Events in California can unfold in the most unexpected fashion.
Two years ago, the state suffered billions of dollars in damage and loss of life from multiple raging wildfires. Crumbling under the weight of liabilities from those fires, the northern California utility, PG&E, filed for relief in bankruptcy court in January of this year.
Now, as the utility prepares to release its reorganization plan in bankruptcy court, San Francisco has offered to buy some of the utility’s assets.
On September 6, San Francisco Mayor London N. Breed and City Attorney Dennis Herrera submitted an official letter to PG&E outlining an offer to purchase select transmission and distribution assets. Specifically, the city would pay the utility $2.5 billion for the portion of its grid that serves the city.
City officials are scheduled to meet with the CEO of PG&E at the end of the month, according to Utility Dive. Although the utility has indicated it is open to dialogue with the city, it does not appear to be interested in a sale of its assets. In its own statement, the utility said, “we do not believe municipalization is in the best interests of our customers and stakeholders.”
If events in California are often unexpected, they are also just as complicated. Only days after the city offered to buy PG&E’s assets, the utility filed its reorganization plan in bankruptcy court.
Submitted on September 9, the plan includes some electrifyingly large numbers. Payments of up to $8.4 billion will be made to wildfire victims. Additional payments up to $8.5 billion will be made to insurance companies. Settlement of claims up to $1 billion will be made to public agencies.
To pay these debts, PG&E will also seek equity financing of up to $14 billion.