PG&E Says It's 'Probable' Its Equipment Caused Camp Fire
SCOTT SIMON, HOST:
This week brought key developments watched closely by survivors of California's recent wildfires. The worst of them, November's Camp Fire, left 85 people dead and destroyed 14,000 homes in and around the town of Paradise. Now the state's largest and now bankrupt utility has come forward with a staggering admission. From member station KQED, Lily Jamali has more.
LILY JAMALI, BYLINE: Pacific Gas and Electric acknowledged this week it's probable that its equipment caused the deadliest and most destructive blaze in California history. That means the utility will likely be on the hook for billions of dollars in liabilities associated with the Camp Fire. For survivors, it's a rare piece of welcome news. Attorney Russ Reiner represents 800 Camp Fire victims suing PG&E.
RUSS REINER: I think that it is a significant development and the fact that they have admitted it this early on is, in my opinion, a major step forward. This helps bolster our case.
JAMALI: Reiner says the admission could speed up the timeline for Camp Fire victims desperate to see their payouts. But because PG&E declared bankruptcy back in January, a move that helped shield it from some of those liabilities, survivors' rewards could be smaller than they might have been. Still, the utility isn't going away.
EVE KARASIK: So unlike other companies in Chapter 11 that can shut down and stop selling their product and liquidate, that can't happen here.
JAMALI: That's Eve Karasik, a bankruptcy attorney who represents a creditor in the case. Because it's a monopoly, she says, most of PG&E's 16 million customers don't have an alternative source of electric and gas service.
KARASIK: So here, you have to have a restructuring. You cannot just shut down the utility.
JAMALI: Which is why even though it's in Chapter 11, some investors see value in PG&E despite the fact the utility has already put $14 billion in liabilities on its books. So-Called vulture investors have already been circling, trying to buy claims off of those PG&E owes money to.
KARASIK: This activity is unusual so early in a case.
JAMALI: PG&E's pattern of safety problems from fires to a deadly pipeline explosion in 2010 have prompted politicians and investors to call for the utility to clean house. Friday, shares spiked after a major shareholder, the hedge fund BlueMountain Capital Management, announced its picks to replace the entire board. On the list - Phil Angelides who chaired a commission formed by Congress to study causes of the 2008 financial meltdown.
PHIL ANGELIDES: After all the significant issues that the company has faced, PG&E needs a fresh start. It needs new management. It's time to change the boardroom leadership.
JAMALI: PG&E had already vowed that half of its directors would be replaced by its annual shareholders meeting in May - a commitment it reiterated again on Friday. For NPR News, I'm Lily Jamali in San Francisco. Transcript provided by NPR, Copyright NPR.