Pacific Gas & Electric Co.’s plan to emerge from bankruptcy mid-year under a mountain of debt from wildfires sparked by its power equipment would leave the massive, troubled utility a “junk bond company,” mayors of San Jose and Oakland and other cities said in a letter Tuesday to state regulators.

“We urge you to do more,” the mayors, representing a coalition of local officials throughout PG&E’s Northern California service area who had proposed turning the utility into a giant ratepayer-owned cooperative, said in the letter to the California Public Utilities Commission.

“If PG&E cannot emerge as a financially viable, reliable utility, then the commission should pursue another path,” the letter concluded. “We stand ready to work with you on a truly long-term solution.”

The utilities commission is scheduled to take up PG&E’s bankruptcy exit plan May 21. If the commission accepts the plan, U.S. Bankruptcy Judge Dennis Montali, who has shepherded PG&E’s bankruptcy case through the court, then would have to approve it.

PG&E must emerge from bankruptcy by June 30 to qualify for a wildfire insurance fund established by state legislation — its financial plan would unravel without access to that money.

PG&E filed for Chapter 11 bankruptcy reorganization in January 2019 citing $51.69 billion in debts and liabilities from catastrophic wildfires linked to its aging power grid that erupted in fall windstorms.

The coalition of local officials, led by San Jose Mayor Sam Liccardo, last fall urged orchestrating a buy-out of PG&E that would restructure it as a supersized version of a rural-electric cooperative owned and run by its ratepayers. They argued that would allow it to borrow at lower rates and make it more accountable.

Otherwise, they said, “this financially fragile company would be allowed to take on further debt burden, paying excessive interest rates due to holders of ‘junk bond’ debt.”

But there may be little appetite among state officials for upending the carefully negotiated bankruptcy exit plan hammered out after extensive negotiations with wildfire victims, regulators and an often-critical Gov. Gavin Newsom, which includes new controls aimed at preventing more of the company’s serial safety failures.

Earlier this month, the utilities commission, after rocking PG&E with a record penalty of almost $2 billion for its role in several fatal Northern California infernos in 2017 and 2018, backed away from adding a $200 million fine out of concerns that too drastic a punishment could jeopardize the bankruptcy exit deal.

Though the move drew fire from consumer advocates, an attorney representing wildfire victims said at the time it was an appropriate balance that ensured the punishment wasn’t so severe that it would leave PG&E unable to pay damages to wildfire victims.