Pacific Gas and Electric Co. (PG&E) and its parent company have received approval from a federal bankruptcy court in San Francisco for a $23 billion financing package to help pay its considerable liabilities from a rash of wildfires in 2017 and 2018.
PG&E said it now has a green light to emerge from Chapter 11, which it had filed in 2019. PG&E indicated it is close to a goal of exiting bankruptcy in June with an approved reorganization plan to meet other state financing requirements.
Approval by U.S. Bankruptcy Judge Dennis Montali was made possible when California Gov. Gavin Newsom dropped opposition to the utility financing package, citing the coronavirus turmoil. PG&E’s stock had dropped by half in the past three weeks.
Newsom was concerned PG&E was taking on too much debt as it needed up to $40 billion for a modernization program.
Estimates place the wildfire liabilities at up to more than $25 billion for four separate settlements reached last year with Northern California communities, insurance companies, fire victims and the California Public Utilities Commission.
PG&E spokesperson Ari Vanrenen said, “Discussions continue with the governor’s office, and we continue to make good progress. We remain on track to gain approval of our reorganization plan by June 30.”
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