PG&E Announces One Bankruptcy Battle Settled
Sonora, CA — Pacific Gas & Electric reports it has settled a dispute with disaster-relief agencies that threatened to siphon money away from a $13.5 billion fund earmarked for victims of catastrophic wildfires caused by the company
On Tuesday a PG&E lawyer disclosed the resolution at the outset of a court hearing. It could remove a major stumbling block as the company scrambles to meet a June 30 deadline to emerge from bankruptcy.
The details of the deal worked out with the Federal Emergency Management Agency (FEMA) and California’s Office of Emergency Services and lawyers for wildfire victims are expected to be revealed next week as currently, a federal mediator is helping to hammer out the final agreement.
The truce is designed to ensure people who lost family members and homes during a series of fires ignited by PG&E equipment during 2017 and 2018 get paid before two different taxpayer-backed agencies. Lawyers for FEMA and the Office of Emergency Services told the judge they were pleased with the deal worked out with PG&E. Also, the company’s stock surged 10% Tuesday to close at $13.90.
However, it remains unclear if it will satisfy everyone involved as Gov. Gavin Newsom and the chief regulator for the utility, the California Public Utilities Commission, holds veto power because PG&E needs its approval of its bankruptcy plan to be covered by the state’s wildfire insurance fund.
To date, Newsom and state regulators have rejected the plan as carrying too much debt for PG&E to be able to make an estimated $40 billion in improvements to its electrical grid. They also are demanding PG&E replace its entire 14-member board of directors.