Needing a boost to successfully exit Chapter 11 bankruptcy by mid-2020, Pacific Gas and Electric Co. (PG&E) late Friday reached a $13.5 billion settlement with the victims who sustained losses from the 2015 Butte Fire, 2017 Northern California Wildfires and 2018 Camp Fire that were thought to be caused by the combination utility's equipment.
The deal was struck with the Official Committee of Tort Claimants (TCC) for the fires in Northern California that led in part to the San Francisco-based utility’s bankruptcy last January.
Established to protect fire victims' rights and information needs in the bankruptcy proceedings, TCC said the agreement with PG&E took months of negotiations and, if approved, would be used to fund a trust dedicated to compensating the victims (tort claimants) to help rebuild their lives. Eligible victims have an extended deadline until the end of this year to file their claims.
"The TCC reached this agreement with PG&E, in part, to give fire victims and other tort claimants the best chance at being fully compensated for their harms," said TCC member Kirk Trostle, who also is a fire victim.
PG&E management claimed the multi-billion-dollar utility is now on "a path to making major changes needed to exit bankruptcy” ahead of a June 30 deadline imposed by state legislation, Assembly Bill 1054, which was enacted last summer. Subject to several conditions, the settlement is to be implemented as part of the Chapter 11 reorganization plan that must be confirmed by the U.S. Bankruptcy Court in San Francisco and California official.
While committing to change and providing better safety and reliability in its electric service, CEO Bill Johnson said "with this important milestone now accomplished we are focused on emerging from Chapter 11 as the utility of the future that our customers and communities expect and deserve."
PG&E has "embraced change and taken significant concrete actions," Johnson said. He listed his hiring after he had retired from running the Tennessee Valley Authority and many other board and senior executive changes as part of the recent company transition. He also noted a $105 million Wildfire Assistance Fund to aid people displaced by the fires, and he cited investments the company has continued to make in its infrastructure.
Since it filed bankruptcy 10 months ago, PG&E has reached a $1 billion deal with cities, counties and other public entities involved in the array of fires. It also reached an $11 billion agreement with insurance companies and other entities that already have paid claims for the blazes.
As part of the latest agreement, PG&E said it did not admit fault in the Tubbs or the warehouse fire in Oakland’s Ghost Ship fires, but claims related to those fires could be resolved as part of the latest settlement.