Ripple effects of PG&E bankruptcy filing could stretch far

FRESNO, Calif. (KFSN) -- Faced with billions of dollars in potential liabilities from a series of deadly wildfires -- PG&E has been forced to file for bankruptcy protection for the second time in the last two decades.

It's a move that gives the utility time to re-organize its debt but could drive up rates for customers in the long-run.

"I think that PG&E the largest provider of electricity from Central California northward is in bankruptcy spells a real problem I think for our grid going forward," said local Assemblyman Jim Patterson, (R) Fresno.

Patterson is the vice-chair for the Assembly Utility and Energy Committee and says the ripple effects are likely to stretch far beyond California and its residents.

WATCH: PG&E officially files for Chapter 11 bankruptcy

"The general way California has for a long time provided electricity that is reliable at your finger tips and affordable that may be a thing of the past unless we recognize the mistakes and failures of policy that have made this worse," Patterson said.

Recent wildfires, including November's Camp Fire killed at least 86 people and destroyed 15,000 homes in the Butte County town of Paradise.

The cause of the fire is under investigation but many pointed the finger at PG&E after it reported power line issues in the area at the time the fire broke out.

"It maybe that those victims will only get 10 cents on the dollar. That's part of the figuring out what can be done so they get something without putting PG&E out of business," said Fresno bankruptcy attorney Tim Springer.

Springer said Chapter 11 protection could take years to resolve and result in higher PG&E bills for customers.

"There is an argument that maybe they'll have to go up on their rates just to cover the cost that is going to come their way from this, that may be part of the re-organization plan," he said.

Despite the filing, PG&E officials say electricity and natural gas service will continue uninterrupted for its 16 million customers in Northern and Central California.

It's interim CEO released this statement:

We also intend to work together with our customers, employees and other stakeholders to create a more sustainable foundation for delivery of safe, reliable and affordable service in the years ahead.

PG&E has lined up $5.5 billion from several banks to fund its operations during what's expected to be a two-year process.
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