Pacific Gas& Electric Co. (PG&E) employees work to fix downed powerlines burned by wildfires in this aerial photograph taken aboveSanta Rosa, California, on Thursday, Oct. 12, 2017. (Photo: DavidPaul Morris/Bloomberg)

The lights would stay on if California utility giant PG&ECorp. files for bankruptcy. But the company, its customers andinvestors would be set for years of uncertainty.

While utility bankruptcies are rare, they can result in anythingfrom a healthy company to a breakup, with business units sold offlike spare parts. For consumers, the fallout likely means higherrates.

Liabilities estimated by be as high as $30 billion

PG&E plunged 22% Monday on news that it's exploring abankruptcy filing in response to an onslaught of wildfire liabilities that are estimated to be ashigh as $30 billion — far exceeding the company'smarket value of less than $10 billion.

Related: For PG&E, having enough wildfire insurancewouldn't come cheap

On Tuesday, the company fell as much as 17% after S&P GlobalRatings downgraded the San Francisco-based company's long-termcredit rating to junk, and said the utility remains on a negativewatch. The bonds hit all-time lows.

Pressure on California lawmakers to provide bailout

A potential bankruptcy is seen as putting pressure on California lawmakers to providea bailout and avoid more turmoil for the state's largestutility. Whatever the outcome, bankruptcy tends to be “massivelyinefficient,” said Severin Borenstein, an energy economist at theUniversity of California, Berkeley.

“It freezes the company,” he said. “A judge who has no expertiseessentially becomes the CEO. And there are these committees thatget involved in every corporate decision.”

PG&E has faced bankruptcy previously.

Its Pacific Gas and Electric utility filed for bankruptcy in2001 as soaring wholesale power prices and rolling blackouts threwCalifornia into crisis. The PG&E Corp. holding company itselfnever filed for bankruptcy. The utility emerged three years later,its business intact. Under the reorganization plan, ratepayers wereresponsible for $7.2 billion of the company's debt from theelectricity crisis.

Electric utility bankruptcy filings are rare

Bankruptcy filings tend to be rare for electric utilitiesbecause they have large and steady revenue streams. But there havebeen other cases. El Paso Electric, for example, filed for Chapter11 in 1992, due largely to expenses tied to the Palo Verde nuclearplant. The Texas company exited bankruptcy court four years laterwith a new rate plan that let it recoup its costs.

A PG&E bankruptcy isn't “likely” at this time as the companycan tap other sources of cash, either through the sale of itsnatural gas unit or other real estate, or a cut in its $5.5 billioncapital spending plan, analysts at Mizuho Securities USA LLC led byPaul Fremont wrote in a research note Tuesday. Fremont cut hisprice target on the shares to $19 from $27.

“There are other sources for cash the company can rely on toavoid bankruptcy,” Fremont said in the note.

Not every bankrupt utility has fared as well.

Last year, Energy Future Holdings Corp. was forced to sell offits electricity distribution business in Texas to Sempra Energy aspart of a tortuous four-year bankruptcy proceeding. And the PuertoRico Electric Power Authority, which filed for bankruptcy in 2017due to mounting debts, now plans to hire a private operator tomanage its electricity grid.

The Puerto Rico utility's corporate disarray left itill-prepared when Hurricane Maria slammed into the island in2017 — something California leaders would have toweigh in a PG&E bankruptcy as they face the prospect of anotherfire season with a power company in dire financial straits.

No public comment from PG&E

PG&E hasn't commented publicly on the prospect of bankruptcyand didn't have immediate comment for this story. While the companydoes have experience navigating the Chapter 11 process, theproblems it faces now are far different from those in 2001.

Then, unscrupulous energy traders and companies — mostnotably, Enron Corp. — exploited flaws in California'srecently restructured electricity market to send wholesale powerprices soaring. Utilities, their rates regulated by the state,couldn't pass those cost increases on to their customers. At thetime of the filing, PG&E's debts were reported to be rising by$300 million per month.

This time, PG&E's travails are tied to the role its powerlines may have played in fires that killed dozens of people. InCalifornia, utilities can be held liable for damages even if theyaren't found to be negligent.

Possible safety rule violations, falsified records

State investigators have blamed PG&E's equipment forstarting 17 of the wildfires that tore across Northern Californiain 2017. Those investigators are now exploring whether a PG&Etransmission line started November's Camp Fire, which leveledthe Butte County town of Paradise and left 86 people dead.

Since then, state regulators accused the utility owner ofbreaking natural gas pipeline-safety rules and falsifying records.On Tuesday, PG&E's utility promoted Michael A. Lewis to seniorvice president of electric operations effective today, less than aweek after the holding company said it was weighing changes to bothits board and how its businesses are structured.

“This will now require a significant amount of time for thecompany to re-earn the trust of its stakeholders,” S&P said ina statement late Monday, explaining its decision to downgradePG&E to B from BBB-. “These conditions may significantly limitthe company's options including its ability to consistently financeor safely operate its businesses.”

Political pressure

California politicians have been considering legislation thatwould help PG&E pay off lawsuits related to the Camp Fire, andone veteran lawmaker has publicly questioned whether the companywas using the specter of bankruptcy to pressure Sacramento.

In 2001, Pacific Gas and Electric filed for bankruptcy whilebailout talks with then-Governor Gray Davis were well underway.Davis, blindsided by the filing, called it a “slap in the face toCalifornia,” according to local reports at the time.

The company emerged from that bankruptcy without majorstructural changes and with its top management intact. A filing nowmay result in a harsher outcome, said Mark Toney, director of theUtility Reform Network consumer group. PG&E saw its reputationbadly tarnished by the 2010 San Bruno gas pipeline explosion, whichled to six criminal convictions against the company.

“Last time, PG&E was able to portray itself as an innocentvictim, and there were bigger actors that were gaming the market,that were lying, stealing and cheating,” Toney said. “Now, I thinkthe feeling is completely different. They are a convictedfelon.”

Related: What insurers need to know about California's fire,insurance overhaul