Los Angeles (AFP) - Pacific Gas and Electric, the utility company that has been tied to deadly wildfires in California, said Monday it plans to file for bankruptcy protection at the end of the month.
The San Francisco-based company said its decision to reorganize under Chapter 11 is linked to more than $30 billion in claims it is facing over the so-called 2018 Camp Fire in Northern California -- the deadliest in the state's modern history -- that left 86 people dead.
The utility has also been sued over blazes in 2017 that devastated the wine region in Northern California and left more than 40 people dead.
"The company today provided the 15-day advance notice required by recently enacted California law that it and its wholly owned subsidiary Pacific Gas and Electric Company currently intend to file petitions to reorganize under Chapter 11 of the US Bankruptcy Code on or about January 29," a statement said.
It said the bankruptcy filing, which saw shares plunge 52 percent on Monday, should not affect electric or natural gas service to its 16 million customers in California.
PG&E has come under intense scrutiny following the devastating wildfires in California after it emerged that some of its aging equipment may have sparked the blazes.
Faulty equipment
A class action lawsuit filed in December by victims of the deadly Camp Fire accuses the company of sparking the blaze that wiped out an entire town.
The lawsuit claims PG&E over the years has failed to properly maintain, repair and replace its equipment and that its "inexcusable" behavior helped spark the Camp Fire.
It adds that the company also failed to maintain the vegetation around its infrastructure, thus heightening the risk of a "catastrophic event."
The suit points to a report the utility filed concerning problems with a power line shortly before the Camp Fire erupted.
The company has previously said that if found responsible for the blaze that destroyed about 14,000 home, the liability would be far more than its insurance would cover.
PG&E is also facing hundreds of lawsuits stemming from the wildfires in Northern California in 2017.
Experts said the bankruptcy filing would likely allow the company to consolidate all the lawsuits it is facing before a single judge.
Monday's bankruptcy announcement came a day after Geisha Williams resigned as CEO of the utility and was replaced on an interim basis by executive vice president and general counsel John Simon.
"The people affected by the devastating Northern California wildfires are our customers, our neighbors and our friends, and we understand the profound impact the fires have had on our communities and the need for PG&E to continue enhancing our wildfire mitigation efforts," Simon said.
"We remain committed to helping them through the recovery and rebuilding process," he added.
"We believe a court-supervised process under Chapter 11 will best enable PG&E to resolve its potential liabilities in an orderly, fair and expeditious fashion."
