Iulia Gheorghiu, Utility Dive
Summary
When Pacific Gas & Electric (PG&E) raised the specter of bankruptcy earlier this summer, the investor-owned utility expected extensive charges related to liabilities from wildfires in 2017 and earlier, which were still being assessed and challenged.
Since then, Northern California has seen some of the most destructive fires in the state's history, such as the Camp Fire in November, which killed more than 80 people. Fire seasons in the state are anticipated to last longer and worsen, and the brunt of the responsibility for their start is being borne by California's regulated utilities under the state's inverse condemnation laws. The inverse condemnation doctrine makes regulated utilities in California vulnerable to liabilities from wildfires if their equipment is involved, regardless of negligence.
The utility secured $5.5 billion in financing, with an option to extend, to fund its operations during bankruptcy proceeding, despite the efforts of California's governors and utility regulators to avoid bankruptcy. PG&E expects the proceeding to last up to two years, while also facing extensive litigation regarding the wildfires.
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