PG&E Reaches Deal With Regulators but Faces More Hurdles

Eight people died in that accident, which investigators attributed to PGE’s failure to properly maintain its gas pipeline system. The $1.6 billion penalty the commission imposed on the company at the time was the largest it had ever assessed.

The settlement for PGE’s role in wildfires will be subject to public comments, a review by an administrative law judge and a vote by the utility commission’s members.

PGE’s bankruptcy case became much more complicated when Mr. Newsom sent a letter to the utility Friday evening calling on the company to make more far-reaching changes to its leadership and plans for avoiding future disasters. Among the governor’s demands are the installation of a new board of directors, more detailed safety measures and a new process to allow the state to strip PGE of its operating license and sell its assets in the event of another misstep.

“They asked the company to create its own self-destruct button,” said Jared Ellias, a bankruptcy specialist at the University of California Hastings College of the Law. “It feels very much like uncharted territory, where we have never seen a case where a state government was as involved.”

Mr. Newsom also questioned the math behind PGE’s restructuring plan, which he said does “not result in a reorganized company positioned to provide safe, reliable and affordable service to its customers,” as required by state law.

In addition to getting its plan approved by Judge Montali, PGE needs Mr. Newsom’s blessing. That’s because the governor must sign off on PGE’s plan to emerge from bankruptcy by a June 30 deadline in order for the utility to participate in a new wildfire fund that the California Legislature created this year. The fund is expected to help pay for damages from wildfires started by equipment owned by investor-owned utilities like PGE, Southern California Edison and San Diego Gas Electric.

A group of hedge funds that own PGE bonds, including Elliot Management, have seized on the dispute between the governor and the company to push the court to consider an alternative plan that they have proposed. Another group of hedge funds, including Abrams Capital Management, that own stock in the company are backing PGE’s plan.

Article source: https://www.nytimes.com/2019/12/17/business/energy-environment/pge-bankruptcy-wildfire-victims.html?emc=rss&partner=rss