I think you missed part of the article:

"The utility company’s stock has lost more than 80% of its value since the 2017 fires broke out, and its credit rating has been downgraded to junk status."

How was the downside risk of the shareholders socialized?

PG&E doesn't have carte blanche, it is a regulated monopoly, any changes to the rate structure has to be approved.

As for the company dying, people in California will probably prefer to continue having the electricity