PG&E truck surveys damage from fallen tree. Photo: Justin Sullivan via Getty Images

PG&E still plans to move forward with its Chapter 11 bankruptcy protection filing, a source close to the company tells Axios.

Driving the news: California investigators ruled Thursday that PG&E was not responsible for the 2017 Tubbs fire near Santa Rosa that destroyed thousands of acres and killed more than 20 people.

  • The company's stock jumped 70% after the announcement.

The backdrop: PG&E is on the hook for $30 billion dollars in liability costs for fires in the past two years. Per a company filing, at least $10 billion is for the 2017 fires, but it’s unclear how much of that amount is for the Tubbs fire specifically. PG&E's equipment was linked to over a dozen fires in 2017.

  • PG&E still faces “significant potential liabilities and a deteriorating financial situation, which was further impaired by the recent credit agency downgrades to below investment grade," a company spokesman tells Axios.

California has not concluded its investigation into whether PG&E’s power lines sparked the 2018 Camp Fire, which eclipsed the Tubbs Fire as the worst in the state’s history.

Yes, but: BlueMountain Capital Management, the hedge fund set to launch a full-on proxy battle with PG&E, is urging the company not to file for Chapter 11.

  • “The news from Cal Fire ... is another example of why the company shouldn't be rushing to file for bankruptcy, which would be totally unnecessary and bad for all stakeholders,” said a spokesman for BlueMountain, which owns about a 1% equity stake in PG&E.
  • The hedge fund has sent a series of letters to the company (including one calling on PG&E to replace its entire board) arguing against bankruptcy.

Bottom line: The most likely reason PG&E would halt its bankruptcy filing is any indication that California legislators would be willing to step in and help.

  • California governor Gavin Newsom, per the Fresno Bee: PG&E's bankruptcy remains “an open-ended question, and that’s a question for them.”

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