PG&E Could Get Bankruptcy ‘Stress Test’ in Wildfire Legislation - ABI

Facing wildfire lawsuits that could cost it $17 billion, Pacific Gas and Electric Co. may soon be given a bankruptcy stress test by California regulators to determine just how big a financial blow the utility can survive, the San Francisco Chronicle reported. The test is a piece of draft legislation approved by a conference committee on Tuesday in Sacramento that would let utility companies pass on to their customers costs arising from wildfires sparked by power lines, provided the companies acted reasonably in maintaining their equipment. If they didn’t act reasonably, the companies and their shareholders would have to swallow the costs. But the draft, which was publicly released on Tuesday afternoon with just four days left in the legislative session, contains a big exception. Before forcing a utility to cover the costs of settling wildfire suits, regulators at the California Public Utilities Commission would first have to decide how much the company could afford to pay before “materially impacting its ability to provide adequate and safe service.” Anything above that amount would be passed on to customers.

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