PG&E says it has reached USD13.5 billion wildfire settlement

SAN FRANCISCO (AP) – Pacific Gas and Electric said it has reached a USD13.5 billion settlement that will resolve all major claims related to devastating wildfires blamed on its outdated equipment and negligence.

The settlement, which the utility said was reached on Friday, still requires court approval. PG&E said it is a key step in leading it out of Chapter 11 bankruptcy.

It adds that the settlement will resolve all claims arising from the 2017 Northern California wildfires and 2018 Camp Fire, as well as all claims from the 2015 Butte Fire and 2016 Ghost Ship Fire in Oakland.

“From the beginning of the Chapter 11 process, getting wildfire victims fairly compensated, especially the individuals, has been our primary goal,” Bill Johnson, PG&E Corporation’s CEO and president, said in a statement. “We want to help our customers, our neighbours and our friends in those impacted areas recover and rebuild after these tragic wildfires.”

The settlement is still subject to a number of conditions involving PG&E’s Chapter 11 bankruptcy reorganisation plans, which must be completed by June 30, 2020.

Friday’s settlement figure responds to pressure from Governor Gavin Newsom to give wildfire victims more than it originally offered, but it still relies on the bankruptcy judge’s approval as part of the proceedings. A February hearing at which an official estimation of losses will be made still looms for the utility and could upend any settlement deals.

“We appreciate all the hard work by many stakeholders that went into reaching this agreement,” Johnson said. “With this important milestone now accomplished, we are focused on emerging from Chapter 11 as the utility of the future that our customers and communities expect and deserve.”

PG&E said the proposed settlement is the third it has reached as it works through its Chapter 11 case. The utility previously reached a USD1 billion settlement with cities, counties and other public utilities and an USD11 billion agreement with insurance companies and other entities that have paid claims relating to the 2017 and 2018 fires.

A Pacific Gas & Electric sign outside of a PG&E building in San Francisco. PHOTO: AP