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Lawmakers Say PG&E Talking Bankruptcy After October Wildfires

SACRAMENTO (CBS13) — California lawmakers say Pacific Gas & Electric has warned them it may need to reorganize if it is found legally liable for the 2017 October firestorm that devastated Wine Country.

Lawmakers say PG&E is considering bankruptcy protection if it faces large penalties from the California wildfires. A Cal Fire report released on June 8 tied the utility to 12 of the blazes and referred eight of them to district attorneys for potential prosecution.

RELATED: Cal Fire Ties 12 Blazes In Deadly October Firestorm To PG&E Lines

PG&E denies liability for the wildfires, saying climate change is to blame.

Analysts say the fires could cost the utility $15 billion or more in fines and other liabilities.

It wouldn't be the first time PG&E has filed for bankruptcy protection. The company filed in 2001 during California's energy crisis.

RELATED:  Congressman: 'PG&E Is In A Heap Of Trouble' After Cal Fire Report

PG&E's stock has taken a heavy beating since the October wildfires. Shares dropped $16 a share in two days in October after word the company's lines may be tied to the fires got out. Shares have continued to sag as the specter of a potential lawsuit hangs over the company.

TOPSHOT - An inmate firefighter monitors flames as a house burns in the Napa wine region in California on October 9, 2017, as multiple wind-driven fires continue to whip through the region. (Credit: JOSH EDELSON/AFP/Getty Images)

Shares in PG&E were trading at $40.20 on Friday, down significantly from nearly $70 a share on Oct. 11.

State Sen. Jerry Hill (D-San Francisco) says PG&E executives have been at the Capitol threatening bankruptcy to get lawmakers to bail them out.

"In this Capitol, they keep talking about the sky is falling, that they're going to go bankrupt and what are we going to do, and they're creating a lot of fear in the Capitol," Hill said.

"It's what we hear from back channels. They're asking for complete immunity for negligence for any harm that they caused," said San Diego attorney Gerald Singleton.

Firefighters attempt to control the adva
(Photo credit should read ROBYN BECK/AFP/Getty Images)

Singleton has been in those meetings. He's representing hundreds of homeowners suing to get PG&E to pay.

Singleton has represented victims in past lawsuits involving utilities and wildfires, including the 2007 wildfires in San Diego tied to San Diego Gas & Electric and the 2015 Butte Fire tied to PG&E. Despite similar names, SDG&E is owned by Sempra Energy.

PG&E would not respond directly to our questions whether it is considering bankruptcy, but in a written statement, a spokeswoman says California's rules about wildfire liability are not sustainable, saying in part:

"PG&E could be liable for property damages and attorneys' fees even if we followed established inspection and safety rules."

Multiple Wildfires Destroy Homes, Threaten California Wine Country
NAPA, CA - OCTOBER 09: The remains of the fire daaged Signarello Estate winery after an out of control wildfire moved through the area on October 9, 2017 in Napa, California. Ten people have died in wildfires that have burned tens of thousands of acres and destroyed over 1,500 homes and businesses in several Northen California counties. (Photo by Justin Sullivan/Getty Images)

The company also says it meets or exceeds regulatory requirements for pole management with a large inspection program. Downed power lines and faulty equipment are blamed for sparking the 2017 wildfires. It wants to work with the state to change the current liability laws, because it is taking a big hit, saying:

"Liability regardless of negligence undermines the financial health of the state's utilities, discourages investment in California and has the potential to materially impact the ability of utilities to access the capital markets."

"They have a guaranteed profit, part of being a monopoly of roughly $1 billion to $1.5 billion per year," said Singleton.

With so much money coming in, lawmakers think bankruptcy is PG&E's scare tactic.

But Hill isn't buying it.

"When they're negligent when they do not perform to industry standards, they pay," he said.

Hill is pushing the legislature to pass a bill that would protect consumers from PG&E's negligence.

Whether we'll see rate hikes passed on to ratepayers to cover PG&E's potential liability remains unclear. The California Public Utilities Commission rejected an effort in November by SDG&E to pass the costs onto its customers.

The CPUC did not respond to our request for comment on the story.


Cal Fire disclosed the causes of 12 wildfires on June 8, referring eight of them to district attorneys for possible prosecution. Cal Fire previously released the cause of four other wildfires on May 25, saying PG&E could have done more to prevent three of those fires. No deaths were reported in those four fires.

  • Redwood Fire (Mendocino County)
    • 35,623 acres
    • 543 structures destroyed
    • 9 civilian fatalities
    • Cause: Tree or parts of trees falling onto PG&E power lines
  • Sulphur Fire (Lake County
    • 2,207 acres
    • 162 structures destroyed
    • Cause: PG&E owned power pole failed, lines and equipment coming in contact with ground
    • Note: Investigation passed on to district attorney's office for review
  • Cherokee Fire (Butte County)
    • 8,417 acres
    • 6 structures destroyed
    • Cause: Tree limbs coming in contact with PG&E power lines
  • 37 fire (Sonoma County)
    • 1,660 acres
    • 3 structures destroyed
    • Cause: Electrical and associated with PG&E distribution lines in the area
  • Blue Fire (Humboldt County)
    • 20 acres
    • Cause: PG&E power line conductor separated from connector and fell to ground.
    • Note: Investigation passed on to district attorney's office for review
  • Pocket Fire (Sonoma County)
    • 17,357 acres
    • 6 structures
    • Cause: Broken oak tree contacted PG&E power lines
    • Note: Investigation passed on to district attorney's office for review
  • Atlas Fire (Napa County)
    • 51,624 acres
    • 6 fatalities
    • 783 structures destroyed
    • Cause: Fire started in two locations
      • A large limb broke from a tree, contacted PG&E power line
      • A tree fell on the same line.
    • Note: Investigation passed on to district attorney's office for review

Fires that merged in Sonoma and Napa counties, burning 56,556 acres combined, 1,355 structures and killing three people:

  • Norrbom Fire
    • Cause: Tree fell and came into contact with power lines.
    • Note: Investigation passed on to district attorney's office for review
  • Adobe Fire
    • Cause: Eucalyptus tree falling into power line.
    • Note: Investigation passed on to district attorney's office for review
  • Partrick Fire
    • Cause: Oak tree falling into power lines.
    • Note: Investigation passed on to district attorney's office for review
  • Pythian Fire
    • Cause: Downed power line after PG&E tried to re-energize the line
    • Note: Investigation passed on to district attorney's office for review
  • Nuns Fire
    • Cause: Broken top of a tree came in contact with a power line.


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