PG&E prepares bankruptcy filing

Pacific Gas and Electric Corp., owner of the biggest U.S. power utility by customers, said on Monday it is preparing to file for Chapter 11 bankruptcy protection as soon as this month amid pressure from potentially crushing liabilities linked to California's catastrophic wildfires in 2017 and 2018.

PG&E, which provides electricity and natural gas to 16 million customers in northern and central California, faces widespread litigation, government investigations and liabilities that could potentially exceed $30 billion due to the fires, the company said.

The most recent fire last November killed at least 86 people in the deadliest and most destructive blaze in California history.

PG&E's CEO was replaced on Sunday by General Counsel John Simon on an interim basis.

San Francisco-based PG&E is working on lining up roughly $5.5 billion in so-called debtor-in-possession financing to help operations during bankruptcy proceedings.

The utility said the bankruptcy process will not affect electric or natural gas services for customers. Company advisers expect that it may take up to two years to emerge from bankruptcy.

In theory, California politicians could avert PG&E's bankruptcy with legislative action. Last year, the state approved a law helping utilities recoup costs from fires in 2017, but not blazes in 2018.

Both lawmakers and regulators may be constrained in how much more they can help PG&E, at least by allowing it to further raise electricity rates.