PG&E reaches $11 billion deal with California wildfire insurers
SAN FRANCISCO - Pacific Gas & Electric and a group of insurers announced Friday they reached an $11 billion settlement to cover most of the claims from wildfires in California in 2017 and 2018.
The utility said in a statement the tentative agreement covers 85% of the insurance claims from fires that included the one that decimated the town of Paradise and killed 86 people.
A group of insurers said in a separate statement the settlement is well below the $20 billion the insurance companies had sought in bankruptcy court.
"While this proposed settlement does not fully satisfy the approximately $20 billion in group members' unsecured claims, we hope that this compromise will pave the way for a plan of reorganization that allows PG&E to fairly compensate all victims and emerge from Chapter 11 by the June 2020 legislative deadline," the insurers said.
The settlement still must be approved by a bankruptcy court.
"Today's settlement is another step in doing what's right for the communities, businesses, and individuals affected by the devastating wildfires," PG&E CEO Bill Johnson said in a statement.
PG&E Corp. on Monday released a plan to offer nearly $18 billion to wildfire victims, insurance companies and cities and public entities in California that battled wildfires sparked by its electrical equipment.
The plan, which must be approved by state regulators, proposed setting aside two trusts totaling $16.9 billion to pay victims and insurance companies. Another $1 billion will go toward local governments affected by the wildfires.
The company also proposed an $8.4 billion trust to pay claims to uninsured victims.
The San Francisco-based company is under deadline pressure to emerge from bankruptcy by June 2020 to participate in a state wildfire fund to help California's major utilities pay out future claims as climate change makes wildfires across the U.S. West more frequent and more destructive.
The utility sought bankruptcy protection in January because it said it could not afford an estimated $30 billion in potential damages from lawsuits stemming from recent wildfires.