PG&E, which is the nation's largest utility by revenue and is based in San Francisco, said it is giving the required 15 days' notice that it plans to file for bankruptcy protection at the end of the month.
PG&E's decision to replace its chief executive is likely meant to satisfy state regulators rather than investors, said Paul Patterson, an analyst who follows PG&E at Glenrock Associates LLC. Williams had been CEO since 2017. Simon is serving as interim chief executive officer for the company.
It said the bankruptcy filing, which saw shares plunge 48 per cent on Monday, should not affect electric or natural gas service to its 16 million customers in California.
A bankruptcy filing is not assured, the sources said.
Action News Now reporter Christina Vitale spoke with a lawyer to break down what bankruptcy means for the company.
PG&E said in a company filing Monday that it has only about $1.5 billion in cash and cash equivalents on hand. State fire officials pointed to damage to PG&E poles and power lines as the cause of more than a dozen fires that year.
Moody's investor rating service warned November 15 that the potential liability of 21 major wildfires in 2017 was roughly $10 billion and that the destructive 2018 Camp Fire, which devastated the town of Paradise and killed 86 people, would add further costs.
The company said it is facing nearly 50 lawsuits related to last November's Camp Fire in Paradise, along with hundreds of lawsuits from fires in Northern and Southern California in 2017.
The first time in recent history that PG&E filed for bankruptcy was in 2001, when "there were some big bills that couldn't be paid and a flawed electricity regulatory system", Wara said. PG&E said it expects to meet its payroll and benefits obligations to employees. General Counsel John Simon will act as CEO until a replacement can be found, according to Bloomberg.
"We remain committed to helping them through the recovery and rebuilding process", he added.
"The Chapter 11 process allows us to work with these many constituents in one court-supervised forum to comprehensively address our potential liabilities and to implement appropriate changes".
"Our search is focused on extensive operational and safety expertise, and the board is committed to further change at PG&E", Kelly said in a statement. It said it believes bankruptcy is in the best interests of not just wildfire claimants but also other creditors, its shareholders and customers.
For the most comprehensive local coverage, subscribe today.
PG&E spent millions in an 11th-hour lobbying effort at the end of the California legislative session in August in a failed attempt to change the law to reduce its liability in wildfires. It also indicated that it will continue to provide natural and electric to its customers during the restructuring phase. He says the energy crisis caused the price of electricity to rise, but the California Public Utilities Commission wouldn't allow the company to raise rates.
The company in its news release said it "has engaged in discussions with potential lenders with respect to Debtor-in-Possession (DIP) financing".
Sometimes running a business which is sinking might seem adventurous for some entrepreneurs but it's a tough task to run a company which is in massive debt and right now that's what is happening with PG&E. The sum should help the company fund its ongoing operations. "Whereas we're making progress as an organization in security and different areas, the board acknowledges the great challenges PG&E continues to face", mentioned Richard C. Kelly, PG&E's chairman.