PG&E shouldn’t be allowed to stall and short-change victims in favor of stockholders

Victims first. Customers second. Then creditors and stockholders. That’s the order in which obligations should be met by the Pacific Gas & Electric Company.

The monopoly power and gas company is facing many billions of dollars in claims because their equipment was implicated in the start of many of the wildfires around the state this past couple years, including the Cascade Fire in the Yuba County foothills in 2017 and the Camp Fire in Butte County last year. The utility announced Monday its intent to file for bankruptcy protection in coming weeks.

Chapter 11 bankruptcy is a court-supervised proceeding that allows companies to reorganize finances and resolve liabilities while continuing to operate, according to a PG&E statement.

There of course will be an enormous stream of issues to work through. Who was liable and by how much and who is placed in what slot in the line-up of those wanting their money, for instance. PG&E has multiple obligations and as a private, for-profit company, it’s obliged to do right by its stockholders. Bankruptcy can help preserve wealth.

But victims should be at the front of the line and receive their compensation.

Other issues to work out? How liable should the company be in each of the cases – was it the company’s fault or was it an act of God?

We don’t mind seeing state authorities and legislators working to make it possible for PG&E to survive. But it needs to survive with the right priorities: upgrading systems to be as safe as possible; providing the relief it should be liable for when it comes to people who lost everything in the fires their equipment caused; service to the millions of customers it serves; and finally stockholders.

Assemblyman James Gallagher, Yuba City Republican, said the utility company shouldn’t be allowed to file bankruptcy in order to come out of the situation unscathed.

Gallagher is right on in his approach – the stockholders should not come first; consideration should be given into breaking up the behemoth that monopolizes the market.

“No Wall Street creditors should get paid until fire victims have been properly compensated,” he said in a story Tuesday.

Gallagher and state Sen. Jim Nielsen, Tehama Republican, are doing what they can to make the right impression on the minds of fellow legislators. Here’s hoping they make their mark.

Our View editorials represent the opinion of the Appeal-democrat and its editorial board and are edited by the publisher and/or editor. Members of the editorial board include: Publisher Glenn Stifflemire and Editor Steve Miller.