SAN FRANCISCO — Pacific Gas & Electric attorneys on Wednesday assured a federal judge the utility will emerge from bankruptcy by its June deadline as an investor-owned company, even as Gov. Gavin Newsom vowed to follow through on his threat to have the state take over the nation’s largest utility.
The contradictory scenarios unfolded during a PG&E court hearing in San Francisco and an event in Sacramento, where the Democratic governor reiterated his staunch opposition to PG&E’s current plan for climbing out of a financial hole because of its liability for starting catastrophic wildfires in 2017 and 2018.
PG&E’s bankruptcy plan requires support from the governor and the state’s chief regulator, giving Newsom unusual leverage as the utility seeks to qualify for money from a wildfire insurance fund state lawmakers approved last summer.
“It has to be a completely reimagined, transformed company,” Newsom said during an event with the Public Policy Institute of California in Sacramento Wednesday. “Its culture has to change, its mindset has to change, its framework away from short-termism and situational thinking has to be replaced with a culture that focuses on you and me, not just shareholders.”
“If PG&E can’t do it, we’ll do it for them,” he said.
PG&E attorney Stephen Karotkin told U.S. Bankruptcy Judge Dennis Montali the company is in constructive talks with Newsom in an effort to win the governor’s backing. Signaling PG&E’s confidence, Karotkin laid out a timetable that would allow voting to begin in May on a complex plan that includes a $13.5 billion pool for wildfire victims.
But Newsom didn’t sound optimistic about reaching a resolution with PG&E’s current management. In addition to his demand that PG&E replace its entire 14-member board of directors, including current CEO Bill Johnson, he said other radical changes are required, including $40 to $50 billion in capital improvements to its outdated electrical grid.
Otherwise, he said he has “laid out in detailed terms” with legislative leaders the necessity of having a plan in place to turn the utility into a publicly owned nonprofit before the June 30 deadline.
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