PG&E cited potential liabilities from two major wildfires totaling up to $30bn in its bankruptcy announcement on Monday

This article is more than 1 year old

This article is more than 1 year old

A PG&E executive who resigned one day before the California utility company announced it plans to file for bankruptcy is set to receive $2.5m in severance payment.

PG&E announced CEO Geisha William’s resignation on Sunday night, one day before the company declared its intention to file for bankruptcy by 29 January. Despite the company’s uncertain future, Williams would receive the severance payment as well as her accrued pension benefits, “the same as any employee of the company”, Matt Nauman, a PG&E spokesman, clarified on Monday.

Williams took over leadership of PG&E, which is California’s largest utility and serves 16 million residents, in March 2017. She headed the company throughout a series of crises.

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Cal Fire investigators determined last year that equipment owned and operated by PG&E sparked a series of fires that struck the north Bay Area in 2017, killing 43 people and destroying more than 14,700 homes.

Investigators are also looking into the company’s role in the 2018 Camp fire, which killed dozens of people in and near the town of Paradise.

PG&E cited potential liabilities from the two wildfires totaling up to $30bn in its bankruptcy announcement on Monday. It “is ultimately the only viable option to restore PG&E’s financial stability to fund ongoing operations and provide safe service to customers”, the company said in a statement.

Consumer watchdog groups and advocates for the wildfire victims expressed dismay at Williams’ severance payment on Tuesday.

Facebook Twitter Pinterest Investigators are also probing the company’s role in the 2018 Camp fire, which killed dozens of people in and near the town of Paradise. Photograph: Josh Edelson/AFP/Getty Images

“For driving the company into bankruptcy and overseeing negligent operations leading to the deadliest wildfires in California’s history, Williams will receive more money than the majority of her customers will earn in their entire lives,” said Mindy Spatt, a spokeswoman for the Utility Reform Network. “If PG&E has an extra $2.5m lying around, it should be donated to fire victims,” she added.

Williams joined PG&E in 2007. She was named executive vice-president of electric operations in 2011, a year after a gas line explosion in San Bruno killed eight people and injured 58.

PG&E faced billions of dollars in fines following the explosion. On Wednesday, a federal judge overseeing the company following the disaster ordered it to reinspect its grid and “remove or trim all trees” that could fall on power lines ahead of next year’s fire season – a move that is arguably in the interest of public safety, but one that will come at considerable cost for the company.

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Monday’s filing was a state-law required notification to employees of intent to file for bankruptcy. The fate of the largest utility in the state, which services 16 million Californians, is now in the hands of lawmakers.

The California governor, Gavin Newsom, said on Monday he understands the “outsized role” that PG&E plays in the state, noting “their service area represents the size and scope in land mass that is larger than the state of Florida”, but said that avoiding bankruptcy can’t come “at all costs”.

“I respect the taxpayer,” Newsom said. “I respect the ratepayer, and I am absolutely cognizant of the stress of those who lost absolutely everything in these fires, that their interests need to also be front and center in this deliberation.”

John Simon is serving as interim chief executive while the company searches for its next leader.