Newsom rejects PG&E plan to pay fire victims, exit bankruptcy - East Bay Times

In a stunning rebuke to PG&E Corp., Gov. Gavin Newsom late Friday rejected the utility’s plan to pay Northern California wildfire victims and exit bankruptcy.

In a letter to PG&E Chief Executive Bill Johnson, California’s governor declared that the company’s proposal doesn’t go far enough to make it “positioned to provide safe, reliable and affordable service.”

“The resolution of this bankruptcy must yield a radically restructured and transformed utility that is responsible and accountable,” he wrote. Among other things, he demanded an entirely new slate of directors who are subject to state approval, and a structure that would allow PG&E’s operating license to be transferred “to the state or a third-party when circumstances warrant.”

Just a week ago, PG&E announced what it believed was a breakthrough that would ease its way out of bankruptcy: a $13.5 billion settlement agreement with lawyers for more than 70,000 wildfire victims

But the deal with victims didn’t end the bankruptcy drama. According to AB 1054, signed into law by Newsom, PG&E needs to exit Chapter 11 by June 30 in order to participate in a new $21 billion insurance pool to help utilities pay for damages from future wildfires.

Among other things, AB 1054 says PG&E’s bankruptcy exit plan must include a ramped-up program for preventing new fires as well as fair treatment for past victims to make the utility eligible for the insurance pool, which is to be funded by ratepayers and shareholders.

Now, the utility will have to scramble to overhaul its reorganization. Company officials weren’t immediately available for comment.

Newsom had been demanding a massive overhaul of PG&E following a series of deliberate “public safety power shutoffs” in October, in which the utility blacked out hundreds of thousands of Northern California homes during severe windstorms and still couldn’t prevent the Kincade Fire in Sonoma County from igniting.

When Johnson argued it might take a decade to harden PG&E’s grid to the point that deliberate blackouts would no longer be needed, Newsom reacted with fury: “It doesn’t take a decade to fix this damn thing,” he said in late October. He promised to force the utility to “do something radically different,” and teased out the possibility of a state takeover.

Newsom cited the October fire and blackouts in his letter to the CEO.

“PG&E’s recent management of the public safety power shutoffs did not restore public confidence,” he wrote. “For too long, PG&E has been mismanaged, failed to make adequate investments in fire safety and fire prevention, and neglected critical infrastructure.”

But PG&E’s $13.5 billion agreement with wildfire victims, announced Dec. 6, altered the landscape considerably. PG&E now had a powerful and sympathetic ally — the roughly 70,000 victims of the 2015 Butte Fire, the 2017 wine country fires and last year’s Camp Fire, which destroyed most of Paradise and killed 85 people. The deal includes settlements with victims of the Ghost Ship disaster in Oakland and the 2017 Tubbs Fire, the deadliest of the wine country fires, even though state investigators cleared PG&E in the Tubbs Fire.

PG&E had previously made deals to pay local governments $1 billion and reimburse fire victims’ insurance companies to the tune of $11 billion.

PG&E filed an amended bankruptcy reorganization plan late Thursday encapsulating all of the settlements. It said its plan is “fully financeable” and has the backing of a group of hedge funds that control much of the company’s stock.

“We believe our plan is the best solution for all constituencies, and we look forward to bringing these complex proceedings to their conclusion,” Johnson said in a prepared statement announcing the new bankruptcy plan. “In the meantime, we continue to make meaningful changes and additional investments throughout the company to reduce the risk of wildfire and help us continue to deliver safe, reliable energy to our customers.”

The utility also released statements of support from, among others, renowned environmental advocate Erin Brockovich, who made her reputation crusading against environmental problems caused by PG&E decades ago and led a demonstration at the state Capitol shortly after the Camp Fire, demanding greater state oversight of the utility. She said PG&E’s bankruptcy proposal will “fairly and justly compensate wildfire victims in a timely manner” and commits the company to fire safety.

PG&E had been on the defensive for months after a group of bondholders made their own alliance with wildfire victims and mounted a hostile takeover bid for the utility. The bondholders, led by Wall Street hedge fund Elliott Management, have insisted their takeover plan is still better for California and said PG&E’s proposal would burden the company with billions in new debt.

With Newsom rejecting PG&E’s plan, the bondholders’ effort gets new life.

In addition, a consortium of local officials led by San Jose Mayor Sam Liccardo has been trying to engineer a customer-owned buyout of PG&E. Liccardo says a customer-owned structure would save money for ratepayers and free up more money for wildfire safety and grid reliability.

Let's block ads! (Why?)

"fire" - Google News
December 14, 2019 at 10:54AM
https://ift.tt/2rC1wjX

Newsom rejects PG&E plan to pay fire victims, exit bankruptcy - East Bay Times
"fire" - Google News
https://ift.tt/2rPfnCQ
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update

Bagikan Berita Ini