CEO on Fate of PG&E: ‘I’m Not the Wikipedia of Bankruptcies’

(Bloomberg) -- The fate of PG&E Corp. remains uncertain and the embattled California power giant still has a lot of work cut out in trying to emerge from the biggest utility bankruptcy in U.S. history, its chief executive told U.S. lawmakers Thursday.

In testimony before a U.S. Senate committee, CEO Bill Johnson said he didn’t have the answers to all of their questions about whether the San Francisco-based electricity provider will survive the bankruptcy in its current form -- especially as California Governor Gavin Newsom calls for a major overhaul of the company. “I’m not the Wikipedia of bankruptcies,” Johnson said in response to Democratic Senator Joe Manchin of West Virginia, who asked if the company was going to “make it” and continue to serve customers.

Johnson’s comments come even after PG&E scored a major victory on Tuesday, when the judge overseeing its bankruptcy approved two multibillion-dollar settlements with wildfire victims that will serve as the centerpiece of its reorganization plan.

The company is still negotiating the terms of its restructuring with Newsom’s office. A clause that the governor wants to include allowing the state to take over the utility’s assets if it fails to meet performance and safety metrics has emerged as a big sticking point in the talks, people familiar with the situation said.

Read More: PG&E CEO’s Timeline to End Blackouts Is a Moving Target

“The bankruptcy court has approved all the settlements with people we owe money to,” Johnson said during a U.S. Senate Committee on Energy and Natural Resources hearing on the risks wildfires pose to power grids. “That’s the key thing in the bankruptcy. There are a lot of other things that have to happen.”

PG&E has struggled for months to come up with a viable restructuring plan that would satisfy the demands of wildfire victims, shareholders, bondholders and state policy makers. Newsom has so far rejected PG&E’s proposals, saying the company needs to come up with a better financing plan, replace its entire board and include the clause that leaves the door open for a government takeover.

A group of PG&E creditors, led by Pacific Investment Management Co. and Elliott Management Corp., have been pitching a rival restructuring plan. They’re offering to inject $20 billion in cash into the company in exchange for almost all of its equity.

To contact the reporter on this story: Gerson Freitas Jr. in New York at gfreitasjr@bloomberg.net

To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Simon Casey

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