Dive Brief:
- Major investors in Pacific Gas & Electric (PG&E) on Monday filed a proposed plan of reorganization with the U.S. bankruptcy court in San Francisco, offering up $30 billion in capital including $16 billion to $18 billion earmarked for 2017 and 2018 wildfire claims, according to The Sacramento Bee.
- The plan would also rename the embattled utility "Golden State Power Light & Gas Co.," while the parent corporation would be known as "GSPL&G Corp."
- The proposal comes just days after Democratic California Gov. Gavin Newsom asked lawmakers to create a "liquidity fund" to help utilities deal with the costs of the state's wildfires. It would not, however, address existing claims.
Dive Insight:
The utility's creditors have been quietly floating their plan for weeks, and said the utility has "wasted crucial time needlessly," according to The Sacramento Bee.
To gain support for their proposal, PG&E's bondholders have also offered spots on PG&E's board of directors to employee and consumer advocates.
PG&E filed for bankruptcy in January after facing up to $30 billion in wildfire liabilities. A contributing factor was the state's strict inverse condemnation rules, which can hold a utility liable for fire damages even if they are not found to have operated negligently.
Creditors of PG&E recently endorsed the recommendations of California's Commission on Catastrophic Wildfire Cost and Recovery, including reforming the state's inverse condemnation liability rules and developing a wildfire fund.
The wildfire fund proposed by Newsom would aim to give utilities better access to capital to address costs, and would be funded by $10 billion in bonds issued by the state's Department of Water Resources. Utilities could be asked to contribute $7.5 billion.
PG&E has been making progress on wildfire issues. The utility last week reached a $1 billion settlement with 18 cities, counties, districts and public agencies, that were impacted by the 2015 Butte Fire, 2017 Northern California wildfires and 2018 Camp Fire.
