Former TVA President Bill Johnson, who left America's largest government-owned utility in Tennessee last year to help lead the investor-owned Pacific Gas & Electric out of bankruptcy in California, could end up heading a public utility on the West Coast if California lawmakers go along with legislation proposed Monday.
A California lawmaker unveiled a plan Monday aimed at transforming the nation's largest electric utility into a publicly owned company. State Sen. Scott Wiener said the bill would involve a public takeover of Pacific Gas & Electric and its sprawling network of power lines that have been blamed for starting catastrophic wildfires that have killed dozens of people and caused billions of dollars in damage.
"PG&E is a failed utility with a track record of prioritizing profits over safety," Wiener said. "It's time for a new start."
PG&E filed for bankruptcy last year and is trying to settle claims with wildfire victims, insurers and government agencies totaling $25.5 billion. The company faces a state-imposed June 30 deadline to emerge from bankruptcy in order to participate in an insurance fund set up by the Legislature.
For its part, PG&E unveiled a plan to extricate itself from its $51.69 billion bankruptcy and said it could conclude its court case to reorganize its finances by a June 30 deadline imposed by the state government.
"The company will emerge from Chapter 11 as a reimagined utility with an enhanced safety structure, improved operations and a board and management team focused on providing the safe, reliable, and clean energy our customers expect and deserve," Johnson said in a statement Monday.
In response to the company announcement, shares of PG&E jumped by more than 13.5% in trading Monday on the New York Stock Exchange.
In recent weeks, the company has intentionally shut off power to millions of people during windstorms to prevent wildfires, creating massive blackouts that have disrupted residents, businesses and local governments.
PG&E's bankruptcy plan must be approved by Gov. Gavin Newsom and state regulators. But so far, Newsom has rejected the plan, saying it does not do enough to lessen the company's debt to pay for up to $50 billion in safety improvements to its equipment.
Last week, PG&E pledged to overhaul its board of directors to avoid a state takeover. Newsom's administration has not yet responded to that plan.
PG&E said it opposes Wiener's takeover bill.
"PG&E's facilities are not for sale," company spokesman James Noonan said. "Changing the structure of the company would not create a safer or cleaner operation."
The governor has threatened to take over PG&E if it doesn't make acceptable changes. Wiener's bill is the first glimpse of what a takeover could look like. Wiener's office said it has discussed the bill with the Newsom administration and he has not ruled it out.
The legislation would require the State Power Authority, comprised of people appointed by the governor, to buy all of PG&E's shares. Standard & Poor's values the company's assets at more than $85 billion.
Once that happens, the state would create the Northern California Energy Utility District, which would contract with a public benefit corporation to employ most PG&E. Such a publicly owned utility would surpass TVA as America's biggest government-owned utility.