Earlier this month, the San Francisco-based utility disclosed that it plans to file for Chapter 11 bankruptcy on or about Jan. 29, saying it "faces extensive litigation and significant potential liabilities" in connection with Northern California wildfires in 2017 and 2018." The company estimated its liability for the wildfires "could exceed $30 billion," according to an SEC 8-K filing from Jan. 13.
Gov. Gavin Newsom said his office estimates that $17 billion of that $30 billion figure is from the Tubbs Fire in the wine country. The new governor said the figure raises questions about whether PG&E would file for bankruptcy.
"They [PG&E] will make that determination," Newsom said. "The state of California cannot make that determination for them. They have the right to make that determination, and we will respond accordingly."
The governor said his goal is to make sure victims are made whole, that the state has "safe, reliable and affordable service," and that ratepayers "are not paying the price of the neglect" by PG&E established in past wildfires.
Utilities in California face liability under what's known as inverse condemnation as well as for negligence claims for wildfire and other damaging incidents caused by such things as power lines or other utility equipment. There are state regulations requiring strict vegetation management practices by utilities, and they include standards for keeping vegetation clear of power lines.
The Camp Fire — the deadliest wildfire in state history — remains under investigation, although PG&E has previously acknowledged it had electrical equipment problems the day the Northern California fire started. The fire destroyed most of the town of Paradise and led to a flood of lawsuits against the utility.
"Cal Fire has completed its investigation of the 2017 Tubbs Fire and concluded that PG&E facilities did not cause the fire," PG&E said in a statement Thursday. "Regardless of today's announcement, PG&E still faces extensive litigation, significant potential liabilities and a deteriorating financial situation, which was further impaired by the recent credit agency downgrades to below investment grade."
The utility added, "Resolving the legal liabilities and financial challenges stemming from the 2017 and 2018 wildfires will be enormously complex and will require us to address multiple stakeholder interests, including thousands of wildfire victims and others who have already made claims and likely thousands of others we expect to make claims."
The Tubbs Fire burned a total of 36,807 acres and caused destruction to entire neighborhoods in the city of Santa Rosa. The city and hundreds of residents have sued PG&E in connection with the disaster.
In all, the October 2017 fires in Northern California involved more than 170 blazes and charred at least 245,000 acres. Nearly 11,000 firefighters were involved in battling the blazes, and help came from more than a dozen other states as well as Australia.