PG&E Offers Plan to Exit Bankruptcy
Parent company PG&E Corp. and its utility subsidiary Pacific Gas and Electric filed a framework to exit bankruptcy that limits payments to victims and creditors to $17.9 billion, including $8.4 billion to wildfire victims, $8.5 billion to creditors and $1 billion to public entities. It anticipates raising $14 billion in equity.
The company said in the Sept. 9 plan filed with the U.S. Bankruptcy Court in San Francisco that it would honor all trade claims and collective bargaining agreements. The utility is on track to have the plan confirmed by June 30, 2020, to be eligible to participate in the newly established state wildfire fund.
“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,” CEO Bill Johnson said in a statement.
PG&E voluntarily filed for Chapter 11 bankruptcy protection in January 2019 after the 2018 Camp Fire, the state’s deadliest. Some estimates of its liabilities from fires in 2017 and 2018 have been as high as $30 billion. A number of contractors and suppliers ranging from large construction companies to small equipment providers have claims against the utility.
Days before PG&E released the reorganization plan, San Francisco offered to pay $2.5 billion for the utility’s electric distribution and transmission lines that serve the city. “The offer we are putting forth is competitive, fair and equitable,” the city said in a statement. It will offer PG&E financial stability while helping the city provide safe, reliable affordable power, the statement says.
PG&E said it is open to talk with the city about its offer but does not believe that municipal control of the system is in the best interest of its customers and stakeholders.
San Francisco has a history of owning public utilities, however, including the water supply system.