SAN FRANCISCO–(BUSINESS WIRE)–PG&E Corporation said Monday it remains committed to providing safe natural gas and electric service to customers as it prepares to initiate voluntary reorganization proceedings under Chapter 11.
PG&E provided the 15-day advance notice required by recently enacted California law that it and its wholly owned subsidiary Pacific Gas and Electric company currently intend to file petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code on or about January 29.
During this process, the company is also committed to continuing to make investments in system safety as it works with regulators, policymakers and other key stakeholders to consider a range of alternatives to provide for the safe delivery of natural gas and electric service for the long-term in an environment that continues to be challenged by climate change. PG&E expects that the Chapter 11 process will, among other things, support the orderly, fair and expeditious resolution of its potential liabilities resulting from the 2017 and 2018 Northern California wildfires, and will assure the company has access to the capital and resources it needs to continue to provide safe service to customers.
The company said it does not expect any impact to electric or natural gas service for its customers as a result of the Chapter 11 process. PG&E remains committed to assisting the communities affected by wildfires in Northern California, and its restoration and rebuilding efforts will continue. The company also expects that its employees will continue to receive their pay and healthcare benefits as usual.
“The people affected by the devastating Northern California wildfires are our customers, our neighbors and our friends, and we understand the profound impact the fires have had on our communities and the need for PG&E to continue enhancing our wildfire mitigation efforts,” said John Simon, interim CEO, PG&E Corporation. “We remain committed to helping them through the recovery and rebuilding process. We believe a court-supervised process under Chapter 11 will best enable PG&E to resolve its potential liabilities in an orderly, fair and expeditious fashion. We expect this process also will enable PG&E to access the capital and resources we need to continue providing our customers with safe service and investing in our systems and infrastructure.”
“Following a comprehensive review with the assistance of our outside advisors, the PG&E Board and management team have determined that initiating a Chapter 11 reorganization for both the Utility and PG&E Corporation represents the only viable option to address the company’s responsibilities to its stakeholders,” said Richard Kelly, chair of the Board of Directors of PG&E Corporation.
PG&E’s goal will be to work collaboratively to fairly balance the interests of their many constituents—including wildfire victims, customers, employees, creditors, shareholders, the financial community and business partners—while creating a sustainable foundation for the delivery of safe service to their customers in the years ahead. The Chapter 11 process allows the company to work with their many constituents in one court-supervised forum to comprehensively address their potential liabilities and to implement appropriate changes.
The company expects that the Chapter 11 process will enable continued safe delivery of natural gas and electric service to PG&E’s millions of customers.
PG&E has engaged in discussions with potential lenders with respect to Debtor-in-Possession financing. PG&E expects to have approximately $5.5 billion of committed DIP financing at the time it files for relief under Chapter 11 on or about January 29, 2019, and has received highly confident letters from a number of major banks. The DIP financing will provide PG&E with sufficient liquidity to fund the company’s ongoing operations, including its ability to provide safe service to customers.