On Wednesday, Pacific Gas & Electric (PG&E) officially exited bankruptcy, ending over one and a half years of bankruptcy and emerging as a company under completely new rules and managing personnel.
PG&E had been in financial and legal trouble since late 2018, when the Camp Fire in Northern California killed over 80 people and caused billions of dollars of damages. The company was immediately sued and caused a large insurance crunch through the abnormal number of claims, leading to their January 2019 bankruptcy as protection against the tens of billions in claims. In 2019, PG&E’s reluctance to admit guilt and claim responsibility, as well as growing evidence of mismanagement, led to Governor Gavin Newsom attempting a public takeover.
Additional actions by PG&E, such as temporarily shutting down power to millions to help reduce wildfire chances, brought them less goodwill in late 2019 from both the public and the government. Earlier this year, PG&E finally admitted fault, agreed to pay $24.5 billion more in settlements, and improve their company, overhauling safety measures and replacing many top executives and board members. The California Public Utilities Committee (CPUC) then gave a green light for the company to emerge from bankruptcy in late May, leading the way for PG&E’s restart on Wednesday. A final $5.4 billion payment and a large trust for the victims of wildfires it caused, as well as $5 billion paid into the state wildfire fund, was paid on Wednesday as a final act before the bankruptcy officially ended.
While PG&E may still become a public utility under the looming SB 350, that would only happen if the bill is passed and if PG&E fails to meet certain safety and other company obligations. The infrastructure and safety rehaul also still has a ways to go for full implementation, and some personnel, such as the CEO position left vacant by former CEO Bill Johnson on Tuesday, still need replacement.
However, interim CEO Bill Smith has said that this marks a ‘new era’ for PG&E.
“This is an important milestone, but our work is far from over,” said Smith in a statement. “Our emergence from Chapter 11 marks just the beginning of PG&E’s next era — as a fundamentally improved company and the safe, reliable utility that our customers, communities and California deserve.”
The human toll in the wake of PG&E’s bankruptcy
For many people who had been personally caught up in the saga, Wednesday’s news came as bittersweet.
“They paid, but it still doesn’t bring the town back, or any of the people they killed,” Dan Ryan, who had a friend die in the Camp Fire and was a frequent visitor to Paradise, told California Globe. “I’ve read stories of people who just lost close loved ones and now have to pay a check to that company that was responsible for killing them. That’s messed up.
“I’m glad they had to pay like this, companies rarely do when at fault, but it doesn’t change the fact that they did all this. That I can never see my friend again. I can’t even tell where he lived anymore, that’s how bad the fire was.
“His funeral was closed casket because what they found of him couldn’t be displayed, you know?
“I don’t live in a PG&E area, but if I did, I’d be up the walls trying to find anyone else to give me electricity and gas. I’d go solar or wind or something. Anything to avoid paying them because of what they did.
“They are never winning back the public’s trust. Not after they erased a town off the map and killed 85 people like that.”
PG&E’s emergence on Wednesday is set to also include payments during the coming years.
PG&E customers are not expected to be financially affected by the company becoming bankruptcy free or through any of its massive changes.
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