Calif. Leaders Vow To Shield PG&E Customers From Bankruptcy Fallout

For the second time in two decades, California's largest utility, PG&E, is declaring bankruptcy — this time in the face of potentially massive wildfire liabilities.

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DAVID GREENE, HOST:

The largest utility here in the state of California, Pacific Gas and Electric, has faced much of the blame for the recent wildfires here. State officials determined their equipment sparked 17 fires in 2017. And PG&E is under investigation in last year's deadly Camp Fire. That is the one that destroyed much of the town of Paradise. Now facing what could exceed $30 billion in liability costs, PG&E is now planning to file for bankruptcy. KQED's Marisa Lagos reports on what that could mean.

MARISA LAGOS, BYLINE: The reaction to PG&E's announcement was swift. California Governor Gavin Newsom called on the utility to keep its promises to energy suppliers and its customers. And lawmaker after lawmaker promised to protect the public. Here's Democrat Toni Atkins, president of the state Senate.

TONI ATKINS: I think uppermost is protecting ratepayers, fire victims and, certainly, the integrity and the reliability of our electric and gas service to California's consumers.

LAGOS: Whatever happens at the company, everyone agrees that the lights will stay on in California. The bigger questions are, who will pay for all those wildfire costs and for the upgrades to make sure the electrical grid isn't going to keep sparking deadly blazes? Patrick McClellen lost his home in a 2017 wildfire and has been lobbying on behalf of fire victims at the state capitol for the past year. He believes the utility is posturing to pressure lawmakers into some sort of favorable change in law.

PATRICK MCCLELLEN: Bankruptcy is not a good direction for anybody in California other than bankruptcy lawyers.

LAGOS: And it's definitely not good for victims. Their lawsuits will be put on hold while the company reorganizes. So McClellen is still holding out hope that the state can do something before month's end to prevent bankruptcy.

MCCLELLEN: Are they leveraging? Yes. Do we trust them? No. But there is a severe financial problem with that utility given everything that they're going to have to do in order to create a safe - for all of us and to reimburse victims.

LAGOS: Another key player in the discussion is PG&E's workforce, which is largely represented by the International Brotherhood of Electrical Workers. Tom Dalzell is IBEW Local 1245's business manager. He doesn't think their contract or pensions are at risk.

TOM DALZELL: In the end, whatever comes out of the bankruptcy court has to be approved by the Public Utility Commission. And I think that that's a strong backstop for us in terms of protecting the workers.

LAGOS: But clearly, someone will lose out. And if history's any indication, PG&E ratepayers will be among those hit hardest. The utility filed for bankruptcy 18 years ago during the state's electricity crisis. And customers are still paying higher rates related to that. And even if PG&E doesn't seek bankruptcy protection, rates will likely go up. In addition to those wildfire liabilities, the company is going to have to spend a lot of money to make sure its equipment doesn't keep starting fires. For NPR News, I'm Marisa Lagos in San Francisco. Transcript provided by NPR, Copyright NPR.