The parent of Pacific Gas & Electric Co., which declared for Chapter 11 bankruptcy in recent years due to the financial impacts of northern California wildfires allegedly started by its equipment, is selling its San Francisco headquarters for about $800 million.
Customers will see about half of that amount in rate returns approved by the California Public Utilities Commission. PG&E Corp. is selling its complete campus to a unit of Hines Co. and moving into a new headquarters in Oakland at the beginning of next year.
The move will result in “substantially lower headquarters costs over the long term,” the company reported.
“PG&E is committed to delivering safe, reliable energy service to our customers while staying true to our pledge to keep their costs as low as possible. In addition to promoting long-term savings for PG&E, the sale of our San Francisco headquarters will help to offset future customer rates at a time when we’re making significant safety and operational investments,” PG&E Corp. CEO Patti Poppe said in a statement. “We have been actively listening to the needs of the Oakland community and are excited to play a part in the city’s vitality. It’s important to us to deepen our ties to our new hometown.”
The northern California utility owner filed for Chapter 11 bankruptcy and had its reorganization plan approved last year. PG&E cited some $25 billion in wildfire liabilities, notifying the U.S. Securities and Exchange Commission that it believes transmission failure ignited the Camp Fire of November 2018, what many say was the deadliest and most destructive wildfire in state history. The utility reported that it was taking a $10.5 billion pre-tax charge in the fourth quarter of 2018 related to the Camp Fire claims against it.
The SEC filing detailed equipment failures which likely contributed to the blaze that killed 86 people, destroyed more than 10,000 structures and damaged about 150,000 acres.
It was the utility giant’s second bankruptcy reorganization in the past 20 years. PG&E also sought Chapter 11 protection in 2003.
PG&E also plans to consolidate three other East Bay office locations, located in Concord and San Ramon, into the new Oakland headquarters. This overall plan simplifies PG&E’s Bay Area real estate footprint and further lowers its real estate costs.