Bankrupt PG&E reaches $13.5 billion settlement with California wildfire
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[December 07, 2019]
By Bhargav Acharya
(Reuters) - California's bankrupt power producer PG&E Corp <PCG.N> said
on Friday it had reached a $13.5 billion settlement with victims of some
of most devastating wildfires in the state's modern history.
The agreement helps smooth the way for the beleaguered company to emerge
from bankruptcy. It filed for Chapter 11 protection in January, citing
potential liabilities in excess of $30 billion from wildfires in 2017
and 2018 linked to its equipment.
"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," Chief Executive Officer Bill
Johnson said in a statement.
State fire investigators in May determined that PG&E transmission lines
caused the deadliest and most destructive wildfire on record in
California, the wind-driven Camp Fire that killed 85 people in and
around the town of Paradise last year.
They likewise concluded that PG&E power lines had sparked a separate
flurry of wildfires that swept California’s wine country north of San
Francisco Bay in 2017.
The agreed settlement is subject to a number of conditions and requires
confirmation by the United States Bankruptcy Court, the company said.
It faces a tight deadline as it needs to exit bankruptcy by June 30,
2020 to participate in a state-backed wildfire fund that would help
reduce the threat to utilities from wildfires.
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PG&E works on power lines to repair damage caused by the Camp Fire
in Paradise, California, U.S. November 21, 2018. REUTERS/Elijah
"We share the state's focus on helping mitigate the risk of future
wildfires and we will continue to do everything we can to help
reduce those risks across our system," Johnson said in the
PG&E had previously reached a $1 billion settlement with cities,
counties and other public entities and an $11 billion agreement with
insurance carriers related to the wildfires.
It has come under renewed criticism this year for precautionary
power outages to guard against the risk of wildfires posed by
extremely dry and windy weather.
Governor Gavin Newsom, state regulators and consumer activists have
lambasted the actions as being too broad, with Newsom blaming PG&E
for doing too little to properly maintain and secure its power lines
against wind damage.
Utility executives have acknowledged room for improvement while
defending the sprawling cutoffs as a matter of public safety.
(Reporting by Bhargav Acharya in Bengaluru; Editing by Edwina Gibbs)
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