The California Energy Utility That May Have Sparked the Deadly Camp Fire Has Filed for Bankruptcy

REDDING, CA - JULY 27:  An orange glow from the Carr Fire lights up burnt trees as the fire burns through dry brush on July 27, 2018 in Redding, California. A firefighter was killed battling the fast moving Carr Fire which has burned over 28,000 acres and destroyed dozens of homes. The fire is reportedly only 6 percent contained.  (Photo by Justin Sullivan/Getty Images)
An orange glow from the Carr Fire lights up burnt trees as the fire burns through dry brush in Redding, California. Justin Sullivan/Getty Images

On Monday evening, the board of directors of Pacific Gas and Electric, the investor-owned energy utility that serves 16 million people throughout Northern California, voted to file for  bankruptcy. PG&E is the largest utility in the country. Over the past two years, the energy supplier has been found responsible for at least 18 major wildfires that have burned across the state. That was before the Camp Fire—the deadliest and most destructive fire in California history that consumed roughly 200 square miles of land and killed at least 86 people in November. So far, much of the evidence that’s emerged in the ongoing investigation points to PG&E’s equipment as at least one culprit. (One of the others, climate change, can’t file for bankruptcy.) The utility may face charges of homicide, according to a deputy state attorney general.

All of the destruction comes with a heavy price tag—PG&E says it has over $50 billion in liabilities, according to the bankruptcy filing. PG&E contends it’s unable to meet that obligation, which is why the company is filing for Chapter 11 bankruptcy protection. In doing so, PG&E will be able to freeze its debts and continue to offer service as the company reorganizes under the direction of a bankruptcy court. The problem, however, is that the bankruptcy court will prioritize the interest of the creditors who are owed money and not the fire victims, tens of thousands of whom were displaced, or the customers who pay a monthly bill to the California energy giant.

Consumer advocates and politicians have derided PG&E’s move to file for bankruptcy, claiming the investors who own PG&E are attempting pass the burden of their debt and failure to maintain equipment onto customers. And for wildfire victims, many of whom lost loved ones and homes, the bankruptcy filing means that hopes they had of restitution via class action lawsuits will be put on hold as the court reorganizes the company’s debt and consolidates the lawsuits levied against it. PG&E said earlier this month that it faced about 50 lawsuits from at least 2,000 plaintiffs from the November Camp Fire alone—and that’s on top of about 700 lawsuits from at least 3,600 plaintiffs relating to fires sparked in 2017. Filing for bankruptcy could also push some of PG&E’s mountainous liability to its customers, though any rate increase would have to be approved by the California Public Utilities Commission, the state regulatory agency that oversees PG&E.

At the end of January, the Red Cross and officials from Butte County said they plan to close the last official evacuation shelter still operating  after the Camp Fire, at the Silver Dollar Fair Ground in Chico, California, potentially leaving 600 of the most desperate residents of the area, who were living in either provisional dormitories or in tents and cars in the parking lot, with nowhere to go.