PG&E CEO resigning while the company is forced to use cash as collateral for power contracts

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The San Francisco-based company has begun a search for a new CEO following Williams’ departure, according to a statement issued Sunday. PG&E general counsel John Simon will take the helm in the meantime. Williams, 57, took over as CEO in March 2017 and is leaving after a catastrophic three months for PG&E.

Her departure follows the exit of three PG&E executives earlier this month — Patrick Hogan, senior vice president of electric operations at PG&E’s utility unit; Kevin Dasso, vice president of electric asset management; and Gregg Lemler, vice president of electric transmission.

Citigroup Inc. said PG&E faces “a crisis of confidence.” Guggenheim Securities analysts likened the dilemma it poses to investors and lawmakers as “a falling knife.”

Thursday’s turbulence at the California Public Utilities Commission meeting turned what began as procedural meeting into shouting match. Protesters piled in to fight efforts to pass costs to customers for billions of dollars in potential wildfire liabilities. Then state regulators disappointed investors by failing to offer assurances they’ll help keep the utility solvent.

Finally, Moody’s Investors Service Inc. cut PG&E’s credit to junk Thursday, a move that will force the San Francisco-based company to post cash collateral and will kick it out of the biggest investment-grade bond index.

Meanwhile, PG&E now has two junk ratings, following a downgrade earlier this week by S&P Global Ratings. That means it will be required to use cash as collateral to guarantee power contracts, according to the company’s latest quarterly filing, which estimates the utility will have to fully collateralize as much as $800 million of positions. It had $430 million of cash on its books in September, according to a regulatory filing.


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