PG&E filed a proposal on Monday with a federal court that plots a road map for the utility to navigate out of bankruptcy and pay off its creditors, including numerous victims of wildfires linked to the company — although the plan caps wildfire-related claims at $16.9 billion.
The reorganization plan proposed by PG&E would cap payments to wildfire victims who filed claims directly against PG&E at $8.4 billion, papers filed in U.S. Bankruptcy Court on Monday show.
The proposal also would cap payments to insurance carriers that are seeking reimbursement from PG&E for wildfire claims they paid their customers at $8.5 billion, according to the plan filed in connection with PG&E’s Chapter 11 bankruptcy.
“This is outrageous,” said Gerald Singleton, an attorney who represents about 5,500 wildfire victims. “PG&E is shortchanging the wildfire victims and is attempting to evade its responsibility.”
Some estimates have placed PG&E’s wildfire-linked liabilities in the vicinity of $15 billion to $20 billion, or even as high as $30 billion.
“Under the plan we filed today, we will meet our commitment to fairly compensate wildfire victims and we will emerge from Chapter 11 financially sound and able to continue meeting California’s clean energy goals,” PG&E Chief Executive Officer Bill Johnson said in a prepared release.
PG&E said it would employ a combination of debt and stock to raise the cash to help finance its exit from bankruptcy.
But PG&E’s bankruptcy case could eventually trigger higher monthly power bills for the utility’s customers, depending on the final plan for financial reorganization that is approved by the bankruptcy judge and eventually reviewed by the state Public Utilities Commission.
The company, though, indicated that the proposal in its current form wouldn’t necessarily raise rates.
“It’s rate neutral for customers,” PG&E said in comments emailed to this news organization.
On Jan. 29, PG&E filed for a Chapter 11 filing to reorganize its finances, listing $51.69 billion in debts and $71.39 billion in assets after facing a forbidding mountain of wildfire-related claims and other liabilities.
PG&E cautioned that the actual amount of payments for wildfire-linked claims can’t be determined until other court proceeds are complete, including a state court case to determine whether PG&E is liable for the lethal Tubbs Fire in the North Bay Wine Country in 2017.
“The plan is a framework for compensating wildfire victims and other stakeholders,” PG&E said in the email. “And it’s a critical step in a multi-step process which will be updated as developments require.”
The utility is already a convicted felon for crimes it committed before and after a fatal explosion of natural gas in San Bruno that killed eight. The lethal blast was caused by a combination of PG&E’s flawed record keeping and shoddy maintenance, along with lazy and ineffective oversight by the state Public Utilities Commission, federal investigators determined in 2011.
State fire investigators have determined that PG&E’s equipment was the cause of 17 destructive fires in 2017. However, PG&E was found not to be the cause of the lethal Tubbs Fire, which was one of the October 2017 infernos, state fire investigators ruled earlier this month. Even so, a state court case will determine whether PG&E should be held liable for the Tubbs Fire that roared through sections of Sonoma County and Napa County.
In May, California fire experts determined that PG&E’s equipment caused the deadliest and most destructive fire in California history, a lethal blaze that roared through Butte County in November 2018 and killed 85 people.
The utility also has been found to be responsible for causing a fatal fire that scorched parts of Amador County and Calaveras County in 2015 that’s known as the Butte Fire.
Separately, the city of San Francisco has offered to buy PG&E’s electricity system in that municipality for $2.5 billion. The bankruptcy court and the PUC would have to approve any asset sale.
While it isn’t a major surprise that PG&E is seeking to cap the amount it pays out for wildfire-linked liabilities, victims could be harmed further by the bankruptcy plan. Singleton, the attorney, quickly urged wildfire victims to reject PG&E’s reorganization plan.
“PG&E at best wants to pay 50 cents on the dollar to wildfire victims,” Singleton said. “That’s offensive to the victims.”
Source: The Mercury News