CSAC Monitoring PG&E Bankruptcy Impact on Counties
January 31, 2019
CSAC is actively monitoring the complex situation related to Pacific Gas & Electric (PG&E)’s official filing for Chapter 11 Bankruptcy this week. As a key stake holder in a wildfire coalition that includes insurance companies, wildfire victims groups, other local government advocates, and consumer protection attorneys, CSAC’s top priority is ensuring that our communities are safe and that people who are trying to recover from a disaster can be made whole.
The California Public Utilities Commission (CPUC), the Governor and the Legislature are all expected to play a role in this complex bankruptcy proceeding. With Chapter 11 Bankruptcy filing, PG&E now has 120 days to come up with a plan to reorganize in a judicially supervised bankruptcy proceeding.
Included in the bankruptcy filing was a request by PG&E to approve the payment of $130 million in bonuses to PG&E employees, and an attempt to get the bankruptcy court to block a ruling by federal regulators to require the utility to maintain several of their renewable contracts. It remains unclear how exactly wildfire victims will be impacted.
Under Chapter 11 bankruptcy proceedings, victims who have brought lawsuits against PG&E are considered to be unsecured creditors – like local governments, and insurance companies- who rank lower on the list of other types of creditors in the debt reorganization process.
At a recent hearing in the State Capitol, legislators of the Assembly Public Utilities Committee expressed concern over the ability of PG&E to renegotiate renewable contracts and meet state renewable energy goals. CPUC President Michael Picker shared his goal with Legislators to advocate on behalf of both ratepayers and renewable energy generators. He also explained why the CPUC allowed PG&E to seek short term financing to fund operations, citing his organization’s ability to put conditions on the money including requirements to maintain safe operating conditions.
CSAC will continue to monitor this ongoing and complex situation and provide regular updates.