PG&E, Fire Victims Await Decision From Governor Newsom

KCBS Radio Afternoon News
December 13, 2019 - 11:28 am
California Gov. Gavin Newsom speaks during a news conference at the California State Capitol on March 13, 2019 in Sacramento, California.

Justin Sullivan/Getty Images

Categories: 

Governor Newsom must decide today whether or not to approve PG&E's $13.5 billion settlement with a committee representing fire victims. The settlement was announced Friday and is a key part of the company’s reorganization plan to emerge from bankruptcy.

“There are definitely things in this deal that might make the governor a little bit concerned. For example it will leave PG&E with a lot of debt coming out of bankruptcy,” says UC Hastings law professor Jared Ellias, who teaches corporate bankruptcy law. “Perhaps the governor isn’t sure that $13.5 billion for the individual wildfire victims is the right number.”

The money would be paid out to victims of the 2015 Butte Fire, 2017 North Bay wildfires and the 2018 Camp Fire that destroyed much of the town of Paradise. The company has also agreed to pay victims of the 2017 Tubbs Fire and the 2016 Ghost Ship warehouse fire, even though state investigators have not found PG&E responsible for those fires.

If the governor approves the settlement it will help PG&E avoid two major obstacles to bounce back from bankruptcy.PG&E disclosed Monday it would allow the company to bypass a state trial in January about its liability in the Tubbs Fire and a federal hearing to estimate all of its total liabilities in the bankruptcy case.

“If Governor Newsom were to sign off on it today, it would indicate that the political branches in California are probably on board with this plan and it really clears a pathway for this company to leave bankruptcy,” says Ellias.

U.S. Bankruptcy Judge Dennis Montali and the California Public Utilities Commission will also need to sign off on the settlement before it can be finalized.