The California Public Utilities Commission has approved Pacific Gas & Electric’s Chapter 11 plan to emerge out of bankruptcy protection brought on by liabilities from massive wildfires.
The CPUC approval keeps PG&E on track for bankruptcy court confirmation of its reorganization plan by June 29. The confirmation hearing began Wednesday in federal court.
Earlier this year, PG&E announced it planned to pay $25 billion in wildfire liabilities. Those payments will go to wildfire victims, other claimants and state entities, a result of devastation which took numerous lives.
A downed PG&E transmission line was ruled as one of the causes of the blazes which destroyed large swaths of northern California in 2017 and 2018. The financial liabilities compelled the utility to file its second bankruptcy in the past two decades.
“PG&E’s most important responsibility remains the safety of our customers and the communities we serve, and we are committed to doing right by the communities impacted by wildfires,” PG&E Corp. CEO Bill Johnson said a statement. “We have heard the feedback in today’s decision and know we must do better as a company.”
Johnson, a former Tennessee Valley Authority CEO, stepped in last year to guide PG&E through the bankruptcy. He will be leaving as the company emerges from Chapter 11.
By adopting a final decision today, the CPUC approved a number of measures to improve PG&E’s governance process, operational structure, and safety performance. Many of the measures outlined in the CPUC’s final decision already are underway, according to the release. The decision also approves PG&E’s request to issue new debt and securities to finance its exit from Chapter 11.
The Federal Energy Regulatory Commission on May 12 approved the reorganization plan, including the utility’s proposed Fire Victim Trust. This fund will be established to administer and pay wildfire victim claims.
“Since the beginning of the Chapter 11 process, our main goal has been to get wildfire victims paid fairly and quickly. Today’s vote keeps us on track to do so,” Johnson said. “We have supported recommendations from the Governor’s Office, CPUC President Batjer and the other Commissioners, and many other stakeholders to hammer out a Plan that will help PG&E become the utility that our customers and communities expect and deserve.”
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.