 150,000 acres of land, destroying as many as 18,000 buildings, according to the latest update by Cal Fire.
State Farm accuses PG&E in its own lawsuit of “failing to keep the power lines, wires, and any and all associated equipment in a safe condition at all times to prevent fires.”
Richard Kelly, chair of the board of directors of PG&E Corporation, said: "Following a comprehensive review with the assistance of our outside advisors, the PG&E Board and management team have determined that initiating a Chapter 11 reorganization for both the Utility and PG&E Corporation represents the only viable option to address the company’s responsibilities to its stakeholders.
“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."
