PG&E files for bankruptcy amid wildfire lawsuits

SAN FRANCISCO (AP) — Faced with potentially ruinous lawsuits over California's recent wildfires, Pacific Gas & Electric Corp. filed for bankruptcy protection today in a move that could drive up rates for customers of the nation's biggest utility and reduce the size of any payouts fire victims receive.

The Chapter 11 filing allows PG&E to continue operating while it puts its finances in order. But it was seen as a possible glimpse of the financial toll that could lie ahead because of global warming, 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.

PG&E cited hundreds of lawsuits from victims of fires in 2017 and 2018 and tens of billions of dollars in potential liabilities 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 under investigation, but suspicion fell on PG&E after it reported power line problems nearby around the time the fire broke out.

Last week, however, state investigators determined the company'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 and consolidates them in bankruptcy court, where legal experts say victims will probably receive less money.

In a bankruptcy proceeding, 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 creditors, such as banks, when a judge decides who gets paid and how much.

"My administration will continue working to ensure that Californians have access to safe, reliable and affordable service, that victims and employees are treated fairly, and that California continues to make forward progress on our climate change goals," Gov. Gavin Newsom said in a statement.