CPUC votes to allow PG&E bankruptcy loans

SAN FRANCISCO -- At a noisy meeting punctuated by protests, the California Public Utilities Commission voted to allow PG&E to borrow up to $6 billion to pay for operations during its expected Chapter 11 bankruptcy.

PG&E has said it plans to file its bankruptcy protection petition in U.S. Bankruptcy Court "on or about" Tuesday to enable it to continue operating while resolving a potential liability of up to $30 billion for Northern California wildfires.

The Chapter 11 process enables a company to freeze its debts and continue functioning while developing a financial reorganization plan.

RELATED: Wildfire victims hold rally, urge lawmakers to keep PG&E out of bankruptcy

PG&E had asked the CPUC for approval to obtain $6 billion in bank loans during that process. The decision authored by Commission Chairman Michael Picker allows the utility to borrow up to $6 billion in DIP financing without further authorization.

Picker told the meeting audience, "Nothing in this decision allows PG&E to increase rates. It merely authorizes PG&E to borrow money to continue operations."

The measure was unanimously approved by the four current commission members at an emergency meeting announced Monday morning.

About two dozen speakers lined up during a public comment period to urge converting the shareholder-owned utility into a publicly-owned utility and to object to the last-minute scheduling of the meeting.

RELATED: Wildfire victims worry about PG&E's possible bankruptcy

"Why do we need a private company working as a public utility? If we're going to bail someone out, why don't we bail out the fire victims?" one speaker asked.

Another told the commission, "When you want a public process, you don't give notice of it at the last minute."

Some members of the audience chanted slogans such as "Wall Street bailout, we say 'no'" during some of the public comments and during Picker's remarks.

One speaker read the names of the 86 people killed in the Nov. 8 Butte County Camp Fire as audience members chanted each name in response. Cal Fire has not yet determined the cause of that fire.

San Francisco-based PG&E provides electricity and natural gas to 16 million customers in Northern and Central California.

If allowed to keep operating during the Chapter 11 bankruptcy, it would become what is known as a debtor in possession.

PG&E said in a statement, "The debtor-in-possession financing provides the funds needed to continue operating our business and to continue investing in our systems, infrastructure and wildfire mitigation initiatives throughout the Chapter 11 process.

RELATED: Here's how PG&E filing for bankruptcy will affect customers, employees, shareholders

"That process also supports the orderly, fair and expeditious resolution of its liabilities resulting from the 2017 and 2018 wildfires," PG&E said.

PG&E spokeswoman Andrea Menniti confirmed Monday evening, "We expect to file petitions to reorganize under Chapter 11 on or about January 29."

Both PG&E Co. and its parent holding company, PG&E Corp., are expected to file.

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ABC7 News contributed to this report.
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