SAN FRANCISCO (KRON) - PG&E has announced plans to file for Chapter 11 bankruptcy.
This comes a day after the CEO resigned, as the utility company faces a financial crisis.
Geisha Williams became the first Latina CEO of a Fortune 500 company and has been in that role since March 2017.
State regulators have recently called for management changes within PG&E.
Now an interim chief executive will take over.
John Simon has been serving as the executive Vice President and has been with PG&E since 2007.
PG&E released a statement from Simon saying, "While the board conducts its CEO search, our priority will be keeping the company focused on further improving safety while continuing to provide reliable service to our customers."
PG&E says its decision to file for bankruptcy will not affect your gas or electric service.
Also, its workers will still get paid and receive medical benefits.
As for any rate increases, the company did not touch upon that issue.
Right now PG&E is in discussions with lenders about trying to get permission to finance a package worth up to $5 billion.
This would allow PG&E to continue to operate while going through bankruptcy proceedings.
PG&E faces several lawsuits from the Tubbs and Camp Fires.
"It is a bad day for fire victims, they are being victimzied twice, the first time when PG&E burnt their homes down and now because instead of investing in their recovery, they are investing in themselves," said Mike Danko.
Danko is an attorney for thousands of California wildfire victims -- he doesn't believe filing for bankruptcy is to help the fire victims.
"I think they are doing this now because they have spent millions to determine what is the best scenario for the share holders and they have found the best way for holding on to the most money and keeping it out of the hands of victims is bankruptcy," said Danko.
A watchdog group says bankruptcy may also lead to higher rates for customers.
"What we know about PG&E is whether they take the bankruptcy route or the bail out route -- in the end what they are trying to do is past the cost of negligence onto customers and they will do it or try to and we will try to stop them," said Mindy Spatt, a representative with The Utility Reform Network.
Gov. Gavin Newsom issued the following statement early Monday in response to PG&E's intention to file for bankruptcy:
"PG&E provides gas and electric service to 16 million Californians. From the moment I was elected, I have been closely monitoring the impact of PG&E’s existing and potential future liability for the deadly wildfires on the victims of the fires and the consumers who rely on PG&E for their electric and gas service.
"When I took office one week ago today, I immediately instructed my team to meet with the California Public Utilities Commission, CAISO, PG&E, and labor unions representing the workers who work for PG&E. My staff and I have been in constant contact throughout the week and over the weekend with these stakeholders and regulators. Everyone’s immediate focus is, rightfully, on ensuring Californians have continuous, reliable and safe electric and gas service.
"While PG&E announced its intent to file bankruptcy today, the company should continue to honor promises made to energy suppliers and to our community. Throughout the months ahead, I will be working with the Legislature and all stakeholders on a solution that ensures consumers have access to safe, affordable and reliable service, fire victims are treated fairly, and California can continue to make progress toward our climate goals."
Meanwhile Mayor London Breed issued a statement assuring San Francisco residents that "PG&E's bankruptcy declaration will not impact their power service." Full statement:
“I want to assure San Francisco residents that PG&E’s bankruptcy declaration will not impact their power service. People will still have complete access to power in their homes, their businesses, and throughout our City. San Francisco’s public power program CleanPowerSF will continue to operate, and San Francisco will continue to invest in our ability to deliver clean power for our residents. I have directed the San Francisco Public Utilities Commission to study any near and long-term impacts this bankruptcy will have on our city and to identify any and all options we have to ensure that everyone in San Francisco has access to clean, safe, and reliable power.”
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