By WSJ City
San Francisco offered $2.5bn to acquire PG&E's electrical lines serving the city, a first step toward separating from the troubled utility that is facing billions of dollars in liabilities for starting a series of deadly wildfires.
--- The plan is a significant escalation in bid to create a municipal utility owned and operated by the city.
--- It comes a day before PG&E is expected to unveil its plan to leave chapter 11 bankruptcy protection.
--- PG&E said it is open to **considering the offer. **
--- City leaders are scheduled to meet with Chief Executive Bill Johnson on Sept. 26 to discuss the proposal.
--- The bid would be subject to approval by federal regulators as well as the California Public Utilities Commission.
--- Possibilities include splitting PG&E's gas and electric divisions into separate companies.
"PG&E has been a part of San Francisco since the company's founding more than a century ago, and while we don't believe municipalisation is in the best interests of our customers and stakeholders, we are committed to working with the City and will remain open to communication on this issue."
Why This Matters
If PG&E accepts the offer, it would lose hundreds of miles of wires and hundreds of thousands of customers in a symbolically important corner of its service territory. San Francisco's move to break from PG&E is a public vote of no confidence in the company, which has struggled to prevent its equipment from igniting fires amid a sharp increase in wildfire risk in Northern California. It is is now looking for ways to pay mounting liability costs.
The removal of San Francisco from PG&E's service territory would likely affect rates and service for those in rural and suburban areas outside of the city.
A fuller story is available on WSJ.com
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