California fire victims take in details during presentation of $13.5 billion settlement with PG&E
Denny Kat-Kuoy, whose Fountaingrove home was one of more than 4,600 homes destroyed by the Tubbs fire in October 2017, is among tens of thousands of Californians waiting for a piece of $13.5 billion payback fund that PG&E and wildfire victims’ attorneys agreed upon last week in a tentative settlement.
Kat-Kuoy, 51, sat in a conference room Sunday at the Hyatt Regency Sonoma Wine Country hotel with two of his three children. At the front of the room, attorney James Frantz explained how billions in cash and stock would flow from the utility over the next several years to between 35,000 and 60,000 wildfire victims PG&E agreed to compensate - a key step for the utility facing an estimated $30 billion of liabilities for several recent wildfires as it tries to exit its bankruptcy proceedings.
For Frantz and other attorneys who outlined the deal in two presentations Sunday afternoon, the massive settlement sent a message of accountability to PG&E, which couched the deal as a milestone toward becoming a utility company that its customers deserve. And Kat-Kuoy, a single father, hopes his share of the settlement will make up for insufficient insurance coverage, allowing his family to move from their one-bedroom apartment into their rebuilt Fountaingrove home on Hanover Place sometime next year.
“Overall, I feel OK,” said Kat-Kuoy, a medical device engineer who commutes several hours each day between Santa Rosa and Santa Clara. “We have something - better than nothing. The number, it sounds big, but we need to know all the details.”
Friday’s settlement, which needs approval from a federal bankruptcy judge, is meant to address the claims of individuals who sustained losses from the October 2017 wildfires - including the Tubbs fire - and the Camp fire of 2018, the “Ghost Ship” Oakland warehouse fire of 2016 and the Butte fire of 2015, according to PG&E. Though PG&E’s equipment has been linked to the Camp fire and numerous other recent blazes, a PG&E spokesman said the utility still “does not admit fault” for the Tubbs and Ghost Ship fires, which fire investigators have traced to private electrical systems and which killed 58 people combined.
The recent deal followed a $1 billion settlement that included $415 million to about a dozen North Bay governments including Santa Rosa and Sonoma County and a separate $11 billion agreement with insurance companies that paid out claims for 2017 and 2018 wildfires.
These deals to settle wildfire-related claims are important for PG&E, which aims to finalize its bankruptcy proceedings by June 30 to access a $21 billion state wildfire fund Gov. Gavin Newsom approved in July. The legislation creating the fund makes money available to PG&E only after the utility “has paid substantially all third-party liability claims” related to recent wildfires.
Calls for PG&E to be taken over or broken up over have mounted in recent months, including after the utility’s equipment malfunctioned in northern Sonoma County shortly before the nearby ignition of the Kincade fire, which burned some 77,000 acres and destroyed or damaged several hundred homes and buildings. Frantz characterized the settlement as a way to hold PG&E accountable for the utility’s “egregious misconduct” in failing to make sure its electric infrastructure was safe.
“They’re not going to be ‘PG&E’ any more if they fall down again,” Frantz said.
PG&E’s CEO, Bill Johnson, said in a statement announcing the settlement that the company’s “primary goal” through its bankruptcy process has been “getting wildfire victims fairly compensated” and acknowledged that “there have been many calls for PG&E to change in recent years.”
“PG&E’s leadership team has heard those calls for change, and we realize we need to do even more to be a different company now and in the future,” Johnson said in a statement. “We recognize we need to deliver safe and reliable energy service every single day - we’re determined to do just that.”
The billions in settlement dollars, half in cash and half in stock, are months away from beginning to make their way to wildfire victims. Attorneys told victims Sunday they were confident the deal would be approved, but they acknowledged they weren’t sure exactly how many ways the money would be split, how much each person would receive or when they would receive their compensation.
Caroll Chase, a 69-year-old former resident of the Journey’s End mobile home park whose home was destroyed in the Tubbs fire, said he wasn’t hoping to get rich off the settlement deal. He likes his new home, an apartment off Guerneville Road near a grocery store, and he’s not upset about waiting a few years to see any settlement cash.
“We will get something for our pain and suffering,” he said.
You can reach Staff Writer Will Schmitt at 707-521-5207 or firstname.lastname@example.org. On Twitter @wsreports.