The latest chapter of the painful PG&E (NYSE:PCG) saga is Chapter 11. The California electric utility is facing liabilities in the billions of dollars, based on claims that its equipment sparked some of California's recent wildfires. Declaring bankruptcy will allow it to shed some debt and restructure so that it can keep providing power to its customers. Yet the somewhat surprising result on Wall Street is that investors bid the company up on the news.

In this segment of the MarketFoolery podcast, host Chris Hill and Bill Mann, the Fool's director of small-cap research, discuss the future of this business and their views of its investment thesis.

A full transcript follows the video.

Check out the latest PG&E earnings call transcript.

This video was recorded on Jan. 29, 2019.

Chris Hill: Let's check in on the PG&E saga. The California utility filed for Chapter 11 bankruptcy protection. Shares of PG&E up 17% when we walked in the studio? Am I supposed to put this on my watchlist now?! I mean, we've talked before about how, look, it's a utility, it can't just go away.

Bill Mann: Right.

Hill: But I just assumed it going to reappear in some form that maybe was completely removed from the public markets. Am I now supposed to think, "Oh, maybe there's a future, not just for this utility, but a future for investing in this utility?"

Mann: Oh, yeah, absolutely. Utilities are so weird. If you produce a product and it, for example, catches on fire, and you get sued for it, and you don't have money to cover it, you go out of business and that fire-producing product doesn't get produced anymore. You can't do that with utilities. You can't say, "Well, electricity or the production of electricity caused these fires in Northern California. The company's going out of business. Let's just produce no more electricity in Northern California. There's your solution."

What's going to happen? There were fires in 2017, and the California Public Utilities Commission passed a ruling that allows the utilities to pass on the costs of the liabilities for such events onto rate holders. Good thing that they did, too, otherwise we'd have an enormous financial issue with PG&E. So, yes, it's going bankrupt. It has sufficient assets to cover its cash liabilities. It's going to come out of bankruptcy, restructured the equity, will in all likelihood have some value. The bonds were trading at $0.85 on the dollar earlier. I think they'll rally. What you have now in this place is a plan.

Hill: Are you interested?

Mann: No. No! Here's the thing. It's going to become much more expensive to produce electricity in this country for a couple of reasons. One, because the slate is changing. We can argue over global warming a little bit, but utilities are having to respond. They're having to change their slate. The cheapest forms of energy -- coal, nat gas, oil -- are being ramped down, and other forms are being ramped up. But also, these types of liabilities are popping up a lot more, as well. You could say that it's because of climate change, you could also say it's because of a change in how people live. The town called Paradise, which is where the fires were, and where the most damage was, where the houses were destroyed, was probably not something that really would have existed in the same form even 40 years ago. It was largely a retirement community. People, as a change of lifestyle, went up and lived in the woods.

So, no, I don't find utilities to be a very exciting investment because they'll be boring until they're exciting in the exact wrong way.