PG&E filed a proposal on Monday with a federal court that plots a roadmap for the disgraced and 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 at $8.5 billion 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 of reorganization filed Monday in connection with PG&E’s Chapter 11 bankruptcy.
PG&E also agreed to pay $1 billion to compensate public entities.
Some estimates have placed PG&E’s wildfire-linked liabilities in the vicinity of $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.
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 its finances buckled beneath 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, included 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 comments emailed to this news organization. “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.
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, which eventually would have to be approved by the state Public Utilities Commission, wouldn’t necessarily raise rates.
“It’s rate neutral for customers,” PG&E said in comments emailed to this news organization.
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 county court 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.
“PG&E clearly understands it has liability for nearly these fires,” said Gerald Singleton, an attorney for numerous fire victims.
It isn’t a major surprise that PG&E is seeking to cap the amount it pays out for wildfire-linked liabilities.
“The company is contending they don’t have to pay full value for a lot of reasons,” Singleton said. “But they admitted their equipment caused every fire except for the Tubbs Fire.”