California's largest utility, facing up to $30 billion in potential liability for recent California wildfires, filed for Chapter 11 bankruptcy protection at midnight Tuesday. Pacific Gas and Electric Corp's board of directors approved the plan to file at a meeting Monday evening. PG&E announced its intention to file two weeks ago.

Filing for bankruptcy essentially ensures the company can continue to operate and its customers will get power, but doesn't assure any of the fire victims will get compensation -- or that ratepayers won't get hit with part of the bill, CBS San Francisco and CBS Los Angeles say.

The filing enables PG&E to freeze its debts and continue operations while developing a financial reorganization plan. The company serves 16 million homes and businesses in Northern and central California.

PG&E said it would seek $5.5 billion in loans to get it through the bankruptcy period.

At a noisy meeting punctuated by protests earlier Monday, the California Public Utilities Commission in San Francisco voted to let PG&E borrow up to $10 billion to cover operations over that span, CBS Los Angeles explains.

At that session, activists said the company shouldn't be borrowing more money, CBS San Francisco reports.

PG&E faces criticism for keeping power on during California wildfire warning

State officials are investigating whether the utility's equipment sparked the deadliest, most destructive wildfire in California history, the Camp Fire, which killed at least 86 people and burned down 15,000 homes in Paradise and surrounding Northern California communities in November.

Reinsurance company Munich Re says the Camp Fire was the world's most expensive natural disaster last year, with overall losses of $16.5 billon, according to the Reuters news agency.

Fire investigators also blame the utility's power lines for causing other wildfires in the state last year and in 2017.

California law compels utilities to pay for damages from wildfires if their equipment caused the blazes - even if the utilities weren't negligent through, say, inadequate maintenance.

PG&E "also filed for bankruptcy in April 2001 near the height of an electricity debacle marked by rolling blackouts and the manipulation of the energy market," the Associated Press points out, adding that, "PG&E emerged from bankruptcy three years later but obtained billions of dollars in higher payments from ratepayers."</s>(This Jan 29 story has been corrected in paragraph 10 to remove reference to top creditors, which erroneously included banks that act as trustees on bond indentures with no direct credit exposure)

By Subrat Patnaik

(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.

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.

FILE PHOTO: PG&E; crew work on power lines to repair damage caused by the Camp Fire in Paradise, California, U.S. November 21, 2018. REUTERS/Elijah Nouvelage/File Photo

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.

PG&E; listed assets of $71.39 billion and liabilities of $51.69 billion as of Sept. 30 in the voluntary Chapter 11 document filed in the U.S. Bankruptcy Court for the Northern District of California.

It carries a debt load of more than $18 billion. Company advisers expect that it may take up to two years to emerge from bankruptcy.

PG&E; shares, which lost three-quarters of its value from its 52-week high before the Camp Fire, were up 6 percent at $12.74 in morning trading.

PG&E; subsidiary Pacific Gas and Electric Company filed for bankruptcy in 2001.

HEDGE FUND CHALLENGE

BlueMountain Capital Management LLC said it would propose a slate of board directors by Feb. 21, and urged stakeholders to support change at the company. The hedge fund could potentially be in line to sit on an equity committee that a bankruptcy judge appoints.

Slideshow (2 Images)

PG&E; must also contend with worried suppliers.

Federal energy regulators said on Friday they had joint jurisdiction with a bankruptcy court over requests to cancel or renegotiate power contracts by PG&E.; The was a win for power producers that supply PG&E; with solar and wind power, including NextEra Energy Inc.

Last year, lawmakers gave PG&E; permission to raise rates to cover wildfire losses from 2017. But elected officials have shown little appetite for new rate hikes or other maneuvers to prevent a bankruptcy filing.</s>SACRAMENTO (Reuters) - PG&E Corp, owner of the largest U.S. power utility, filed for bankruptcy protection on Tuesday in anticipation of liabilities in excess of $30 billion from the deadliest and most catastrophic wildfires in California’s history.

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 and continue with the critical investments it said were needed in its system’s safety and maintenance.

“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.

PG&E faced no immediate cash crunch. Its decision to file for bankruptcy was driven by its assessment of upcoming legal liabilities. While state investigators cleared PG&E this month of liability in a 2017 wildfire in California’s wine country, the company is expected to be found liable for a fire that killed at least 86 people in northern California in November.

The San Francisco-based company faces lawsuits from owners of homes and businesses that burned during that and other fires. Filing for bankruptcy temporarily shields PG&E from these claims, allowing it to negotiate settlements in bankruptcy court.

PG&E’s decision to proactively file for bankruptcy, however, attracted criticism from some California politicians, shareholders and wildfire victim advocates. California Senate President Toni Atkins called PG&E’s decision disappointing and said the bankruptcy was not the optimum solution for Californians.

“That was PG&E’s choice but it does not change my focus, which remains protecting the best interests of the people of California,” Gavin Newsom, who took office as governor of California earlier this month, said in a statement.

BlueMountain Capital Management LLC, an investment firm that owns about 2 percent of PG&E, called the company’s decision “reckless” and detrimental to shareholders. It has vowed to launch a proxy contest next month to replace PG&E’s board directors.

PG&E’s shares jumped on Tuesday despite the bankruptcy filing as investors speculated over how much equity holders will be able to recover.

PG&E listed assets of $71.39 billion and liabilities of $51.69 billion as of Sept. 30 in the voluntary Chapter 11 document filed in the U.S. Bankruptcy Court for the Northern District of California, indicating that its equity would likely retain at least some of its value.

PG&E’s shares were trading up 14 percent at $13.69 on afternoon trading, giving the company a market value of $7.1 billion. Still, the stock remains down close to 80 percent since October, before the latest round of wildfires broke. PG&E had said earlier this month it was preparing for bankruptcy.

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.

PG&E also carries a debt load of more than $18 billion. Company advisers expect that it may take two years or more to emerge from bankruptcy.

An arcane California legal rule, known as “inverse condemnation,” exposes California utilities to liabilities from wildfires regardless of their negligence, as long as their equipment is involved.

This has raised concerns among some PG&E investors that exiting bankruptcy could take longer if there were more wildfires, a real threat given that climate change has turned the blazes into an annual occurrence.

Investors in other utilities are fretting, as well, about the potential impact of climate change. Shares of Rosemead, California-based Edison International, for example, are down 20 percent since the November wildfires.

Another issue at stake is PG&E’s contracts for renewable power. These are critical for California, which last year delivered 33 percent of its energy from renewable sources and has a goal to source 60 percent of its power from renewables by 2030. PG&E has more than 250 contracts for renewable power that represent $57 billion in investment, it said last month.

Federal energy regulators said on Friday they had joint jurisdiction with a bankruptcy court over requests to cancel or renegotiate power contracts by PG&E.

Last year, lawmakers gave PG&E permission to raise rates to cover wildfire losses from 2017. But elected officials have shown little appetite for new rate hikes or other maneuvers to prevent a bankruptcy filing.

This is the second bankruptcy for PG&E in as many decades. Its subsidiary Pacific Gas and Electric Company filed for bankruptcy in 2001, at the height of California’s energy crisis. It exited bankruptcy three years later.</s>PG&E Corp. filed for bankruptcy protection on Tuesday as it struggles with billions of dollars in potential liabilities from its role in sparking California wildfires, triggering one of the most complex corporate reorganization cases in years.

California’s largest utility, which provides natural gas and electric service to 16 million people, sought protection under chapter 11 of the bankruptcy code. The process to restructure its debts is expected to be protracted, involving state and federal regulators, with wide-ranging...</s>PG&E officially filed for Chapter 11 bankruptcy Tuesday morning as it faces billions of dollars in potential damages from wildfires in the state.PG&E had warned the decision could come on Tuesday, and the California Public Utilities Commission scrambled ahead of the deadline to ensure the utility would have financing that the company says it would need to continue providing electric and gas service under Chapter 11.The four members of the commission voted unanimously Monday at a raucous, hastily announced meeting to exempt PG&E from a longer approval process for bankruptcy credit and loans.The decision cleared a major obstacle to the company's planned bankruptcy filing- a move that would likely set off a yearslong court battle that could result in legislative changes, higher utility rates and less money for wildfire victims.PG&E announced on Jan. 14 that it planned to file for bankruptcy in the face of at least $30 billion in potential wildfire damages. The company said it faced hundreds of lawsuits from victims of catastrophic wildfires in 2017 and 2018.The fires included the nation's deadliest in a century - a November blaze that killed at least 86 people and destroyed 15,000 homes in Paradise and surrounding communities.The cause of that fire remains under investigation, but speculation has centered on PG&E after the utility reported power line problems nearby around the time it started.State investigators last week cleared the company's equipment of any fault in a 2017 fire in Northern California's wine country that killed 22 people. The finding prompted questions about whether PG&E still needed to file for bankruptcy. Gov. Gavin Newsom's office estimated that more than half of the roughly $30 billion in potential damages the company cited was from the wine country fire.Legal experts said they still expected PG&E to move forward with bankruptcy in part because that would give the company space to formulate a plan to prevent its equipment from causing more catastrophic fires and reduce its future wildfire liability.California may have to change an existing law that holds utilities entirely liable for damage caused by their equipment regardless of whether the company was negligent, said Kenneth Ayotte, who teaches corporate finance and bankruptcy law classes at the University of California, Berkeley School of Law.PG&E would also be able to consolidate all wildfire lawsuits in bankruptcy court, where victims would have to tussle with creditors and would likely end up with less money.Monday's CPUC meeting may have provided a glimpse of the acrimony that would accompany any bankruptcy filing. Protesters repeatedly denounced and spoke over members of the commission and booed and shouted, "Shame," as it voted to allow PG&E to immediately obtain credit and loans as part of any Chapter 11 filing. PG&E has said it has lined up $5.5 billion in credit and loans so it could continue operating during bankruptcy.Commissioner Martha Aceves said the CPUC's decision would allow "the continuation of the lights being on" if PG&E declared bankruptcy. She was then drowned out by protesters in the crowd. Commission President Michael Picker said the decision did not "encourage or enable" the company to seek bankruptcy and was not in any way an endorsement of that decision.The commission faced criticism after it gave short notice of the meeting. State law generally requires multiple days of notice for public meetings, but the CPUC cited an exception for emergency situations that affect public health or safety.Protesters accused the commission of holding the meeting illegally and bailing out PG&E despite its role in wildfires."This is absolutely disgusting what you're doing right now," Jessica Tovar, a member of the group, Local Clean Energy Alliance, said during a public comment session.Christopher Chow, a spokesman for the CPUC, said in an email it had met its noticing requirements for the meeting.</s>Power provider PG&E Corp filed for voluntary Chapter 11 bankruptcy protection on Tuesday, succumbing to liabilities stemming from wildfires in Northern California in 2017 and 2018.

REUTERS: Power provider PG&E Corp filed for voluntary Chapter 11 bankruptcy protection on Tuesday, succumbing to liabilities stemming from wildfires in Northern California in 2017 and 2018.

The owner of the biggest U.S. power utility has filed a motion seeking court approval for a US$5.5 billion debtor-in-possession financing, it said in a statement.

"Throughout this process, we are fully committed to enhancing our wildfire safety efforts, as well as helping restoration and rebuilding efforts across the communities impacted by the devastating Northern California wildfires," PG&E interim Chief Executive Officer John Simon said.

The company said it intends to pay suppliers in full under normal terms for goods and services provided on or after the date of the Chapter 11 filing.

Separately, PG&E shareholder BlueMountain Capital Management LLC said it was "deeply disappointed" that the company's board ignored calls from multiple parties to abandon its "reckless and irresponsible plan to file for bankruptcy."

The investment firm said it would propose a slate of board directors no later than Feb. 21, and urged all PG&E stakeholders to support change at the company.

PG&E, which had a debt burden of more than US$18 billion, said earlier this month it would need to pursue a court-supervised reorganization in the aftermath of the blazes, including November's so-called Camp Fire.

The Camp Fire broke out on the morning of Nov. 8 near the mountain community of Paradise, sweeping through the town and killing at least 86 people, in the deadliest and most destructive wildfire in state history.

Reinsurance company Munich Re termed the Camp Fire as the world's most expensive natural disaster of 2018 and earlier this month pegged the overall losses from it at US$16.5 billion.

PG&E, which filed for bankruptcy once before in 2001, 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 and other destructive wildfires.

Earlier this month, a state fire agency said PG&E equipment was not to blame for a 2017 wildfire in California's wine country, but the company faces dozens of lawsuits from owners of homes and businesses that burned during that and other 2017 fires.

The San Francisco-based company provides electricity and natural gas to more than six million customers in Northern California. Last year, lawmakers gave it permission to raise rates to cover wildfire losses from 2017. But elected officials this month showed little appetite for new rate hikes or other maneuvers to prevent a bankruptcy filing.

The bankruptcy petition was filed in the U.S. Bankruptcy Court for the Northern District of California.</s>Pacific Gas and Electric has filed for bankruptcy protection after coming under pressure from billions of dollars in claims tied to deadly wildfires.

California’s largest power company said in a statement Tuesday that it had submitted a Chapter 11 bankruptcy filing in the Northern District of California.

PG&E said it was committed to maintaining services for customers during the bankruptcy process.

John Simon, the company’s Interim CEO, said he would work “to create a more sustainable foundation for the delivery of safe, reliable and affordable service.”

“We have heard the calls for change and we are determined to take action throughout this process to build the energy system our customers want and deserve,” he said in the statement.

PG&E has been linked to a series of wildfires in California, including the Camp Fire, which caused 86 deaths and destroyed 14,000 homes, along with more than 500 businesses and 4,300 other buildings.

PG&E announced on January 14 that it intended to file for bankruptcy, but it had to wait 15-day period required by California law.

The company needs to use the bankruptcy process — which will allow it to shed some of its debt — to pay for damages and stay in business.

PG&E said Tuesday it was seeking approval for a $5.5 billion debtor-in-possession financing agreement. Previously, it said in a filing that it has only about $1.5 billion in cash and cash equivalents on hand.

The company has cited at least $7 billion in claims from the Camp Fire. It is believed that the Camp Fire was started when a PG&E power line came in contact with nearby trees.

PG&E reported “an outage” on a transmission line in the area where the blaze began, about 15 minutes before it started. Within the massive burn area, PG&E found power equipment and a fallen power pole riddled with bullet holes, according to a letter it sent to regulators. The company also reported that it found a downed line with tree branches on it.

In addition, a series of wildfires in 2017 — many of which were also blamed on PG&E — caused $10 billion in damages and 44 deaths. In 11 of those fires, state investigators found the company violated codes regarding brush clearance near its power lines or had made related violations.</s>California utility PG&E, facing billions of dollars in potential liabilities over its role in a series of deadly wildfires, filed for bankruptcy protection on Tuesday.

The company, the largest utility in America's most populous state, has been under intensifying scrutiny in the wake of the so-called 2018 Camp Fire in Northern California that left 86 people dead, destroyed some 18,000 buildings and came on the heels of deadly wildfires in the state in 2017.

That Camp Fire catastrophe, the deadliest fire in the state's modern history, has sharpened questions about whether a company with a troubled history has put profit ahead of safety.

PG&E, whose shares have fallen 72 percent over the last year, could face huge liabilities if investigations reveal its equipment was directly responsible for the fire.

The company is committed to providing safe and reliable electricity throughout the bankruptcy and to work for "an orderly, fair and expeditious resolution of its liabilities resulting from the 2017 and 2018 wildfires," it said in a statement.

"To be clear, we have heard the calls for change and we are determined to take action throughout this process to build the energy system our customers want and deserve," interim chief John Simon, who has led the company following the resignation earlier this month of former Chief Executive Geisha Williams, also said in the statement.

One line of inquiry for investigators is over what role a damaged 115,000-volt line at one of PG&E's towers reported by the company just moments before the fire may have played in the conflagration.

Documents provided to AFP by the operator said the power line, called "Caribou Palermo," was put into service in the 1920s by Great Western Power Company, which was acquired by PG&E in 1930.

"It is clear that the Camp Fire resulted from PG&E´s willful and conscious disregard of public safety," according to a lawsuit filed by Butte County against the utility, which said the company failed to properly maintain vegetation growth near its electric lines.

"They don't need to control Mother Nature," said John Fiske, an attorney representing more than 1,000 victims. "What they need to control is their own assets."

Critics point to the company's record of problems, including 737 counts of criminal negligence over failing to trim trees near power lines following a big fire in 1994.

Regulators with the California Public Utilities Commission, or CPUC, found that PG&E diverted $77.6 million from its tree-trimming budget to other uses, according to the Butte lawsuit.

"During that same time, PG&E underspent its authorized budgets for maintaining its systems by $495 million and instead, used this money to boost corporate profits," according to the Butte claim.

The company was also fined $1.6 billion over a 2010 gas pipeline explosion in San Bruno, California that killed eight and injured 58.

A federal judge who oversaw the company's criminal probation following the pipeline disaster said earlier this month he might order the company to re-inspect its entire electrical grid.

Mindy Spatt of the public utilities watchdog TURN also blames regulators for the problems, saying the CPUC "has not been able to provide sufficient oversight."

But CPUC President Michael Picker has told state lawmakers the agency's prime role was as an economic regulator to ensure adequate, affordable electricity and that it lacks the manpower to oversee safety for all of the power lines throughout the state.</s>PG&E Corp. filed for bankruptcy protection on Tuesday as it struggles with billions of dollars in potential liabilities from its role in sparking California wildfires, triggering one of the most complex corporate reorganization cases in years.

California's largest utility, which provides natural gas and electric service to 16 million people, sought protection under chapter 11 of the bankruptcy code. The process to restructure its debts is expected to be protracted, involving state and federal regulators, with wide-ranging implications for utility customers, fire victims, shareholders and wholesale power providers.

PG&E telegraphed earlier this month that it planned to file for bankruptcy, complying with a recently enacted state law that requires it to provide a 15-day notice before taking that step.

The company said earlier this month that it faces about 750 complaints on behalf of at least 5,600 fire victims who allege damages caused by PG&E equipment, and estimated that its fire-related liabilities could ultimately exceed $30 billion.

Write to Katherine Blunt at Katherine.Blunt@wsj.com and Russell Gold at russell.gold@wsj.com</s>SAN FRANCISCO — The Latest on PG&E bankruptcy filing (all times local):

The largest utility in the U.S. has filed for bankruptcy as it faces billions of dollars in potential damages from wildfires in California.

Pacific Gas & Electric Corp. filed documents in a U.S. court Tuesday seeking Chapter 11 reorganization. The move comes despite state investigators determining last week that the utility's equipment was not to blame for a 2017 fire that killed 22 people in Northern California wine country.

The company cited hundreds of lawsuits from victims of that blaze and others in 2017 and 2018 when it announced this month that it planned to file for bankruptcy.

It's already facing lawsuits over a November blaze in the town of Paradise that killed at least 86 people and destroyed 15,000 homes, though its cause is still under investigation.

California regulators are poised to remove a major hurdle to a planned bankruptcy filing by Pacific Gas & Electric Co.

The California Public Utilities Commission voted unanimously Monday at a hastily announced meeting to allow PG&E to immediately obtain credit and loans while it's under Chapter 11. PG&E normally needs to go through a lengthy approval process for such financing. Monday's decision exempted it from that requirement.

PG&E announced earlier this month that it will file for bankruptcy in the face of billions of dollars in potential damages from catastrophic wildfires in California in 2017 and 2018.

The company later said it had lined up $5.5 billion in credit and loans that would allow it to continue operating in bankruptcy.

California regulators are poised for a bankruptcy declaration by the nation's largest utility as it faces billions of dollars in potential damages from wildfires in the state.

Pacific Gas and Electric Corp. had said the decision could come Tuesday. The California Public Utilities Commission scrambled ahead of the deadline to ensure PG&E would have financing that the company says it would need to continue providing electric and gas service under Chapter 11.

The four members of the commission voted unanimously Monday at a raucous, hastily announced meeting to exempt PG&E from a longer approval process for bankruptcy credit and loans.

The decision cleared a major obstacle to the company's planned bankruptcy filing, but also likely set off a yearslong court battle.
Pacific Gas and Electric Company files for Chapter 11 bankruptcy for its recent roles in the California wildfires.