1.PG&E sign etched in stone on top of building
2. PG&E headquarters building
3. SOUNDBITE (English) Jared Ellias, Associate Professor of Law - UC Hastings
"PG&E as you may or may not be aware has been struggling for a while with what to do about potentially tens of billions of dollars in tort liability for wildfires that happened in California in 2017 and 2018. So a lot of people were hurt by those fires and they have claims that PG&E might have to pay them for. So PG&E has been struggling for the past couple of years with what to do about that. The state gave them a little bit of help last year and then finally over the past couple months it's become clear that there's a lot of liability related to 2018. PG&E has a lot of claims against it, many billions of dollars in claims. It also became clear that there was no good solution in the offing and so PG&E, given that it's being sued by thousands of wildfire victims decided today they were going to file for bankruptcy protection and by filing for bankruptcy protection what they get is the breathing space they're going to need to reorganize."
6. SOUNDBITE (English) Jared Ellias, Associate Professor of Law - UC Hastings
"They are going to be able to continue to meet the needs of power customers throughout California. There's really no reason for the average customer to be concerned. Later you might be concerned about rate increases but we're not there yet. For wildfire victims, it changes the world that they live in. So before they were suing PG&E in state court or maybe they were thinking of doing it. Now there's going to be a process that runs through the bankruptcy court where their claims will be estimated, resolved and they may not be paid 100 cents on the dollar for every dollar that they're owed."
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 nation's biggest utility and reduce the size of any payouts to fire victims.
The Chapter 11 filing allows PG&E to continue operating while it puts its books in order.
But it was seen as a glimpse of the financial toll that could lie ahead for the industry because of climate change, which scientists say is leading to fiercer, more destructive blazes and longer fire seasons.
The bankruptcy could also jeopardize California's ambitious program to switch entirely to renewable energy sources within a few decades.
PG&E, which supplies natural gas and electricity to 16 million people in Northern and central California, cited hundreds of lawsuits from victims of fires in 2017 and 2018 and tens of billions of dollars in potential liability when it announced earlier this month that it planned to file for bankruptcy.
The blazes include the nation's deadliest wildfire in a century — the one in November that killed at least 86 people and destroyed 15,000 homes in Paradise and surrounding communities.
The cause is still under investigation, but suspicion fell on PG&E after it reported power line problems nearby around the time the fire broke out.
PG&E said the bankruptcy will not affect electric or gas service and will allow for an "orderly, fair and expeditious resolution" of wildfire claims.
The bankruptcy filing immediately puts the lawsuits on hold and consolidates them in bankruptcy court, where legal experts say victims will probably receive less money.