The Pacific Gas and Electric Company filed for a Chapter 11 bankruptcy on January 14 due to the litigation of lawsuits resulting from the 2017 and 2018 wildfires in Northern California. 

According to the San Francisco Chronicle, PG&E spokeswoman Lynsey Paulo said in an email that the decision to seek bankruptcy protection was reviewed with great measure and that “it is the only viable option for PG&E and will maximize the value of the enterprise for the benefit of all stakeholders.” 

As a result of the devastating wildfires, especially those engulfing Santa Rosa and Paradise, PG&E is liable for the damage that cost thousands of citizens their homes, with fire investigators determining PG&E to be the cause of at least 17 of 21 major Northern California fires in 2017 resulting in billions of dollars in liability claims due to the wildfires from the past two years. 

Cal Fire just announced that PG&E wasn’t responsible for the Tubbs Fire in Santa Rosa, going against what many had thought.

The company’s website says they are responsible for the distribution of natural gas and electric service to nearly 16 million people throughout a 70,000-square-mile service area in northern and central California. Such an expansive distribution of these services to millions of citizens across California proves a fiscal responsibility to make sure that citizens who lost their homes are not left in a financial abyss. 

Erin Brockovich, the well-respected and popular environmental activist, recently spoke at the state Capitol building in Sacramento to talk about the bankruptcy controversy. 

“There is no good reason why these good people should not have the assistance of our legislation,” she said. “[And] of our governor and of this company to help them be made whole and to rebuild their lives and recover.” 

In the meantime, the delay of the payments continues to cause uproar amongst the victims and lawyers involved in the lawsuits against PG&E.

Brockovich questioned the necessity of PG&E’s bankruptcy filing because it essentially threatens to delay or reduce the payments that the fire survivors and the lawyers could obtain from the company.  This characterization of PG&E definitely falters their public image, since they are filing for bankruptcy to escape the lawsuits against them. 

PG&E is caught between a rock and a hard place, having reportedly tried to acquire financial assets from multiple financial institutions in order to avoid a bankruptcy filing, revealing a devastating lack of financial stability.

On January 22, PG&E acquired the security of JPMorgan, Chase, Bank of America, and Citigroup Global Markets for financing to assist in an increase of its capital to a total of $5.5 billion in order to operate during bankruptcy. Subsequently, PG&E has suffered an 80 percent stock value decrease in the last two months and an extremely poor credit rating resulting from the California wildfires. 

The City of Santa Rosa sued PG&E in mid-July last year as a result of the fires in October 2017. 

In a statement released by the City of Santa Rosa, they described their decision to go after PG&E as a difficult, but necessary, one. “Our city suffered tremendous social and economic loss and faces millions of dollars of expense for emergency response and recovery efforts, including the ongoing work of rebuilding damaged infrastructure.”

Last week, Cal Fire announced that PG&E was not responsible for igniting the Tubbs Fire, which destroyed five percent of the buildings in Santa Rosa. This fire was a large reason why Sonoma State was shut down for over a week during the disaster. Instead, Cal Fire said the blaze was caused by a private electrical system on someone’s personal property.