Pacific Gas and Electric Co. (PG&E) is reportedly hoping a new bill will allow the beleaguered utility company to borrow tax-free money from the state to help the company payout California wildfire lawsuits, according to the Los Angeles Times.

After its electrical equipment was found at fault for fires that cost lives and property last year, PG&E could be on the hook for $30 billion in damages.

Assemblyman Chad Mayes (R-Yucca Valley) wrote the bill. He suggests allowing the California Infrastructure and Economic Development Bank to issue tax-exempt bonds on behalf of PG&E, which would use the utility company’s future profits as collateral. Customers would not be responsible for paying off the bonds, but shareholders would bear that responsibility.

Some legislators do not want to give their constituents any reason to believe the state is helping PG&E out of a financial boondoggle.

Others have mentioned that by passing Mayes’ bill, PG&E shareholders would be protected from a proposal made by hedge fund company Elliott Management Corp., which is trying to gain control of PG&E.

Elliott Management just purchased Barnes & Noble in June of this year for $475 million. According to the company’s website, it manages $38.2 billion in assets.

Last year’s Camp Fire destroyed the town of Paradise and claimed the lives of 86 people. Assemblyman James Gallagher (R-Yuba City), whose district includes Paradise, said he does not believe the proposed bill is needed in order for victims to receive proper compensation.

California Gov. Gavin Newsom signed a law this year creating a maximum of $21 billion in a fund to help utility companies resolve claims relating to future fires. PG&E cannot use that money until it comes out of bankruptcy and settles current lawsuits and needs to do so by June 30, 2020.

California Wildfire Lawsuits Have PG&E Running for the Off Switch

As part of PG&E’s response to not being proactive in preventing wildfires, the San Francisco Chronicle reported that the utility company decided to start turning off power lines when weather conditions appear fruitful for wildfires. 

In mid-August, the California Senate’s Energy, Utilities and Communications Committee listened to concerns from residents and business owners that PG&E has too much of a say in determining when to shut down power and for how long.

If PG&E shuts off power in large areas, it could cause problems for businesses, first responders, disabled residents, and others. A loss of power at cell phone towers could cause significant delays in emergency services reaching people in outage areas.

Sen. Scott Wiener (D-San Francisco) expressed concern that because PG&E will want to avoid future financial liability, the utility company may shut down power unnecessarily.

Earlier this year, the California Public Utilities Commission signed off on new guidelines electric companies must follow when deciding to turn off power, which should only be done “as a measure of last resort.”

Still, many critics expressed dissatisfaction that PG&E is allowed to make 100 percent of the decision on whether to turn off power, which could place residents in a different type of danger as a result of the utility company’s fear of more California wildfire lawsuits.

This article is not legal advice. It is presented
for informational purposes only.