Pressure Mounts In Battle Between PG&E And Governor
Sonora, CA — California Gov. Gavin Newsom is turning up the heat on Pacific Gas & Electric (PG&E) regarding forking over billions more in cash to pay thousands of wildfire victims that drove the utility into bankruptcy.
The rising tensions were scheduled to be aired out in a bankruptcy court hearing Wednesday (Nov.13), but it was abruptly postponed today to Tuesday (Nov. 19) of next week. The delay could allow the sides to negotiate a compromise on PG&E’s blueprint for its financial comeback. Newsom is threatening to try to turn the utility into a customer-owned cooperative run by the state and local governments if the company doesn’t make changes.
The main stumbling block surrounds PG&E’s $11 billion settlement reached in September with most of the insurers covering victims of deadly wildfires that ripped through Northern California during 2017-18. That deal has PG&E paying the insurers in cash and could drain the kitty leaving uninsured and underinsured victims without a cent.
In an objection filed Saturday, Newsom and attorneys for wildfire victims expressed concerns that they will be paid with company stock, which has plummeted by 70%. One of their lawyers, Robert Julian argues, “It is time to call this settlement what it is: a mistake.” Noting that in the deal the utility has “given away all their cash and placed the wildfire victims in a position of full risk in this case.” PG&E disputes that and in a statement says it “remains committed to working with the individual claimants to fairly and reasonably resolve their claims and will continue to work to do so.”
The insurers claim they have made concessions as well. Defend their right to the $11 billion, which only covers about half of the $20 billion in liability costs, in a statement, they maintain they are “a major facilitator of a comprehensive solution” to PG&E’s plight.”