California’s largest power company, PG&E, announced Monday it is filing for Chapter 11 bankruptcy protection. The company faces an estimated $30 billion in liabilities for deadly wildfires that broke out in 2017 and 2018.
The company’s chief executive resigned on Sunday.
Senate Bill 1090 ensures PG&E will pay San Luis Obispo County $85 million to soften the blow of the Diablo Canyon Power Plant Closure. With a bankruptcy shake-up, the county is taking action to make sure that agreement is still honored.
“We have an attorney that we used for the California Public Utilities Commission hearings,” said Adam Hill, San Luis Obispo County Supervisor. “We will file as an intervener to protect our interests, make sure that money is protected for the community.”
Bankruptcy attorney Vaughn Taus says a trustee will likely be appointed who will be responsible to the court for operating PG&E for the benefit of the creditors and stakeholders.
“Their primary focus is going to be keeping the lights on and doing it understanding that there is a lot of money owed,” Taus said.
More than 1,500 people work at the power plant. Taus says union employees could be vulnerable.
“There’s a specific provision of the bankruptcy code that allows a trustee to reject union contracts,” Taus added.
When an individual files for bankruptcy, they receive what’s called a ‘discharge,’ which relieves them of prior debts. Taus says it’s not likely a big corporation like PG&E will see that same forgiveness. Instead, the debts will have to be ‘re-organized,’ but it’s unclear whether ratepayers will take on some of that burden.
