Firestorm: Bankruptcy for California’s PG&E
“Facing staggering financial pressure after California’s historically devastating wildfires,” the state’s largest utility company this week announced plans to file bankruptcy, said J.D. Morris in the San Francisco Chronicle. Pacific Gas and Electric, whose power lines have been blamed for igniting dozens of fires, could face liability of more than $30 billion, as well as fines and punitive damages. The company called declaring insolvency “ultimately the only viable option” for continuing service. PG&E shares, which had lost two-thirds of their value since a wave of fires in November, plunged by half in the wake of the announcement, which came the day after the resignation of CEO Geisha Williams.
PG&E’s woes are “the biggest warning yet about the financial risks of climate change,” said Brian Eckhouse and Eric Roston in Bloomberg.com. The ailing utility’s critics blame “negligence and arrogance” for its problems, but PG&E’s contention that it’s the victim of a changing climate can’t be dismissed. As the likelihood of extreme weather disasters grows, “the most directly vulnerable are utilities like PG&E, long viewed as safe and steady investments.” And there are plenty of others at risk, “including farmers, homebuilders, and insurers.” For these businesses and others, PG&E’s plight is “a real wake-up call.”