California State Senator Writes Bill to Take Over PG&E

California State Senator Writes Bill to Take Over PG&E - (Bloomberg - Feb 3)

California Governor Gavin Newsom has threatened a state takeover of PG&E Corp. if the bankrupt utility giant doesn’t shape up. Now he has a framework to do it.

State Senator Scott Wiener will introduce a bill as early as Monday that would kick off a process by which the state assumes control over PG&E by buying its stock, according to his staff.

The utility would be run by a municipal board -- enabling access to cheap tax-free financing -- but operated by a public benefit corporation, a private entity that would allow PG&E workers to avoid being subject to government employment rules. Municipal bonds paid back over time by ratepayers would finance the transaction.

“PG&E operates a monopoly as a privilege granted by the state of California, and that privilege can be revoked,” Wiener, a San Francisco Democrat, said in an interview. “I support public ownership of PG&E.”

In a statement, PG&E said it opposes the bill. “Changing the structure of the company would not create a safer or cleaner operation,” the utility said. “We remain focused on fairly resolving wildfire claims and exiting the Chapter 11 process as quickly as possible.”

PG&E shares rose 14% Monday in New York after the company outlined plans late Friday to overhaul its board of directors as part of a broad reorganization proposal aimed at winning state approval for its bankruptcy exit.