San Francisco-based natural gas and electric utility PG&E Corp. on Tuesday said its Chapter 11 plan is on track for confirmation in federal court by the end of June.
CEO Bill Johnson said in a fourth quarter 2019 earnings release that “significant progress” had been made over the past year, with “essentially every consequential issue” resolved under the bankruptcy court oversight. The timeframe for which the Chapter 11 plan is expected to be confirmed coincides with the utility’s deadline for participating in California’s wildfire fund created in Assembly Bill (AB) 1054. The company filed for bankruptcy in January 2019.
Johnson acknowledged that the company has to gain support from key stakeholders, including Gov. Gavin Newsom, legislators and the California Public Utilities Commission (CPUC). In a Jan. 31 filing to the CPUC, PG&E told state regulators it was on track to exit bankruptcy and become a financially stable “reimagined utility.”
CPUC on Tuesday laid out a six-week schedule for the state regulatory proceeding to determine if the reorganization plans meet the requirements of the state wildfire relief bill. CPUC President Marybel Batjer released proposals for modifying the utility’s proposed plan and established a process for stakeholders to comment. An initial organizational hearing is set for Tuesday (Feb. 25). Public hearings, if necessary, would be held March 18-20.
Batjer said investor-owned utilities generally have “enormous privilege” and “great responsibility,” but in regard to PG&E she has “great concerns” stemming from “a pattern of safety-related failures.”
“We need to ask how best PG&E should be governed and operated coming out of this process,” Batjer said. “It must be clearly demonstrated that mechanisms are in place to ensure that the utility has emerged as a fundamentally changed company.”
Batjer said the proceeding has identified financial and other issues on which any plan of reorganization would be evaluated.
PG&E spokesperson Andy Castagnola said the utility is continuing to “receive feedback on our reorganization plan from a number of stakeholders, including the governor.” The plan has to meet the letter and spirit of AB 1054, he said.
During the quarterly earnings call, PG&E management summarized progress in the first weeks of 2020, including meeting the objectives of its wildfire mitigation plan and reaching a $13.5 billion settlement with the Tort Claimants Committee and individual fire victims. Johnson said there had been settlements in the bankruptcy case, including a general rate case and a wildfire proceeding settlement with the CPUC.
An updated Chapter 11 reorganization plan also was submitted to satisfy wildfire claims, as well as a five-year financial forecast.
Fourth quarter net losses totaled $3.6 billion (minus $6.84/share), compared with year-ago losses of $6.9 billion (minus $13.24). For 2019, PG&E lost $7.7 billion (minus $14.50/share), versus a 2018 loss of $6.9 billion (minus $13.25).
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