PG&E files for bankruptcy with more than $50 billion in debt

New York: A series of devastating wildfires that killed more than 100 people and scorched hundreds of thousands of acres in California over the course of two years just brought one of America’s largest utilities to its knees.

PG&E Corp and its Pacific Gas & Electric Co utility filed for Chapter 11 bankruptcy in San Francisco, allowing the company to keep operating while it works out a plan to turn the business around and pay off creditors. The action comes as investigators probe whether the utility’s equipment ignited the deadliest fire in state history.

In its filing, the San Francisco-based company listed $51.7 billion in total debts and $71.4 billion in assets.


Since the November fire, PG&E has seen about three-fourths of its market value wiped out, its chief executive officer has left, its bonds have plunged to junk status and estimates of its fire liabilities have swelled to more than $30 billion.

“We did not make this decision lightly, as we understand that millions of our customers rely on us and will have questions,” PG&E’s interim chief executive officer, John R. Simon, said in a letter to customers. “The power and gas will stay on. We will continue to provide you with reliable electric and natural gas service, and that will not change as a result of this process. To be very clear, we are not `going out of business.”'

The shares rose because “you've got some guys who are looking at their estimates of future recovery and thinking that there's going to be positive recovery for the equity,” Katie Bays, a Washington-based analyst at Height Securities LLC, said in an interview Tuesday.

California's wildfires have in the past saddled utilities with millions of dollars in damages, but never have the blazes exacted such a massive financial toll from a company — creating one of the country's largest utility bankruptcies of all time. The only time the company has ever faced such dire financial straits was during the 2001 energy crisis, when it was forced to place its utility unit in bankruptcy protection.