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California utility Pacific Gas and Electric (PG&E) filed for Chapter 11 bankruptcy on Jan. 29, as the company faces as much as $ 30 billion in potential liabilities for its role in a series of wildfires in the state. The filing was expected after the company notified its workers two weeks ago it was preparing a reorganization plan.
PG&E is working on a multibillion-dollar debtor-in-possession financing deal with several banks to provide the company funding to continue operations during its reorganization. The California Public Utilities Commission approved the company’s plans to tap up to $ 6 billion in financing to help it operate while under bankruptcy protection, and the company in a statement Tuesday said it will ask the bankruptcy court to approve $ 5.5 billion in financing.
John Simon, PGE’s interim CEO, said in a statement, “We are fully committed to enhancing our wildfire safety efforts, as well as helping restoration and rebuilding efforts across the communities impacted by the devastating Northern California wildfires.…
Homer City Generation, operator of a three-unit, 1,884-MW coal-fired generating station about 45 miles northeast of Pittsburgh, Pa., has initiated a voluntary, pre-packaged Chapter 11 case in the U.S. Bankruptcy Court for the District of Delaware.
The financial restructuring process is expected to eliminate more than $ 600 million in existing secured debt from Homer City’s balance sheet and provide for an orderly transition of ownership, according to the company. The plant expects to continue operating, and to meet its ordinary obligations, as the case proceeds.
Filing a pre-packaged Chapter 11 case means the company has already arranged the necessary approvals for its proposed plan of reorganization. By doing so, the company is able to expedite the process, while eliminating some of the uncertainty.
Homer City has been struggling due to depressed power market prices, resulting from the low cost of natural gas. Located virtually in the center of the Marcellus Formation, Homer City’s finances have been doomed by the abundance of natural gas, combined with higher environmental compliance costs.…