Pacific Gas & Electric has announced the key elements of its plan to emerge from Chapter 11 bankruptcy reorganization later this year.
The San Francisco-based utility and its parent company, PG&E Corp., hope to have the Chapter 11 plan confirmed by June 30. That is the deadline for which PG&E participates in a state wildfire fund going forward.
PG&E’s role in starting a deadly northern California wildfire contributed to its financial collapse last year. Previous news reports indicated that PG&E was liable for as much as $12 billion due to devastation of the blazes.
California Gov. Gavin Newsom has rejected a previous emergence plan. This one, filed last week, compels the utility to refresh its board of directors membership, regionalize its operations and infrastructure and establish new C-level leadership for risk and safety roles.
PG&E also commits itself to pay more than $25 billion in settlements reached with individual victims, subrogation claimants, and public entities. A state investigation determined PG&E equipment failed during high wind events and set fires which lead to at least one of several massive blazes which killed people and destroyed thousands of structures and acres.
“Under our plan, the company will emerge from Chapter 11 as a reimagined utility with an enhanced safety structure, improved operations, and a board and management team focused on providing the safe, reliable, and clean energy our customers expect and deserve,” CEO Bill Johnson said in a statement. “Our 23,000 PG&E employees are striving every day to deliver that service and to build the utility of the future. We are committed to emerge from Chapter 11 by June 30, 2020, in a manner that allows us to help lead California toward the future, meeting the highest safety, governance, and operational standards.”
Johnson signed on to lead PG&E in the first half of 2019 after retiring as CEO of the Tennessee Valley Authority. PG&E had declared bankruptcy in January 2019.
Also last year, PG&E notified the U.S. Securities and Exchange Commission that it believes transmission failure ignited the Camp Fire of November 2018, what many say was the deadliest and most destructive wildfire in state history. The utility reported that it was taking a $10.5 billion pre-tax charge in the fourth quarter of 2018 related to the Camp Fire claims against it.
The SEC filing detailed equipment failures which likely contributed to the blaze that killed 86 people, destroyed more than 10,000 structures and damaged about 150,000 acres.