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PG&E Bankruptcy Is ‘Only Viable Pathway,’ Senior Executive Says

PG&E Bankruptcy Is ‘Only Viable Pathway,’ Senior Executive Says

(Bloomberg) -- After extensive discussions with California policy makers, PG&E Corp. decided that a bankruptcy filing was “the only viable option” to deal with its deteriorating finances, according to a top company executive.

Steven Malnight, senior vice president of energy supply and policy at the company’s utility unit, said in an interview that the company had been in contact with the governor’s office and regulators at the California Public Utilities Commission as wildfire lawsuits and credit downgrades choked off its access to the capital markets. His comments suggest there may be little that state officials can do to prevent a bankruptcy filing, a step the company said Monday it plans to take at the end of the month.

“We’ve had those dialogues, and that’s been factored into the board’s decision,” Malnight said. “Pursuing Chapter 11 is the only viable pathway.”

PG&E Bankruptcy Is ‘Only Viable Pathway,’ Senior Executive Says

PG&E has been blamed for a series of deadly wildfires in 2017 and 2018 -- including last year’s devastating Camp Fire -- that together could cost the company $30 billion. The company’s market capitalization tumbled by 75 percent from just before the 2017 fires through last week. Chief Executive Officer Geisha Williams stepped down on Sunday.

Governor Gavin Newsom on Monday showed little interest in keeping PG&E out of bankruptcy in a statement Monday that called on the company to honor its commitments to its suppliers and customers.

“Throughout the months ahead, I will be working with the legislature and all stakeholders on a solution that ensures consumers have access to safe, affordable and reliable service, fire victims are treated fairly, and California can continue to make progress toward our climate goals,” he said in the statement.

To contact the reporter on this story: David R. Baker in San Francisco at dbaker116@bloomberg.net

To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Margot Habiby, Will Wade

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