(Reuters) - San Jose, California's third-biggest city, is proposing to convert PG&E Corp <PCG.N> into the country's largest customer-owned utility, the Wall Street Journal reported on Monday, citing the city's mayor.

Mayor Sam Liccardo said in an interview to the WSJ the city served by PG&E hopes to persuade other cities and counties in coming weeks to line up behind the plan.

Liccardo had earlier indicated the same, last week, according to other media outlets. (https://bayareane.ws/2W3tFe9)

The plan is to strip PG&E of its status as an investor-owned company and turn it into a nonprofit, electric-and-gas cooperative, the Monday's report https://on.wsj.com/2JaJWJg added.

Liccardo told the WSJ the time has come for the people dependent on PG&E for essential services to propose a new direction.

PG&E Corp said, in an emailed statement to Reuters, that while the company hasn't seen the proposal the companies facilities are not for sale.

PG&E Corp had earlier this month rejected a $2.5 billion offer from San Francisco to buy the bankrupt Californian company's power lines and other infrastructure within the city, calling the offer inadequate.

(Reporting by Arunima Kumar and Shanti S Nair in Bengaluru; Editing by Maju Samuel and Shailesh Kuber)