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PG&E Files for Reorganization Under Chapter 11
PG&E Corporation, the owner of California’s largest electric utility, filed for Chapter 11 bankruptcy protection Tuesday. The move was not surprising, due to an anticipated onslaught of legal claims stemming from wildfires in Northern California. Though the resolution process is expected to be lengthy and uncertain, energy experts predict it is likely to result in higher energy bills for customers, as well as lower payouts for wildfire victims.
PG&E Corporation Interim CEO John R. Simon said, “Throughout this process, we are fully committed to enhancing our wildfire safety efforts, as well as helping restoration and rebuilding efforts across the communities impacted by the devastating Northern California wildfires.” He added, “To be clear, we have heard the calls for change, and we are determined to take action throughout this process to build the energy system our customers want and deserve.”
PG&E also is seeking court approval on $5.5 billion in debtor-in-possession (DIP) financing with J.P. Morgan, Bank of America, Barclays, Citi, BNP Paribas, Credit Suisse, Goldman Sachs, MUFG Union Bank and Wells Fargo acting as joint lead arrangers.
The bankruptcy could keep PG&E from making large-scale investments in solar and wind farms or other clean energy technologies, hurting California’s ability to meet climate change goals. It could also result in canceled contracts with developers of solar and wind farms, and make it more difficult for future California projects to get financed.
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