If PG&E goes into bankruptcy, what does it mean for customers?
BAKERSFIELD, Calif. (KBAK/KBFX) – Pacific Gas and Electric Co. is having a rocky start to the new year, with stock prices sinking this week amid fears that wildfire liabilities could reach $30 billion.
Meanwhile, PG&E's credit rating has been slashed to junk status.
With bankruptcy speculation swirling, what does it all mean for the customer?
If PG&E opts to file for bankruptcy, it would be Chapter 11 bankruptcy, allowing the company to reorganize, or free up assets to reduce expenses.
The utility could sell off a portion of the company, or the court could rule to reduce its liabilities.
Garro Ellis, a financial adviser from Moneywise Wealth Management in Bakersfield, said, “They would survive through it, meaning they would still be around, versus just going solvent.”
Bankruptcy would have consequences far beyond shareholders, ultimately reaching the consumer in the form of higher rates.
Mindy Spatt, from The Utility Reform Network, said PG&E has a history of this behavior.
“When PG&E is profitable, which it mostly is, customers don’t share in those profits. Yet, when PG&E is liable and negligent, and criminal, apparently they want us to share in that,” she said via an online interview with Eyewitness News.
PG&E declined comment for this story.