Pacific Gas & Electric announced Sunday evening that CEO Geisha Williams will step down amid the fallout from a spate of deadly wildfires that may have brought the California utility to the brink of bankruptcy.
John Simon, PG&E's executive vice president and general counsel, will serve as interim CEO as the board searches for a new leader.
"While we are making progress as a company in safety and other areas, the Board recognizes the tremendous challenges PG&E continues to face," said Board Chair Richard Kelly, in a statement.
Kelly said the board will look for a new CEO with extensive operational and safety expertise, and is committed to "further change at PG&E."
Bloomberg reported Saturday that the utility, facing billions of dollars in wildfire liabilities, could notify staff of a potential bankruptcy filing as soon as Monday, citing sources familiar with the situation. Reuters reported over the weekend that PG&E is in talks with investment banks about a multimillion-dollar bankruptcy financing package.
California state law requires PG&E to notify employees 15 days before a change of control takes place at the company. A notice does not necessarily mean that PG&E is filing for Chapter 11 protection, but signals that the utility may be considering bankruptcy as a way of coping with an estimated $30 billion in liabilities for fires that took place in 2017 and 2018.
The utility declined GTM's request for comment on reports of an impending bankruptcy filing, stating in an e-mail that it does not comment on "market rumors and speculation."
Earlier this month, NPR reported that PG&E has developed a plan, dubbed “Project Falcon,” to sell off its natural gas division as a way to fund the billions of dollars in potential claims from the California wildfires.
Days later, S&P slashed PG&E's credit rating from investment grade to “junk” status, citing regulatory and financial turmoil. PG&E shares tumbled in the wake of S&P's downgrade and continue to sit at a 15-year low.
PG&E has been found responsible for sparking at least 1,500 wildfires in recent years, according to the Wall Street Journal. The utility also faces exposure to liability for causing the 2017 Tubbs Fire, which killed 22 people, and last year's Camp Fire, which killed at least 88 people and caused an estimated $7.5 billion to $10 billion in damages. Both fires are still under investigation.
While the case is still open, PG&E has reported that one of its transmission lines malfunctioned at the time and place where the Camp Fire started. The utility released a report last fall outlining why it decided against de-energizing power lines that may have caused the spark.
California Governor Gavin Newsom said last week that his administration is in contact with PG&E and will be making an announcement related to the utility in the coming days, including new appointments to the California Public Utilities Commission.
