PG&E may notify its employees this week of potential bankruptcy
PG&E Corp., facing billions of dollars in wildfire liabilities, may notify employees as soon as Monday that it’s preparing a potential bankruptcy filing, according to people familiar with the situation.
The San Francisco utility owner is planning to send the notice to fulfill a state law that requires the company to alert workers at least 15 days before a change of control, said the people, asking not to be identified because the information isn’t public. The notice wouldn’t necessarily make a bankruptcy filing certain and the company could still decide not to if its situation changes, one of the people said.
PG&E declined to provide a statement, saying the company doesn’t comment on rumor or speculation.
A notice may signal that the company has accelerated plans to make a Chapter 11 filing as way of dealing with crippling liabilities from wildfires that tore through California in 2017 and 2018, killing over 100 people and destroying hundreds of thousands of acres. Investigators are probing whether PG&E’s equipment ignited the deadliest of the blazes.
The company is facing as much as $30 billion in damages — a prospect that has wiped out two-thirds of PG&E’s market value, sent its bonds plummeting to record lows and prompted rating companies to downgrade PG&E’s debt to junk.
California passed legislation last year in the aftermath of the deadly wine country fires requiring utilities to post public notices for employees at least 15 days before a change of control, including a bankruptcy filing.
California Gov. Gavin Newsom said during a news conference Thursday that his office would be making an announcement related to PG&E within the next few days and that the issue was at the top of his agenda. He said in a later interview that the announcement would involve appointments to the California Public Utilities Commission, the state’s grid operator and to a commission established by the Legislature to explore wildfire issues.
Newsom is “monitoring the situation very closely,” Nathan Click, a spokesman for his office, said Saturday.
PG&E’s deepening financial crisis has already spread to the companies that supply its natural gas and generate electricity for its customers. At least two small gas suppliers have restricted sales to PG&E out of concern that the company won’t be able to pay, people with direct knowledge of the situation said earlier this week. Some banks are taking a long look at a potential $2-billion debt financing for the Geysers, the world’s largest geothermal complex, because it supplies the utility, people familiar with the matter also said this week.
On Thursday, S&P Global Ratings cut the credit rating of Berkshire Hathaway Energy’s 550-megawatt Topaz Solar Farms to junk, noting that the plant counts on PG&E for all of its revenue.
People familiar with PG&E’s situation said last week that the company is considering filing for bankruptcy within weeks.
Chediak writes for Bloomberg.
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