Lawmakers Say No PG&E Bailout for 2018 Wildfires

In September, then-Gov. Jerry Brown signed a package of bills aimed at keeping Pacific Gas and Electric and other utilities solvent as they combated possibly billions of dollars in liability from wildfire lawsuits.

The controversial law, SB 901, allowed utilities to issue bonds to help pay for their wildfire liability costs, enabling those costs to be passed on to ratepayers, among other things.

But now that PG&E says it is filing for bankruptcy protection, the state’s top two assemblymen overseeing utilities tell KQED News that the plan to extend that law to 2018 is off the table.

The law allowed PG&E to issue bonds -- which will be repaid by ratepayers -- to cover any costs associated with the 2017 fires.

However, SB 901 didn’t include fires taking place in 2018, a gap that Assemblyman Chris Holden, D-Pasadena, who chairs the Assembly Committee on Utilities and Energy, had expressed interest in closing in early December, at the start of the legislative session.

“We were considering it. We were looking at accountability measures to go along with it,” Holden told KQED’s The California Report exclusively on Wednesday. “And PG&E then decided that they would get a more favorable outcome through the [bankruptcy] courts than through the Legislature. I assume that was their calculus.”

PG&E announced on Jan. 14 that it plans to file for Chapter 11 protections around Jan. 29, citing more than $30 billion in potential liabilities from a series of devastating wildfires that the company is suspected of starting.

“There's not a lot that the Legislature can do to address that level of financial stress that they find themselves under,” Holden said.

Holden’s Republican counterpart on the utilities committee, Assemblyman Jim Patterson, R-Fresno, who serves as its vice chair, said sentiment played a role.

“I just don't think that there is an appetite here for writing billions of dollars of taxpayer money in some effort to keep PG&E from bankruptcy,” Patterson told KQED’s The California Report.

BlueMountain Capital Management, a New York hedge fund that holds more than 2 percent of PG&E shares, issued a letter to fellow shareholders Thursday saying it intends to nominate a full slate of new directors to replace the current board.

“It is time for shareholders to step up,” BlueMountain Capital wrote in a letter filed with the U.S. Securities and Exchange Commission.

Shareholders can weigh in during an election at the company’s annual meeting on May 21.