PG&E’s Chapter 11 bankruptcy filing: Corporate executives again to get away with murder
On Monday, San Francisco-based utility Pacific Gas and Electric Company (PG&E) announced that it would file for Chapter 11 bankruptcy on January 29 amid mounting liabilities due its complicity in the wildfires that tore across California in 2017 and 2018, which killed dozens, displaced thousands of people, destroyed tens of thousands of homes and burned hundreds of thousands of acres of land.
PG&E is the largest power utility in the US by number of customers, supplying electricity and natural gas to 16 million customers in Northern and Central California, operating as a local monopoly. The company faces widespread litigation, including government investigation into the deadly wildfires that tore across the state of California over the past two years, lawsuits from victims and the possibility of over $30 billion in liabilities. The potential liabilities tower over the company’s total market value of $4.2 billion.
PG&E stock fell by 52 per cent after the announcement on Monday, and an additional 39.5 per cent on Tuesday, although some of the loss was later regained. The company missed a $21.6 million interest payment, which caused its $18 billion debt to fall on the bond market. On Monday, its stock was down over 80 per cent from late 2017.
The company fears that it will face “significant liability” in excess of its insurance coverage if its power lines and other equipment are found to have caused the massive Camp Fire, which burned the mountain community of Paradise to the ground in November and killed 85 people.
Chapter 11 bankruptcy will result in a freeze of the company’s debts and protection from creditors seizing its assets while the company works out a plan to compensate its creditors. It’s likely that, if the bankruptcy proceedings go through, the current company will emerge as a newly restructured holding company, shifting the burden of its debt and liability payments on to the working class—in the form of higher energy costs and corporate “restructuring” that will result in cuts to jobs, wages and benefits.
It is possible that the California state legislature, controlled by the Democratic Party, could help PG&E to avoid bankruptcy by allowing it to raise its already high utility rates. The average rate paid for the utility by customers in California is 16 cents per kilowatt hour, nearly twice as much as the rate paid by customers in neighboring Oregon and nearby Washington state, and significantly higher than the US average of 10 cents per kilowatt hour.
The California Public Utilities Commission, which regulates the company, began investigations in late December to determine whether the company should pursue “significant structural changes,” including becoming a state-owned utility or splitting up its businesses.
There is evidence that points directly to the corporation’s role in causing the wildfires that devastated so much of the northern half of the state over the past two years. At the outset of the November 2018 Camp Fire—which became the deadliest in the state’s history—firefighters responded to a fire sparked by downed power lines 10 miles outside of Paradise at Poe Dam, owned by PG&E.
Sixteen wildfires which swept across the state in 2017, killing an official total of 44, were found to have been sparked by PG&E’s equipment, for which the company faces $17.3 billion in liabilities. PG&E was found by investigators to have violated safety regulations in 11 of those incidents.
These so-called natural disasters were anything but natural. They were the result of cuts to maintenance, safety and labor costs by the company in order for top executives to extract large payouts and serve the profit demands of their major shareholders, including BlackRock and Vanguard, two of the three most powerful investment firms in the world, along with State Street.
PG&E announced on Sunday that its CEO Geisha Williams has resigned. She will leave with a $2.5 million cash severance. Williams became CEO in March 2017, meaning that many of the most destructive wildfires in California’s history occurred under her direction.
Nick Stavropuolos, ex-president and chief operating officer, was eligible for $6.9 million in cash upon his retirement in September 2018. Stavropoulos oversaw the falsification of records related to PG&E’s gas pipeline system from 2012-2017. The discovery of the falsified records was a revelation, as it came two years after the 2010 San Bruno disaster, when a company gas line exploded, killing eight and destroying a neighborhood.
Former CEO Peter Darbee, who presided
over the San Bruno disaster, received a $34.8
million severance payout upon his departure,
and Anthony Earley, Williams’ direct
predecessor, was also involved in the record
falsification scandal and received $10.4
million in severance when he retired in 2017.
The Democratic Party, which controls the state legislature in California, has done nothing to stop the greedy executives of PG&E from profiting off of the disasters caused by its cost-cutting measures and negligence. It has done just the opposite. After the Camp Fire ravaged Paradise and the surrounding area, former Democratic Governor Jerry Brown toured the area with Republican President Donald Trump and Democratic Governor-elect (now current Governor) Gavin Newsom in an attempt at damage control, saying nothing to substantially condemn the corporation for the disaster.
Later, Brown applauded the pittance offered by the Trump administration as emergency aid to the victims of the disaster as “substantial funding” on CBS’s “Face the Nation.” Brown himself presided over massive cuts to social programs in California during his tenure as governor from 2011-2018.
While the Camp Fire raged in November, two Republican and ten Democratic California legislators indulged on a trip to Maui with utilities executives, hosted by the Independent Voter Project, to discuss legislation that would protect utilities companies from the financial burden from fines incurred for their responsibility in wildfires. The legislation would allow utility companies to raise rates to offset the costs of wildfire fallout, and although PG&E executives were not present, the legislation would serve its profit interests. According to the nonprofit Consumer Watchdog group, the twelve lawmakers received a total of over $630,000 in campaign donations from utility companies.
The International Brotherhood of Electrical Workers (IBEW), the trade union which represents workers at PG&E, has said nothing to condemn the recklessness of PG&E’s top executives and the devastating outcome for the working class in California. Like other trade unions, it has sought to keep the struggle of the working class behind the dead-end politics of the Democratic Party and tied to the profit system, which exploits workers and the earth for profit.
In fact, the IBEW Local 1245 boasted that it helped to write the language of California legislation last summer that required a utility to give 15 days’ notice before filing for bankruptcy, stating that it is a protection for workers. In reality, it is nothing but a protection for the company, as it allows the company two weeks to obtain aid from the state and its shareholders in figuring out ways to raise rates or restructure, which are measures that ultimately are aimed at attacking the working class and forcing them to pay for the crimes of the corporate elite.
Whether PG&E is rescued by the state, splits
itself up or files for bankruptcy, the corporate
parasites at the top will once again get away
with murder unless the working class
intervenes with its own program to take
control of the utility corporation and transform
it into a publicly-owned enterprise.
Workers who live in the areas served by PG&E and understand the risks to their lives of corporate negligence would not allow for such devastation to occur so that a few people could bask in unfathomable wealth. But that is precisely what occurs when the capitalist class has control over the means of production; basic necessities such as gas and electricity are a source of profit, not regarded as a social need. The safety of hundreds of thousands of people is put at risk without a second thought.
In order for workers to put forth their own program to establish democratic control over the energy companies, they must join hands with workers coming into struggle across the world, including 33,000 Los Angeles public school teachers on strike, 70,000 factory workers at the US-Mexico border who organized wildcat strikes, Yellow Vest protesters in France, and 30,000 oilworkers across the US, whose contracts are set to expire on February 1.
Workers in all industries are intricately linked by the complex system of capitalist production. Virtually all sections of workers rely on the energy industry in some way, and vice versa. But in order to link their struggles together, energy workers must cast off the bankrupt politics of the Democratic and Republican parties and their servants in the trade unions. These organizations will never represent the working class. They allow the working class to suffer disasters like the Camp Fire while they turn a blind eye to corporate recklessness.
Energy workers cannot fight the capitalist class without the help of other workers in a unified struggle to end the profit system of rule and replace it with socialism, a system in which workers have democratic control over the major industries, and in which the means of production are used to meet social need, not private profit.
PACIFIC GAS & ELEXTRIC, SEN. DIANNE FEINSTEIN’S BIGGEST BRIBSTERS,
HAS ALWAYS BEEN A CRIME TIDAL WAVE AND HAVE COST NORTHERN CALIFORNIANS MUCH
MORE THAN $30 BILLION!!!
"PG&E
is the subject of enormous litigation and liabilities estimated which
could reach as high as $30 billion,
analysts who studied the 2018 California wildfires say."
WATCH THE DEMS PROTECT THE CRIMINAL MGMT OF PG&E LIKE THEY DO THEIR CRONY BANKSTERS!
"PG&E is the subject of enormous litigation and liabilities estimated which could reach as high as $30 billion, analysts who studied the 2018 California wildfires say."
STEALING AMERICA!
Here’s how California surrendered to Mexico… OR WAS HANDED TO MEXICO BY NANCY PELOSI, DIANNE FEINSTEIN, KAMALA HARRIS, JERRY BROWN and GAVIN NEWSOM!
http://mexicanoccupation.blogspot.com/2018/08/california-under-mex-occupation-do-not.html
WHY DID THE FIRST LADY OF CORRUPTION and AMERICA’S
GREATEST WAR PROFITEER SENATOR DIANNE FEINSTEIN and her cronies PACIFIC GAS & ELECTRIC BURN DOWN MEXIFORNIA?
CALIFORNIA BURNS …. Again!
The Mexican welfare state under the weight of corruption and staggering cost of the LA RAZA welfare state on their legals’ backs!
"In fact, the destruction has again exposed the criminal indifference and negligence of the ruling class and both its political parties, Democrat and Republican. Social infrastructure, including fire departments, have been starved of funds for decades as trillions of dollars have been funneled into the bank accounts of the rich."
DIANNE FEINSTEIN’S FIRES:
This is what crony capitalism gives you!
"In fact, the destruction has again exposed the criminal indifference and negligence of the ruling class and both its political parties, Democrat and Republican. Social infrastructure, including fire departments, have been starved of funds for decades as trillions of dollars have been funneled into the bank accounts of the rich."
PG&E to File for Bankruptcy Amid Mounting Liabilities from CA Wildfires
1:52
PG&E Corp. announced Monday that it will begin filing for Chapter 11 bankruptcy at the end of January amid mounting liabilities from the past few years’ deadly California wildfires.
PG&E Corp. stated that it aimed to file to reorganize under chapter 11 on or around January 29. “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,” California’s largest utility company said in a statement.
PG&E said they do not expect the move to effect electric or natural gas service for its customers as a result of the proceedings.
Breitbart TV
The utility company’s stock prices plunged 55 percent in early trading.
PG&E is the subject of enormous litigation and liabilities estimated which could reach as high as $30 billion, analysts who studied the 2018 California wildfires say.
PG&E CEO Geisha Williams (pictured, inset) resigned from the company Sunday night and will be replaced by executive vice president and general counsel John Simon on an interim CEO as the board of directors searches for a replacement. “While we are making progress as a company in safety and other areas, the board recognizes the tremendous challenges PG&E continues to face,” PG&E Chairman Richard Kelly said Sunday. “Our search is focused on extensive operational and safety expertise, and the Board is committed to further change at PG&E.”
PG&E’s Stock Drops As It Announces It Will File For Bankruptcy This Month
Today, Pacific Gas and Electric announced it intends to file for bankruptcy. The company is required by California law to give its employees 15 days notice so the announcement today means the company can file by the end of the month. The company’s CEO announced she was stepping down yesterday. From CNBC:
Shares of the company dropped nearly 50 percent in early trading Monday, one day after the company said Chief Executive Geisha Williams was stepping down. The stock has lost more than 80 percent of its value over the last three months…The company, California’s largest investor-owned utility, has 16 million customers across a 70,000-square-mile service area in Northern and Central California. There was some speculation that PG&E was bluffing in order to force aid from California. CNBC’s David Faber said that sources told him that is not the case.
Last week there were reports that PG&E was considering an option dubbed “Project Falcon” which would have sold off the company’s gas assets in an attempt to cover its liabilities. But there were a couple of problems with that plan. For one thing, the gas business has also had serious safety issues which, according to some analysts, means the company was unlikely to get the $10-$15 billion it was looking for in a sale. Second, even if the company could get top dollar for the gas business, it still wouldn’t be nearly enough to cover their expected liability from the Camp Fire combined with still outstanding liability from 17 fires in 2017. From the San Francisco Chronicle:
Analysts estimate that PG&E could face as much as $30 billion in liability because of the 2017 Wine Country fires and the 2018 Camp Fire, which killed 86 people and destroyed the town of Paradise in Butte County. That figure includes civil claims filed by fire survivors and families alleging wrongful death, property damage and personal injury. PG&E’s wildfire insurance for the year that began Aug. 1, 2018, covers $1.4 billion.The California Department of Forestry and Fire Protection, or Cal Fire, has determined that PG&E equipment ignited 17 of the wildfires that tore through Northern California in 2017. Investigators forwarded 11 of those cases to local district attorney’s offices for possible criminal prosecutionThe cause of the worst 2017 wildfire — the Tubbs Fire, which killed 24 people and leveled neighborhoods in and around Santa Rosa — is still under investigation.
Responsibility for the Camp Fire hasn’t been officially placed on PG&E yet, but the company has already admitted it had a short in a high voltage line 15 minutes before the fire started in the same area where it started. It’s just a matter of time until investigators make it official.
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