By Mark Chediak and Joel Rosenblatt
The quick series of events concludes a tumultuous chapter for PG&E. Yet it’s exiting bankruptcy facing many of the same challenges as it did the day it filed. Efforts to strengthen its finances and safety procedures are still underway, and the long-term future of the giant utility remains in question.
“It’s only going to take one season like the last couple and they’d be back in bankruptcy,” said San Jose Mayor Sam Liccardo, who led an unsuccessful push to turn PG&E into a customer-owned cooperative.
During an online hearing, U.S. Bankruptcy Judge Dennis Montali said he will issue a notice Wednesday outlining his plan to approve PG&E’s restructuring. The judge said he will schedule a hearing for Friday to iron out a handful of issues.
“I’m going to come to the conclusion that the plan should be confirmed,” Montali said.
An attorney for PG&E asked for an official order confirming the plan by Monday so the company can start selling $9 billion in equity to help fund its reorganization. It’s already sold $8.9 billion in investment-grade bonds and is raising $3.75 billion in junk bonds. As of Tuesday morning, the company had received about triple the number of orders it’s seeking for the high-yield notes.
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On the morning of Nov. 8, 2018, in the foothills of the Sierra Nevada mountains, a faulty PG&E transmission line ignited what soon became a hell on Earth — a fire that soon consumed more than 150,000 acres, including the entire town of Paradise. It killed more than 80 people and destroyed nearly 19,000 homes, businesses and other structures.
PG&E, which serves about 16 million people in Northern and Central California, has made some crucial changes since collapsing into bankruptcy in the aftermath of the blaze. It has replaced 11 of its 14 board members and is allowing for additional state oversight, appointing an independent safety monitor and dividing operations into regional units to focus more on safety. The company will have a new chief executive officer after its current one, Bill Johnson, steps down at the end of the month.
As the judge prepared to announce his decision Tuesday, Johnson appeared in a California courtroom in Chico, some 20 miles from where the Camp Fire began. On behalf of the company, he pleaded guilty to 84 counts of involuntary manslaughter and one count of unlawfully starting a fire.
“PG&E will never forget the Camp Fire and all that it took from this region,” Johnson said. “We remain deeply, deeply sorry for the terrible devastation we have caused.”