Why PG&E’s bankruptcy won’t please California wildfire victims, ratepayers or investors
With a Chapter 11 bankruptcy case expected to begin Tuesday, the beleaguered utility last week refused to pay a
"
The
"It's just bad," said
Hours before the expected bankruptcy filing, the
If
Wildfire survivors will get something -- whether they live in
State regulators and elected officials aren't looking forward to this, either, as they struggle with the idea of granting at least some measure of relief for a company that's become extraordinarily unpopular. They're hoping to cobble together a giant settlement plan that will somehow enable
That's a tall order. In the short run, despite their antipathy toward
Even if
If it were up to state officials,
State Sen.
"What can we do to make sure victims don't become victimized again, and ratepayers don't get too big of a hit?" said Dodd, who represents survivors of the 2017 wine-country fires. "It's a balancing act."
Complicating matters is that state policymakers -- Gov.
No priority for victims
Bankruptcy court won't necessarily be kind to wildfire survivors and their claims for billions in damages -- regardless of state officials' desire to make sure they're fully compensated.
What's more, Ellias said, in bankruptcy those wildfire survivors will be lumped in with
While they're sympathetic figures, "in bankruptcy, the fire victims won't have any priority," said Wara, the
In the short run, fire survivors won't get anything.
The utility had paid
Still, lawyers for
The
All told,
Where's the cash?
How does that get paid off? The answer isn't likely to pop up overnight.
One potential source of cash could be a sale of
"I feel very confident that they're marketing the gas division as we speak," Dodd said.
But selling the gas division wouldn't solve everything -- and could possibly make things worse for
That's because creditors might wind up getting compensated, at least partly, with
And if
Breaking up the company, or having a governmental entity take the business over, as some officials have suggested, is easier said than done.
"Who wants to own the risks in the high wildfire areas?" Wara said.
Ratepayer pain?
So what about ratepayers? How much pain will they wind up absorbing?
In the 2001 bankruptcy, rates went up substantially to help
This time around, the utility is already seeking a
None of that money would go to pay liability claims from wildfires. But it's possible that ratepayers could wind up footing some of the liability bills anyway. In Senate Bill 901, signed into law last fall by former Gov.
Dodd, who wrote the legislation, said SB 901 doesn't create a free ride for shareholders; the PUC will have to conduct a "complete financial scrub of
In any event, SB 901 says nothing about the 2018 fires, and Dodd said the Legislature is in no mood to provide more protection for
Lawmakers should wait until after the
Regardless of what happens to rates, Dodd said
"They come out of bankruptcy and everybody takes a haircut," he said. "I think it's important for them to take one, too."
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