PG&E Corp. is considering seeking bankruptcy protection amid mounting insurance claims resulting from fatal wildfires in the past two years, Reuters reported Jan. 4, citing people familiar with the matter.
The San Francisco-based holding company of utility services provider Pacific Gas and Electric Co. has not yet determined whether to file for bankruptcy for parts or the whole of its business, and a bankruptcy filing may not occur, the news agency reported.
PG&E backed out of negotiations for debtor-in-possession financing, which may keep PG&E afloat while under court protection, Reuters said.
Sources told the news agency that the California utility company does not prefer dealing with its liabilities through a bankruptcy filing as PG&E could still receive financial aid through legislation that will allow it to pass on costs to customers.
PG&E's shares plunged 30% in after-hours trading in New York following reports that the company is preparing to file for bankruptcy protection.
The company filed for bankruptcy in 2001 during the California energy crisis after its debt piled up from buying electricity that it was not allowed to recover from customers. The company emerged from bankruptcy in 2004.
PG&E also is exploring the sale of its gas utility business, according to a Jan. 4 National Public Radio report.