Monday, February 11, 2019




          It’s no secret that to many California consumers, this winter’s Chapter 11 bankruptcy filing by Pacific Gas & Electric Co. looks as phony as a $3 bill.

          That’s because bankruptcy filings are intended to protect companies and individuals whose financial survival is threatened. There is no evidence this state’s biggest utility is in such deep trouble right now.

          Yes, PG&E has other kinds of trouble. It was convicted of criminal negligence in the 2010 San Bruno natural gas pipeline explosion that killed eight persons. A federal judge supervising the company’s probation in that case accuses the company of “killing people.” It faces myriad lawsuits claiming it caused much of the damage done by the massive wildfires of the last two years.

          But with a reported $1.5 billion cash on hand, PG&E is not broke like most supplicants in bankruptcy court. It collects more than $1 billion every month from millions of gas and electric consumers. California authorities absolved the company of most blame for damage in the 2017 Tubbs fire, reducing its potential lawsuit liability by several billion dollars. Plus, PG&E has an assured $5 billion in outside financing to get it through any impending tough times. And so far, not a single 2017 or 2018 wildfire-related lawsuit has been settled or adjudicated, meaning PG&E’s supposedly massive liabilities right now are mere theoretical speculation.

          It’s ludicrous for any company to seek relief from all its other debt and possible release from many contracts just because it might, maybe, possibly lose some lawsuits.

          There’s also the big utility’s past bankruptcy history: during the energy crunch in the first years of this century, PG&E suddenly declared itself insolvent, then emerged as a stronger company without divesting anything but debts, stiffing some creditors. Rates to consumers rose steeply, while executives cleared more than $80 million in bonuses for their actions during that bankruptcy.

          All this explains why today’s PG&E bankruptcy filing drew criticism the moment it was announced.

          PG&E, of course, claims it is blameless. Never mind that no executive has ever been punished for the San Bruno disaster. Never mind that the corporate board of directors has not suffered for any of this. Never mind that PG&E customers paid many billions of dollars for gas and electric line repairs and maintenance over more than 65 years before San Bruno, with the company and its regulators at the state Public Utilities Commission unable or unwilling to say where much of the money went.

          The bottom line here is that there is no bottom line. No one knows how much PG&E might eventually pay in wildfire lawsuit settlements, even though the company says its liabilities might top $30 billion.

          The Tubbs Fire ruling, however, means many lawsuits might not get far. At this point, while PG&E lines are suspected of sparking the ultra-disastrous Camp Fire in Butte County, which destroyed most of the town of Paradise and much more, there is so far no official finding of blame.

          So why should PG&E be allowed to enter bankruptcy while it has cash on hand, more arriving daily and still more available, with no real idea how much it may owe in damages? Especially when the company listed far more in assets than liabilities in its filing, $71 billion in assets against $52 billion in actual and potential debt.

          This company is not broke, but would like to evade whatever its wildfire liabilities might turn out to be; bankruptcy will at least delay related lawsuits. PG&E also might want to ditch expensive electricity contracts signed during the energy crunch and later on under California’s renewable energy campaign. Some of those deals see PG&E import solar and wind energy to its service area from far away.

          Critics like Democratic state Sen. Bill Dodd of Napa say they’re “disappointed” by the bankruptcy, calling for “change at PG&E in both its leadership and corporate culture.”

          For sure, bankruptcy will harm shareholders who depend on PG&E stock dividends for income and wildfire victims who blame the company. Customers also could face higher rates.

          But phony or not, no one yet has even tried seriously to stop this bankruptcy and its far-reaching potential harm to Californians.

     Email Thomas Elias at His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, go to

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