SAN FRANCISCO (Reuters) – A committee of bondholders of PG&E Corp’s utility unit on Tuesday proposed a bankruptcy reorganization plan that would inject up to $30 billion, primarily equity, to help the California power provider emerge from Chapter 11 and address its liability from wildfires.
FILE PHOTO: A PG&E truck carrying an American Flag drives past PG&E repair trucks in Paradise, California, U.S. November 21, 2018. REUTERS/Elijah Nouvelage/File Photo
In a filing with the U.S. bankruptcy court in San Francisco, the committee, made up of senior unsecured noteholders of Pacific Gas & Electric Co, also sought to terminate the utility’s exclusive period for filing a Chapter 11 reorganization plan so the committee may file its own plan.
PG&E has been too slow to file its own plan and “the need to exit bankruptcy expeditiously is paramount,” the committee said in its filing, adding its plan would provide up to $16 billion to compensate all of PG&E’s pre-bankruptcy wildfire claims.
PG&E sought Chapter 11 bankruptcy protection in January in the aftermath of devastating wildfires in Northern California in 2017 and 2018 that left the company anticipating $30 billion in liabilities blamed on its equipment.
The worst of the blazes, November’s Camp Fire, leveled the town of Paradise and killed more than 80 people. It was the deadliest and most destructive wildfire of modern times in California.
A spokesman said the committee had no additional comment on the plan beyond its filing. San Francisco-based PG&E was not immediately available for comment.
The committee said in its filing that its reorganization plan will provide a “substantial” capital investment to fund improvements in PG&E’s electric infrastructure to ensure reliable power service and meet California’s renewable energy goals.
The committee also said its plan will provide for a quick exit from bankruptcy for PG&E that maintains an investment-grade rating for the power provider.
Additionally, terms of the plan will not affect PG&E’s ratepayers and will provide for a $4 billion contribution to a fund for insuring against utility-related wildfire liabilities that California officials are considering establishing.
The plan does not require legislative changes to California’s inverse condemnation rules, which hold utilities in the state responsible for wildfire liabilities regardless of their negligence, as long as their equipment is involved.
State officials have been considering easing the liability standard, a politically sensitive issue amid public frustration and anger over the role of PG&E’s equipment in wildfires in recent years.
Governor Gavin Newsom last week proposed helping utilities create a fund of up to $21 billion to compensate future victims of wildfires sparked by the companies’ equipment or employees.
Approval from state lawmakers would be needed to create the fund, which would be supported by state-issued bonds, a new utility-funded insurance policy and an extension of an electricity surcharge.
Utilities would have to spend a combined $3 billion on wildfire safety measures to qualify for aid from the fund.
Newsom’s office was not immediately available for comment on the PG&E noteholders’ reorganization plan.
Reporting by Jonathan Stempel in New York and Jim Christie in San Francisco; Editing by Matthew Lewis and Steve Orlofsky