Pacific Gas and Electric Co. (PG&E) late Thursday filed a revised final Chapter 11 reorganization plan after its recent completion of three separate victims and insurance settlements totaling more than $25 billion.
California Gov. Gavin Newsom rejected the utility’s amended plan after a review team he assembled assessed the 400-plus page document for its adherence to state legislation. Newsom continued to be unsparing in his criticism of PG&E, alleging it is guilty of “decades of mismanagement.”
Ahead of the governor’s reaction, company officials expressed confidence that the San Francisco-based utility will gain court confirmation of its reorganization plan before a state-imposed June 30, 2020 deadline. PG&E filed for Chapter 11 in January 2019.
CEO Bill Johnson said PG&E has “made substantial changes” to its leadership and “meaningful strides” in its wildfire safety efforts. Johnson said the focus now is on safety and oversight.
Even in the face of heavy criticism from the governor through state regulators and legislators, PG&E officials said they are confident the new plan is “confirmable” and satisfies all requirements embodied in a law passed this summer, Assembly Bill (AB) 1054, in addition to those imposed by the bankruptcy code.
In a five-page letter sent to Johnson Friday, Newsom rebutted the company’s assertions in detail, alleging the amended plan and bankruptcy settlements do not comply with AB 1054. PG&E needs a plan that prepares it for real transformation and fiscal solidarity that can pass muster with the California Public Utilities Commission (CPUC), Newsom said.
“The CPUC’s review of the plan is not a ‘rubber stamp’ -- it a critical component of AB 1054,” Newsom wrote to Johnson.
The restructuring support agreement must be approved by both Newsom and U.S. Bankruptcy Court Judge Dennis Montali. Wall Street analysts have characterized the ongoing process as “fluid.” Newsom criticized an earlier $11 billion settlement with insurance companies as too favorable to PG&E shareholders.