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Why Did Pg&e File For Bankruptcy

Serving Our Customers Safely

Embattled PG& E To File For Chapter 11 Bankruptcy

We continue to provide safe and reliable electric and natural gas service to our customers as normal.

PG& E crews and contractors continue to perform essential work to maintain gas and electric service, improve the safety of the system, further mitigate wildfire risks, and reduce Public Safety Power Shutoff impacts. The company takes steps to keep communities informed about this vital work.

More information about PG& E’s Community Wildfire Safety Program can be found at www.pge.com/wildfiresafety.

For the latest information about what the Chapter 11 Bankruptcy process means for customers, please read the frequently asked questions.

PG& E values our relationships with our suppliers. We know you may have questions about the Chapter 11 process. You can find the latest information in the frequently asked questions.

If you have additional questions, please reach out to your usual sourcing contact.

We appreciate the service that you provided during your tenure at PG& E. We know you may have questions about the Chapter 11 process. You can find the latest information in the frequently asked questions.

Case Information: Court filings and other documents related to the Chapter 11 process are available on a separate website administered by PG& E’s claims agent, Prime Clerk, at .

Restructuring Hotline: Information is also available by calling or , as well as by emailing .

Media: For media inquiries, please contact Media Relations at .

Pg& e And The Environment

Beginning in the mid-1970s, regulatory and political developments began to push utilities in California away from a traditional business model. In 1976, the California State Legislature amended the 1974 WarrenAlquist Act, which created and gives legal authority to the California Energy Commission, to effectively prohibit the construction of new nuclear power plants. The Environmental Defense Fund filed as an intervenor in PG& E’s 1978 General Rate Case , claiming that the company’s requests for rate increases were based on unrealistically high projections of load growth. Furthermore, EDF claimed that PG& E could more cost-effectively encourage industrial co-generation and energy efficiency than build more power plants. As a result of EDF’s involvement in PG& E’s rate cases, the company was eventually fined $50 million by the California Public Utilities Commission for failing to adequately implement energy efficiency programs.

In the early first decade of the 21st century, the CEO of PG& E Corporation, Peter Darbee, and then-CEO of Pacific Gas & Electric Company, Tom King, publicly announced their support for California Assembly Bill 32, a measure to cap statewide greenhouse gas emissions and a 25% reduction of emissions by 2020. The bill was signed into law by Governor Arnold Schwarzenegger on September 27, 2006.

In 2014, PG& E had a renewables mix of 28%. By 2016, 32.9% of PG& E’s power sources were renewable.

Further Consolidation And Expansion

Within a few years of its incorporation, PG& E made significant inroads into Northern California’s hydroelectric industry through purchase of existing water storage and conveyance facilities. These included many reservoirs, dams, ditches and flumes built by mining interests in the Sierras that were no longer commercially viable. By 1914, PG& E was the largest integrated utility system on the Pacific Coast. The company handled 26 percent of the electric and gas business in California. Its operations spanned 37,000 square miles across 30 counties.

The company expanded in the 1920s through strategic consolidation. Important acquisitions during this period included the California Telephone and Light Company, the Western States Gas and Electric Company and the Sierra and San Francisco Power Company, which provided hydropower to San Francisco’s streetcars.:277283 These three companies added valuable properties and power and water sources. By the end of 1927, PG& E had nearly one million customers and provided electricity to 300 Northern Californian communities.:277283

Natural gas

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Hoping To Protect ‘most Vulnerable’

“Our goal all along was to protect the most vulnerable, but now the bankruptcy court will be managing the future of PG& E and its creditors, including the damages of fire victims for which the utility is deemed responsible,” Holden said.

He pledged to keep working with lawmakers and the governor to protect victims, provide safe and affordable power for ratepayers and maintain the state’s aggressive renewable energy goals.

“We will help to provide direction to the Public Utilities Commission, who will be representing Californians interests in the bankruptcy proceeding,” he said.

But it’s not clear how much power lawmakers or regulators will have to do those things. While service to the 16 million people in PG& E’s territory will not be interrupted, the filing raises huge questions for ratepayers who could end up paying more, for the wildfire victims who have sued the utility and for the companys creditors and shareholders.

Even before the bankruptcy filing by the utility and parent company Pacific Gas and Electric Corp., PG& E started skipping some payments to fire victims who reached settlements with the company in a 2015 Butte County blaze.

Dodd argued that victims should not have to stay in line behind creditors as will likely happen in a bankruptcy court.

State Sen. Jerry Hill , who represents victims from the deadly San Bruno blast that PG& E gas equipment caused in 2010, said that the CPUC needs to ensure that the PG& E reorganization benefits consumers.

Pg& e: California Utility Firm Files For Bankruptcy After Deadly 2018 Wildfires

Why File for Bankruptcy?

Company is facing hundreds of lawsuits from victims of recent fires and tens of billions of dollars in potential liabilities

Faced with potentially ruinous lawsuits over Californias recent wildfires, Pacific Gas & Electric Corp filed for bankruptcy protection Tuesday, in a move that could lead to higher bills for customers of the nations biggest utility and reduce the size of any payouts to fire victims.

The Chapter 11 filing allows PG& E to continue operating while it puts its books in order. But it was seen as a possible glimpse of the financial toll that could lie ahead because of global warming, which scientists say is leading to fiercer, more destructive blazes and longer fire seasons.

The bankruptcy could also jeopardize Californias ambitious program to switch entirely to renewable energy sources.

PG& E cited hundreds of lawsuits from victims of fires in 2017 and 2018 and tens of billions of dollars in potential liabilities when it announced earlier this month that it planned to file for bankruptcy.

The bankruptcy filing immediately puts the wildfire lawsuits on hold and consolidates them in bankruptcy court, where legal experts say victims will probably receive less money.

Theyre going to have to take some sort of haircut on their claims, said Jared Ellias, a bankruptcy attorney who teaches at the University of California, Hastings College of the Law. We dont know yet what that will be.

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A Tactic Not A Necessity

Nettie Hoge, executive director of The Utility Reform Network in San Francisco, speculated that PG& E may be attempting to pressure the governor to come through with a more generous bailout package.

This is not a necessity, she said. Its just a tactic.

Trading in PG& Es stock was halted before yesterdays announcement. When trading resumed in the final hour of the session, PG& Es share price plunged almost 37 percent to close at $7.20.

Shares of Edison International, parent company of Southern California Edison Co., also tumbled on the news, shedding almost 35 percent to close at $8.25.

Nevertheless, Edison CEO John Bryson said he does not expect PG& Es bankruptcy to affect his utilitys parallel bailout negotiations with Sacramento.

We at Southern California Edison continue to believe that working out a comprehensive solution to our current crisis is a preferable course to take, he said. PG& Es decision does not change our position.

Edison tentatively has agreed to sell its power lines to the state for about $2.8 billion. Similar talks with PG& E have dragged on for months, with little if any progress.

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Pg& E: California Utility Firm Files For Bankruptcy After Deadly 2018 Wildfires

Company is facing hundreds of lawsuits from victims of recent fires and tens of billions of dollars in potential liabilities

Faced with potentially ruinous lawsuits over Californias recent wildfires, Pacific Gas & Electric Corp filed for bankruptcy protection Tuesday, in a move that could lead to higher bills for customers of the nations biggest utility and reduce the size of any payouts to fire victims.

The Chapter 11 filing allows PG& E to continue operating while it puts its books in order. But it was seen as a possible glimpse of the financial toll that could lie ahead because of global warming, which scientists say is leading to fiercer, more destructive blazes and longer fire seasons.

The bankruptcy could also jeopardize Californias ambitious program to switch entirely to renewable energy sources.

PG& E cited hundreds of lawsuits from victims of fires in 2017 and 2018 and tens of billions of dollars in potential liabilities when it announced earlier this month that it planned to file for bankruptcy.

The bankruptcy filing immediately puts the wildfire lawsuits on hold and consolidates them in bankruptcy court, where legal experts say victims will probably receive less money.

Theyre going to have to take some sort of haircut on their claims, said Jared Ellias, a bankruptcy attorney who teaches at the University of California, Hastings College of the Law. We dont know yet what that will be.

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Way To Keep ‘going Forward’

“The Chapter 11 filing provides a defined process to collect our past receivables and keep PG& E in business going forward,” North Carolina’s Duke Energy Corp. said in a statement.

The state already purchases power on PG& E’s behalf, and that will not change as a result of the utility filing for Chapter 11. The state has spent nearly $5 billion so far keeping California’s lights on.

“Chapter 11 is the next chapter in this sordid economic blackmail,” said Medea Benjamin of the San Francisco grassroots organizationGlobal Exchange. “PG& E will get out of this without paying their debts, and they’ll keep the parent company intact.”

Pg& e Bankruptcy Will Be An Expensive Process

PG& E Files For Chapter 11 Bankruptcy Protections

Is PG& E too big to fail? California’s increasing need for electricity certainly is. Assuming Pacific Gas and Electric files for bankruptcy on January 29, supplying customers electricity and natural gas will go on as usual. But, bankruptcy will complicate things mightily.

Frank Pitre’s Cotchett law firm, along with three others have more than 600 burned out homeowner clients in Wine Country and Paradise. “The general procedure is that they’re is a stay issue on all cases that are in the civil proceeding that are currently pending in the San Francisco Superior Court. It would then transfer all of those claims into Bankruptcy Court,” said Mr. Pitre.

That, says lawyer and former Dean of Golden Gate University Business School is a major problem for homeowners, “If your house is burned down because of the fire, you’re not a priority creditor. You’re an unsecured creditor.

Ben Young is a San Francisco bankruptcy attorney. “It’s expensive process. There’s delay for all parties. Fire victims are going to have to wait for their money. There’s uncertainty. There’s the cost of the legal process and lawyers,” said Mr. Young. “The filing of the bankruptcy in no way means that their claims are not going to be fairly compensated,” said plaintiff attorney Pitre.

“It’s going to depend on how big the pot is and a lot of other people are going to be asked to contribute to that pot,” said bankruptcy attorney Young..

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Resolute And Mourning Residents Of Fire

Legal experts said they still expected PG& E to move forward with bankruptcy in part because that would give the company space to formulate a plan to prevent its equipment from causing more catastrophic fires and reduce its future wildfire liability.

California may have to change an existing law that holds utilities entirely liable for damage caused by their equipment regardless of whether the company was negligent, said Kenneth Ayotte, who teaches corporate finance and bankruptcy law classes at the University of California, Berkeley School of Law.

PG& E would also be able to consolidate all wildfire lawsuits in bankruptcy court, where victims would have to tussle with creditors and would likely end up with less money.

Mondays CPUC meeting may have provided a glimpse of the acrimony that would accompany any bankruptcy filing. Protesters repeatedly denounced and spoke over members of the commission and booed and shouted, Shame, as it voted to allow PG& E to immediately obtain credit and loans as part of any Chapter 11 filing. PG& E has said it has lined up $5.5 billion in credit and loans so it could continue operating during bankruptcy.

The commission faced criticism after it gave short notice of the meeting. State law generally requires multiple days of notice for public meetings, but the CPUC cited an exception for emergency situations that affect public health or safety.

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Pg& e Bankruptcy: How We Got Here

State Sen. Bill Dodd , who took the lead last year in negotiating a state response to wildfires, agreed with Blue Mountain executives that the company needs new leadership.

Given its track record of obfuscation and mismanagement, Im not surprised PG& E claims it can no longer meet its financial obligations, Dodd said in a written statement.

PG& E stock plummeted after a series of 2017 wildfires that swept through Napa, Sonoma and Mendocino counties, as well as Lake, Butte, Solano and Yuba counties. The utility had been warning for a year that it could face bankruptcy if the state didnt give it some relief.

Lawmakers did agree to soften the blow of those 2017 fires by creating a process for the utility to issue ratepayer-backed bonds to pay for costs related to the fires. Less than two months after Gov. Jerry Brown signed that bill, SB 901, the Camp Fire broke out in Butte County on Nov. 8.

In less than a day, that blaze became the deadliest and most destructive in state history, killing 86 people and destroying nearly 14,000 homes.

Then, in early January, the companys bond rating was slashed to junk status, making it prohibitively expensive for PG& E to borrow capital. A week later, the company announced in a U.S. Securities and Exchange Commission filing that it intended to file for bankruptcy as early as Jan. 29.

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Pg& e The Nations Biggest Utility Company Files For Bankruptcy After California Wildfires

Pacific Gas & Electric Corp. filed for voluntary bankruptcy protection Tuesday as it braces for the impact of billions of dollars in liability claims for some of Californias deadliest wildfires.

The filing made PG& E a massive victim of climate change, unable to deal with years of drought that made dry forests kindling for damaged transmission lines. While other factors also pushed the company into bankruptcy, the utilitys fate served as a wake up call to other companies potentially vulnerable to climate change.

The biggest utility company in the country, PG& E was recently cleared of blame in the destructive Tubbs Fire, which blazed through Santa Rosa in fall 2017. But the company is still under scrutiny for its role in the Camp Fire, the worst wildfire in state history, which razed the small town of Paradise in November and killed 86 people.

Mired in lawsuits, PG& E now has more than $50 billion in liabilities, according to bankruptcy court filings. It listed its assets at a little more than $71 billion.

PG& Es bankruptcy announcement has garnered criticism from investors, government officials and the public, who fear that the companys actions will send utility rates skyrocketing and leave wildfire victims without an avenue for recompense. The bankruptcy filing immediately puts a halt to the wildfire lawsuits and consolidates them in bankruptcy court, where legal experts say victims are likely to receive less money.

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Bankruptcy cases involving big corporations usually produce hundreds of millions of dollars in fees for lawyers, bankers and consultants. BlueMountain Capital Management, which owns PG& E stock and opposes the companys bankruptcy, says PG& Es last bankruptcy, filed in 2001, cost more than $400 million in fees. The current case could cost a lot more because lawyers hourly rates have gone up a lot since then.

The 2014 bankruptcy filing of Energy Future Holdings, a Texas utility, yielded professional fees of more than $600 million, according to data collected by Texas Lawbook.

Still, some legal experts say that processing many claims in one court can save money. Its going to produce some pretty big efficiencies, said Lynn M. LoPucki, a law professor at the University of California, Los Angeles.

PG& E has also asked the bankruptcy court to approve roughly $130 million of 2018 bonus payments to employees, who stand to get $5,000 to $90,000 each. The $130 million figure does not include the bonuses for 12 senior PG& E executives. The company has not yet asked the court to approve payments to those executives, although it noted that senior officers are typically eligible to receive bonuses in bankruptcy.

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Sacramento Electric Gas And Railway Company

In 1906, PG& E purchased the Sacramento Electric, Gas and Railway Company and took control of its railway operations in and around Sacramento. The Sacramento City Street Railway began operating under the Pacific Gas & Electric name in 1915, and its track and services subsequently expanded. By 1931 the Sacramento Street Railway Division operated 75 streetcars on 47 miles of track. PG& E’s streetcars were powered by the company’s hydroelectric plant in Folsom. In 1943, PG& E sold the rail service to Pacific City Lines, which was later acquired by National City Lines. Several streetcar lines were soon converted to bus service, and the track was abandoned entirely in 1947.

During this same period, Pacific City Lines and its successor, National City Lines, with funding from General Motors, Firestone Tire, Standard Oil of California , Phillips Petroleum, and Mack Trucks, were buying streetcar lines and rapidly converting most of them to bus service. This consortium was convicted in 1949 of federal charges involving conspiracy to monopolize interstate commerce in the sale of buses and supplies to National City Lines and its subsidiaries. The actions became known as the Great American Streetcar Scandal or the General Motors Streetcar Conspiracy.

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