PG&E Corporation and its primary operating subsidiary, Pacific Gas and Electric Company have filed voluntary petitions under Chapter 11 of the US Bankruptcy Code in the United States Bankruptcy Court for the Northern District of California, while seeking court approval to access $5.5 billion in debtor-in-possession financing to support operations and ongoing safety initiatives for the expected duration of the Chapter 11 cases.
In a statement, the utility said it was committed to providing safe and reliable energy, aiding restoration and rebuilding efforts and working together with customers, regulators and community leaders to address wildfire threat.
As part of the filings, PG&E also filed various motions with the Court in support of its reorganization, including requesting authorization to continue paying employee wages and providing healthcare and other benefits. In the filings, PG&E also asked for authority to continue existing customer programs, including low income support, energy efficiency and other programs supporting customer adoption of clean energy. PG&E said it intends to pay suppliers in full under normal terms for goods and services provided on or after the filing date of January 29, 2019.
In order to help support the Company through the reorganization process, PG&E has appointed James A. Mesterharm, a Managing Director at AlixPartners, LLP and an authorized representative of AP Services, LLC (APS), to serve as Chief Restructuring Officer. In addition, PG&E appointed John Boken, also a Managing Director at AlixPartners and an authorized representative of APS, to serve as Deputy Chief Restructuring Officer. Mesterharm, Boken and their colleagues at AlixPartners will continue to assist PG&E with the reorganization process and related activities.
The bankruptcy filing comes after PG&E equipment and vegetation management was blamed by some for the devasting wildfires that have hit Northern California over the past couple of years. On January 24, 2019, however, CAL FIRE released the results of its investigation of the 2017 Tubbs Fire, which concluded that PG&E equipment did not cause the fire. The comprehensive analysis underlying PG&E's decision to pursue reorganization under Chapter 11, conducted with the assistance of independent legal and financial advisors, took into account PG&E's longstanding belief based on available evidence that its equipment did not cause the Tubbs Fire.
As such, PG&E said it continues to believe that the Chapter 11 process will facilitate the orderly, fair and expeditious resolution of the liabilities that have arisen and will continue to arise in connection with the 2017 and 2018 Northern California wildfires.
