Dive Brief:
- A U.S. Bankruptcy Court judge on Wednesday delayed consideration of a bid to end Pacific Gas & Electric's (PG&E) period of exclusivity, when only the company is able submit a reorganization plan, and instead set a hearing for Aug. 13 on the bondholders' motion.
- PG&E has until Sept. 29 to submit a plan to exit bankruptcy, but according to Bloomberg its creditors are worried that would not leave sufficient time to access a new $21 billion wildfire assistance fund.
- The fund, approved by lawmakers just this month, would help utilities cover wildfire damage liabilities. PG&E filed for bankruptcy in January after facing up to $30 billion in wildfire liabilities.
Dive Insight:
PG&E bondholders and insurers have each developed plans that could leave them owning a substantial portion of the company, according to Associated Press. But following Judge Dennis Montali's decision, they will have to continue waiting before those can be presented.
The judge's decision followed calls by California Gov. Gavin Newsom, D, to allow PG&E time to submit a plan.
Last month, major PG&E investors filed a proposed reorganization plan that offered $30 billion in capital including $16 billion to $18 billion earmarked for 2017 and 2018 wildfire claims. Insurers say they are owed $20 billion and propose some of those claims be converted to stock.
The plan would also rename the utility "Golden State Power Light & Gas Co.," while the parent corporation would be known as "GSPL&G Corp."
Each plan could result in the creditors taking a majority stake in the company, AP reports.
A group of investors represented by PJT Partners said the bankruptcy court judge made the correct decision, which would allow PG&E and its stakeholders to "work towards the development of a framework through which PG&E will determine the most appropriate plan sponsorship and financing proposal."
"This is an important step towards allowing PG&E to conduct a transparent, fair and equitable financing process to help it emerge from Chapter 11," Steve Zelin, a partner with PJT, said in a statement.
California's new liquidity fund for wildfire claims will be funded half by utility shareholders and half by customers through a $2.50 monthly charge on bills that has been in place since the state's energy crisis, and was originally scheduled to expire.
