Activists from the No PG&E Bailout coalition protest at the end of an emergency CPUC meeting on Jan. 28, 2019. Sheraz Sadiq/KQED
Activists from the No PG&E Bailout coalition protest at the end of an emergency CPUC meeting on Jan. 28, 2019. (Sheraz Sadiq/KQED)

PG&E Regulators OK Utility's Request to Borrow $6 Billion Amid Bankruptcy Crisis

PG&E Regulators OK Utility's Request to Borrow $6 Billion Amid Bankruptcy Crisis

Utility regulators unanimously approved a measure Monday afternoon allowing Pacific Gas and Electric to obtain up to $6.1 billion in loans and credit if the company files for bankruptcy.

Protesters yelled "shame!" as commissioners voted at the raucous meeting.

The utility is still solvent, according to its most recent filings with the U.S. Securities and Exchange Commission. What it doesn't have access to is credit. As the amount of money PG&E could owe wildfire victims has grown, PG&E's credit rating has plunged.

If the utility files for bankruptcy, one of the first things it will probably do is ask a bankruptcy judge to approve $5 billion in financing to allow the company to continue operations. The California Public Utilities Commission voted today to say that it approves of that financing.

Without “timely” bankruptcy financing, “this Commission faces a substantial risk that the public health and safety of California will be severely impaired,” wrote CPUC President Michael Picker in a filing proposing that the CPUC approve PG&E’s request.

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Someone will eventually have to pay the money back. Although a bankruptcy judge signs off on spending and operating decisions, because of state law he or she can't automatically pass on those costs to ratepayers.

Even with the vote, the CPUC still would have to approve how much of the debt ratepayers would have to pay for at a later time.

Activists from the No PG&E Bailout coalition protest at the end of an emergency CPUC meeting on Jan. 28, 2019.
Activists from the No PG&E Bailout coalition protest at the end of an emergency CPUC meeting on Jan. 28, 2019. (Sheraz Sadiq/KQED)

Critics say the vote was unnecessary in the first place, and did not need to occur before the utility files for bankruptcy.

"There are no facts on the record that show that this is an emergency," said former CPUC President Loretta Lynch.

"The PUC is acting in service of PG&E's self-created emergency to smooth the way for their bankruptcy filing, and even more grievously, to help them shelter their assets from the other creditors, like the victims and the workers, by giving first dibs on all of PG&E assets to Wall Street bankers."