Attorney Kathryn DavisPacific Gas & Electric (PG&E) has warned California lawmakers that it may need to file a bankruptcy if the company is found liable for the wildfires that ravaged parts of California in 2017.

How PG&E Were Held Responsible

On June 8, 2018, California’s fire management agency, Cal Fire, said that electric equipment owned by PG&E caused twelve wildfires around October 2017.  These wildfires were responsible for 18 deaths,  burned hundreds of square miles, and caused significant property damage.  Cal Fire says that PG&E violated a California law that governs vegetation management in eight of the wildfires that were responsible for killing nine people.  In a separate investigation last month, the company was found at fault for four wildfires.

PG&E said in a statement: “The loss of life, homes and businesses in these extraordinary wildfires is simply heartbreaking, and we remain focused on helping communities recover and rebuild.  We look forward to the opportunity to carefully review the Cal Fire reports to understand the agency’s perspectives. Based on the information we have so far, we continue to believe our overall programs met our state’s high standards.”

Assigning Liability to California

PG&E also stated that the state of California needs to address issues of insurance affordability and reform the state’s policies regarding wildfire liability. “California is one of the only states in the country where the courts have applied inverse condemnation liability to events associated with investor-owned utility equipment,” PG&E said. “This means PG&E could be liable for property damages and attorneys’ fees even if we followed established inspection and safety rules.”  PG&E told the U.S. Securities and Exchange Commission in a recent report that it will record a “significant liability” for losses related to ten of the fires.

This is not the first time PG&E has had financial trouble.  The company previously declared bankruptcy in 2001 following the 2000-2001 California electricity crisis.

If you have experienced a financial crisis of your own, please contact one of our Bond & Botes offices for help getting yourself into a better financial situation.

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