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CEO exits as PG&E faces fire liabilities, bankruptcy preparations

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Chief Executive Geisha Williams has stepped down, the company said on Sunday, as pressure from potentially crushing liabilities linked to catastrophic wildfires have pushed the California utility owner to the financial brink and prompted it to make bankruptcy preparations.

Williams, who took the helm of the provider of electricity and natural gas to millions of customers in March 2017, will be replaced by General Counsel John Simon on an interim basis, the company said. She also resigned from the boards of both PG&E and its utility subsidiary, Pacific Gas and Electric Co.

“While we are making progress as a company in safety and other areas, the Board recognizes the tremendous challenges PG&E continues to face. We believe John is the right interim leader for the company,” PG&E Chairman Richard Kelly said in a statement. “Our search is focused on extensive operational and safety expertise, and the board is committed to further change at PG&E.”

PG&E is reeling from the November Camp fire that began in the California mountain community of Paradise and swept through the town, eventually killing at least 86 people in the deadliest and most destructive blaze in state history.

The company faces widespread litigation, government investigations and liabilities that could potentially reach $30 billion, according to analyst estimates, when accounting for the carnage and damage from last year’s fire and blazes in 2017.

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The company is under pressure from the California Public Utilities Commission to make operational changes. The power provider announced on Jan. 3 that it was reviewing its structural options and looking for new directors with safety experience.

The management shake-up comes as PG&E is in discussions with banks for a multibillion-dollar bankruptcy financing package to aid operations during bankruptcy proceedings and the company prepares to alert employees as soon as Monday to its preparations for a potential Chapter 11 court filing, people familiar with the matter said.

PG&E, which carries a hefty debt load of more than $18 billion, is expected to disclose soon a large financial charge related to liabilities resulting from the November blaze.

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The employee-notification plans are not yet finalized and a communication could come later, the sources said. State law requires PG&E to notify employees at least 15 days before any bankruptcy filing.

For PG&E, a bankruptcy filing would represent a last resort if the company is unable to get government relief that would allow it to pass on liabilities to customers, a maneuver enacted into law to help the company grapple with 2017 fires, the sources added. California lawmakers have not yet moved to pass legislation that would give PG&E similar flexibility for the 2018 blazes.

California Governor Gavin Newsom said last week he was having discussions with PG&E executives, and that he wanted a healthy utility investing in environmentally friendly strategies.

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“That’s in an ideal world,” he said. “That’s not the case today.”

PG&E said in November it could face “significant liability” in excess of its insurance coverage if its equipment was found to have caused the Camp fire in Northern California. Both Moody’s and S&P have cut PG&E’s credit rating deeper into junk territory, citing a challenging environment for the power provider related to the wildfires and the need for dramatic intervention from state officials.

Companies negotiate debtor-in-possession loans, often with existing lenders, when they are seriously considering bankruptcy protection so they can continue operations while working through court proceedings.

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PG&E’s bankruptcy financing, should it be needed, could total between $3 billion and $5 billion, although the exact figure remains in flux and could end up being higher, said people familiar with the discussions.

If it seeks bankruptcy protection, the new money could prove critical for PG&E, which spends roughly $6 billion annually.

Reporting by Liana B. Baker and Mike Spector in New York; Additional reporting by Jessica DiNapoli in New York and Rama Venkat in Bengaluru; Editing by Peter Cooney

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Our Standards:The Thomson Reuters Trust Principles.


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Trump supporter blames Democrats for being targeted by the president: ‘Why is that racist?’

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CNN interviewed a supporter of President Donald Trump in Eau Claire, Wisconsin who refused to acknowledge the racism in the president's "Go Back" attacks on four women of color in Congress.

The network interviewed Kerri Krumenauer of Wiersgalla Plumbing & Heating Company about Trump's attacks.

"How is it racist?" she asked.

"If you don't like this country, get out," she demanded. "Leave!"

She then showed how misinformed she was about the incident.

"He didn't use any names -- they stood up," she falsely claimed. In fact, Trump did use names and the targets did not stand up as they were not at his North Carolina campaign rally.

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2020 Election

Here’s how Trump hopes to recreate his 2016 presidential win — and how Democrats can send him packing

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Writing for CNN on Saturday, election forecaster Harry Enten explained how President Donald Trump's recent, racist behavior lies in his desire to recreate the same electoral conditions that gave him a victory in 2016 in the presidential election next year.

"The Trump strategy is pretty simple: 1. Drive up the unfavorable ratings of his Democratic rival as he did in 2016 in order to compensate for his own low ratings. 2. Bank on an electoral college/popular vote split as he did in 2016. 3. Use a campaign of racial resentment to drive up turnout even more among groups favorable toward the President," wrote Enten. As he noted, Democrats have excellent odds to flip back Michigan and Pennsylvania, but they will have to work harder to win back any of the other states Trump flipped from the 2012 Obama camp — in particular Wisconsin, which was the closest state after those two.

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American, Italian and Russian blast off for ISS

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US, Italian and Russian astronauts blasted into space Saturday, headed for the International Space Station, in a launch coinciding with the 50th anniversary of the Apollo 11 Moon landing.

Alexander Skvortsov of the Russian space agency Roscosmos, NASA's Andrew Morgan and Luca Parmitano of the European Space Agency set off on a six-hour journey to the orbiting science lab from the Baikonur Cosmodrome in Kazakhstan at 1628 GMT.

A NASA TV commentator hailed a "textbook launch" minutes after blastoff in "sweltering" weather in Baikonur, where daytime temperatures reached 43 degrees Celsius on Saturday.

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