San Francisco-based PG&E Co. announced via a news release early Monday morning that it is filing for Chapter 11 bankruptcy just one day after its CEO resigned, according to company officials.
The Monday announcement is a 15-day advance notice that the company intends to file for bankruptcy reorganization around Jan. 29, utility officials said. The company does not expect any impact to electric or natural gas customers, and reiterated its commitment to rebuilding communities affected by massive wildfires in 2017 and 2018.
PG&E interim CEO John Simon said:
“Chapter 11 will best enable PG&E to resolve its potential liabilities in an orderly, fair and expeditious fashion.”
On Sunday, the company’s CEO Geisha Williams, the chief executive officer of PG&E since March 2017, resigned, and Simon, who was the corporation’s Executive Vice President and General Counsel, was named as her interim replacement.
Cal Fire determined in June 2018 that some of the devastating wildfires that struck Northern California in 2017 were caused by PG&E equipment. Cal Fire announced that the utility’s “electric power and distribution lines, conductors and the failure of power poles”, caused at least a dozen wildfires in six Northern California counties. “Our goal will be to work collaboratively to fairly balance the interests of our many constituents – including wildfire victims, customers, employees, creditors, shareholders, the financial community and business partners – while creating a sustainable foundation for the delivery of safe service to our customers in the years ahead,” said Richard Kelly, Chair of the PG&E Board of Directors.
The bankruptcy announcement and Williams’ departure comes as PG&E is facing a financial crisis. Its market value has plunged since November’s Camp Fire, which devastated the town of Paradise and surrounding areas in Butte County.
Damage from that blaze, the state’s deadliest ever, and from 2017’s Tubbs fire that caused major damage in Santa Rosa and other parts of Sonoma, Napa and Lake counties, could lead to the company being liable for up to $30 billion.
PG&E has started the search for a permanent CEO, but Richard C. Kelly, board chairman of PG&E, on Sunday said Simon is the man for the moment.
“We believe John is the right interim leader for the company while we work to identify a new CEO,” Kelly said in a statement. “Our search is focused on extensive operational and safety expertise, and the Board is committed to further change at PG&E.” Simon has served as PG&E’s executive vice president and general counsel since 2017, and has been with the company since 2007, serving in several management roles.
Williams had also been with PG&E since 2007, and in March 2017 became the first Latina CEO of a Fortune 500 company. In 2017, she made $991,667 in base pay and $7,600,410 in total compensation.
She has resigned from the boards of both PG&E and its holding company.