California Utility Tied To Devastating Wildfires To File For Bankruptcy

California Utility Tied To Devastating Wildfires To File For Bankruptcy

Shares of the company dropped almost 50 percent in early trading Monday, one day after the company said Chief Executive Geisha Williams was stepping down.

Support for PG&E's management eroded even further in December when state regulators accused the utility of falsifying records related to locating and marking underground gas lines from 2012 through 2017 _ years in which the company was trying to convince the public that it had cleaned up its act after a 2010 pipeline blast that killed eight in San Bruno, California.

PG&E's liabilities from that fire could be catastrophic if authorities determine its equipment caused the blazes.

In October 2017, a series of wind-driven wildfires, aptly named the Northern California "firestorm", ripped through several counties. At least two small gas suppliers have restricted sales to PG&E out of concern that the company won't be able to pay, people with direct knowledge of the situation said last week.

Simon said that a court-supervised bankruptcy "will best enable PG&E to resolve its potential liabilities in an orderly, fair and expeditious fashion". He added that the bankruptcy "will enable PG&E to access the capital and resources we need to continue providing our customers with safe service".

On Sunday, PG&E provided a 15-day advance notice for filing for Chapter 11 bankruptcy.

PG&E stated that they do "not expect any impact to electric or natural gas service for its customers as a result of the Chapter 11 process".

California's wildfires in 2017 and 2018 will likely cost tens of billions of dollars.

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Reports say the company could face costs of up to $30bn (£23bn). These include the 2017 Tubbs Fire, which killed 22 people, and last year's Camp Fire, which killed at least 86 people and caused an estimated $7.5 billion to $10 billion in damages. Shares of PG&E were already down 63% since the start of the Camp Fire. Cal Fire says the Camp Fire began November 8 at 6:33 a.m. local time on Pulga Road in Butte County - and PG&E sent an official notice to the California Public Utilities Commission describing an outage on one of its transmission lines at Pulga Road at 6:15 a.m.

Its shares plunged 55 percent on Monday to $8.92, giving it a market capitalization of less than $5 billion. The company has lost more than two-thirds of its market value vanish since the Camp Fire, Bloomberg reports, and in November, Moody's downgraded its credit rating almost to junk status.

PG&E spent millions in an 11th-hour lobbying effort at the end of the California legislative session in August in a failed attempt to change the law to reduce its financial liability in wildfires. "It's creating really significant financial risk to the utilities which will limit our ability to continue making the investments we need going forward".

The daughter of Cuban political refugees, Williams became the nation's first Latina CEO of a Fortune 500 company when she took over PG&E.

As of this afternoon, PG&E stock was down almost 50 percent.

"PG&E provides gas and electric service to 16 million Californians", he said in the statement.

A federal judge last week proposed restricting PG&E from using power lines deemed unsafe during high winds in this year's fire season.