When the Pacific Gas and Electric Company emerges from Chapter 11 bankruptcy, the utility company will immediately begin meeting its recently agreed upon settlement worth $13.5 billion with wildfire victims.
The company released details late last Friday.
Local Assemblyman James Gallagher said while there are still a lot of details to be worked out as part of the deal, Cascade Fire victims and others that were part of the settlement should reach out to their respective attorneys to start the process.
“The devil is in the details and they aren’t fully fleshed out yet, so that’s why every victim should be talking with their attorney to fully understand how this is going to work,” he said.
PGE recently settled with wildfire claimants from the 2015 Butte Fire, 2017 Northern California wildfires and 2018 Camp Fire, in addition to victims of the 2017 Tubbs Fire and 2016 Ghost Ship Fire in Oakland. The $13.5 billion settlement will resolve all claims related to those fires as part of the company’s Chapter 11 Plan of Reorganization, pending approval from a federal bankruptcy court.
Paul Moreno, a spokesperson for the utility company, said the settlement will be broken down in a few different ways – $5.4 billion in cash will be contributed on the effective date of the Plan of Reorganization; $650 million will be paid in cash on Jan. 15, 2021; $700 million will be paid in cash on Jan. 15, 2022; and $6.75 billion in common stock of the reorganized PG&E Corporation will be issued.
“This settlement represents significant progress toward resolving our Chapter 11 cases and allows PG&E to move forward toward confirmation of its plan before the June 30, 2020, deadline,” Moreno said.
PGE is on a time crunch to settle the claims and emerge from bankruptcy by June 30, 2020, if it wants to benefit from the state’s wildfire fund, which was established with the passing of Assembly Bill 1054 and creates a safety fund of up to $21 billion to help utility companies pay for damages linked to fires they are found to be at fault for.
Gallagher said AB 1054 gave the state a leverage tool to help victims receive a much better settlement than they likely would’ve without the impending deadline.
“When we heard (PGE) elected to go into bankruptcy, a lot of us had concerns that the recovery for victims would be minimal,” Gallagher said. “I think that this, at least in concept, is a pretty large settlement to compensate victims.”
As part of its plan to emerge from bankruptcy, PGE also reached a $1 billion settlement with cities, counties and other public entities that had filed wildfire claims and reached an $11 billion agreement with insurance companies and other entities that have already paid insurance coverage for claims relating to the 2017 and 2018 wildfires.
PGE will now amend and finalize its reorganization plan and await approval from the bankruptcy court. Gov. Gavin Newsom will also review the amended plan to confirm that it complies with the requirements of AB 1054.