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Page 8 The Skanner Portland & Seattle January 30, 2019 News Utility Bankruptcy Could Be Costly to Wildfire Victims PG&E filed for bankruptcy protection Tuesday, which could lead to higher power bills and reduce fire victim payouts By Sudhin Thanawala and Cathy Bussewitz Associated Press SAN FRANCISCO — Faced with potentially ruinous lawsuits over California’s recent wildfires, Pacific Gas & Electric Corp. filed for bankruptcy protection Tuesday in a move that could lead to higher bills for customers of the na- tion’s biggest utility and reduce the size of any payouts fire victims re- ceive. The Chapter 11 filing allows PG&E to continue operating while it puts its books in order. But it was seen as a possible glimpse of the financial toll that could lie ahead because of global warm- ing, which scientists say is leading to fiercer, more destructive blazes and longer fire seasons. The bankruptcy could also jeopardize Califor- nia’s ambitious program to switch entirely to re- newable energy sources. PG&E cited hundreds of lawsuits from victims of fires in 2017 and 2018 and tens of billions of dollars in potential liabil- ities when it announced earlier this month that it planned to file for bank- ruptcy. “ termined that the com- pany’s equipment was not to blame for a 2017 fire that killed 22 people in Northern California wine country. The bankruptcy filing immediately puts the wildfire lawsuits on hold My administration will continue working to en- sure that Californians have access to safe, reliable and affordable service The blazes include the nation’s deadliest wild- fire in a century — the one in November that killed at least 86 people and destroyed 15,000 homes in Paradise and surrounding communi- ties. The cause is under investigation, but suspi- cion fell on PG&E after it reported power line problems nearby around the time the fire broke out. Last week, however, state investigators de- and consolidates them in bankruptcy court, where legal experts say victims will probably receive less money. In a bankruptcy pro- ceeding, the victims have little chance of getting punitive damages or taking their claims to a jury. They will also have to stand in line behind PG&E’s secured credi- tors, such as banks, when a judge decides who gets paid and how much. “My administration the original Social Media NEWS will continue working to ensure that Califor- nians have access to safe, reliable and affordable service, that victims and employees are treated fairly,” Gov. Gavin New- som said in a statement. Legal experts say the bankruptcy will proba- bly take years to resolve and result in higher rates for customers of PG&E, which provides natural gas and electricity to 16 million people in North- ern and central Califor- nia. PG&E would not spec- ulate about the effect on customers’ bills, noting that the state Public Util- ities Commission sets rates. It said the bank- ruptcy filing would not affect electricity or gas service and would allow for an “orderly, fair and expeditious resolution” of wildfire claims. PG&E also filed for bankruptcy in 2001 during an electricity crisis marked by rolling blackouts and the ma- nipulation of the energy market. It emerged from bankruptcy three years later but obtained bil- lions in higher payments from ratepayers. California has set a goal of getting 100 percent of its electricity from car- bon-free sources such as wind, solar and hy- dropower by 2045. To achieve that, utilities must switch to buying power from renewable sources. PG&E made agree- ments in 2017 to buy elec- tricity from solar farms. But because of its bank- ruptcy, some experts have questioned its abil- ity to pay what it agreed to, or to make the invest- ments in grid upgrades and batteries necessary to bring more renewable energy online. “PG&E’s bankruptcy is going to make it a lot more costly for Califor- nia to meet its environ- mental goals,” said Tra- vis Miller, an investment strategist at Morning- star Inc. Consumer activist Erin Brockovich, who took on PG&E in the 1990s, had urged California lawmakers not to let the utility go into bankrupt- cy because it could mean less money for wildfire victims. PG&E faced addition- al pressure not to seek bankruptcy after investi- gators said a private elec- trical system, not utility equipment, caused the 2017 wine country blaze that destroyed more than 5,600 buildings. New- som’s office estimated that more than half of the roughly $30 billion in po- tential wildfire damages that PG&E said it was fac- ing was from that fire. While the investiga- tors’ finding reduced PG&E’s potential liabil- ity, it wasn’t enough to reassure investors. Its stock is down 70 percent from about a year ago. Bussewitz contributed from New York.
