LOS ANGELES, Dec 15, 2019 (BSS/AFP) – California’s governor has rejected a
plan by the state’s largest utility to emerge from bankruptcy, which included
a $13.5 billion payout for victims of a series of wildfires blamed on the
company’s faulty equipment.
Governor Gavin Newsom said in a letter to Pacific Gas and Electric CEO
William Johnson on Friday that the plan “falls woefully short” of a state law
requiring organizational changes and “a capital structure that allows the
company to make critical safety investments.”
The utility had announced on December 6 that it would pay $13.5 billion to
settle lawsuits over its role in a series of wildfires that killed scores of
people and destroyed thousands of homes.
Faulty PG&E power lines were blamed for sparking last year’s so-called
Camp Fire in northern California. It was the deadliest in the state’s history
and left 86 people dead.
“In my judgment, the amended plan and the restructuring transactions do
not result in a reorganized company positioned to provide safe, reliable, and
affordable service to its customers,” Newsom said in the letter.
He said the state “remains focused on meeting the needs of Californians
including fair treatment of victims”, and not on Wall Street financial
interests funding an exit from bankruptcy.
The company was also sued over three other fires dating back to 2015,
including one that devastated the state’s wine region and killed more than 40
people two years ago.
It filed for bankruptcy protection in January, saying it faced more than
$30 billion in fire-related claims.
PG&E spokeswoman Jennifer Robison told the Los Angeles Times that the
company would work “diligently in the coming days to resolve any issues that
may arise.”
The firm has a deadline of Tuesday to revise its proposal.
PG&E must exit bankruptcy by June 30, 2020 to access a multi-billion
dollar fund to compensate wildfire victims.
PG&E prompted outrage earlier this year when it cut off power to millions
of customers in northern and central California in a bid to reduce the risk
of wildfires.