State Regulators Face Criticism for Hastily Announced Meeting That Could Clear Hurdle in PG&E Bankruptcy Filing
California regulators faced criticism Monday for a hastily announced meeting that could clear a major hurdle to a bankruptcy filing by Pacific Gas & Electric Corp.
The California Public Utilities Commission gave just several hours of notice for a meeting later in the day to decide whether to allow the company that provides electric and gas service to 16 million customers in Northern and central California to immediately obtain credit and loans while the company is under Chapter 11.
State law generally requires multiple days of notice for public meetings. The CPUC cited an exception for emergency situations that affect public health or safety.
Mindy Spatt, a spokeswoman for The Utility Reform Network, said PG&E’s financing did not qualify as an emergency.
“These are public assets that are being discussed, and there’s supposed to be a public process,” Spatt said. “Everything the commission does is supposed to happen in a public process, and this is just the opposite.”
Christopher Chow, a spokesman for the CPUC, said it had met its noticing requirements for the meeting.
PG&E normally needs to go through a longer approval process before the CPUC for debt financing. It is seeking an exemption from that requirement at Monday’s meeting. The company, which filed public notice of its planned bankruptcy on Jan. 14, has told the commission it needs the bankruptcy financing to continue providing gas and electric service and funding wildfire prevention efforts.
Without “timely” bankruptcy financing, “this Commission faces a substantial risk that the public health and safety of California will be severely impaired” if gas and electric service is “compromised,” CPUC President Michael Picker said in a filing proposing that the CPUC approve PG&E’s request.
He also said the decision would not in any way indicate the CPUC endorsed PG&E’s bankruptcy.
The Utility Reform Network urged the CPUC not to immediately grant PG&E’s request. The CPUC should instead push the utility to reevaluate the need for bankruptcy following a state fire investigation’s determination that PG&E’s equipment was not to blame for a 2017 fire in Northern California’s wine country that killed 22 people, TURN said in a filing with the CPUC.
PG&E cited hundreds of lawsuits from victims of that blaze and others in 2017 and 2018 when it announced that it planned to file for bankruptcy on or around Jan. 29 in the face of at least $30 billion in potential wildfire damages. The company later it said it had lined up $5.5 billion in credit and loans so it could continue operating during bankruptcy.
The bankruptcy would consolidate the lawsuits and potentially leave thousands of wildfire victims without compensation.
Gov. Gavin Newsom’s office has estimated that more than half of the roughly $30 billion in potential damages the company cited was from the wine country fire.
According to TURN, PG&E has indicated it could access a significant amount of capital even without bankruptcy.