PG&E’s bankruptcy won’t end problems from fires
LOS ANGELES — Big corporations forced into bankruptcy by liability lawsuits often take the offending product off the market and try to move on. That’s what happened with the Dalkon Shield birth control device, asbestos and silicone breast implants.
But when the nation’s biggest utility, Pacific Gas & Electric, comes out of bankruptcy, it will face the same danger that put it in financial peril — wildfires.
As the case makes its way through the courts, the industry and the public will be watching closely to see what steps PG&E takes to control its legal exposure to future blazes in an era in which climate change is likely to make such disasters more common.
Will PG&E invest more in preventive maintenance to keep power lines from starting fires, adopting more aggressive tree-trimming and brush-clearing practices? Will it shut off the power in certain areas when the fire risk is high?
“Where other companies have been able to say, ‘We’re going to deal with hazards we caused in the past through bankruptcy,’ PG&E somehow has to find a solution to the fact that California is going to have drought conditions for a very long time,” said Jared Ellias, a law professor at the University of California Hastings School of Law in San Francisco. “How do you solve the liability crisis that they face?”
PG&E is the nation’s first utility forced into bankruptcy by potentially massive legal bills from wildfires. It filed for Chapter 11 reorganization last week to deal with potentially tens of billions of dollars in claims over several devastating blazes in 2017 and 2018.
The company faced 750 lawsuits from fire victims and expected hundreds more, Stephen Karotkin, an attorney for PG&E, said at a court hearing Thursday.
One was the nation’s deadliest, most destructive wildfire in a century: the blaze in November that leveled the Northern California town of Paradise, killed at least 86 people and destroyed nearly 15,000 homes. The cause is still under investigation, though PG&E had reported problems with equipment near where the fire started.
PG&E was found responsible for 17 other fires that tore through Northern California since 2017.