Fire victims disappointed with PG&E bankruptcy plan
SAN FRANCISCO — PG&E Corp. proposed Monday to resolve its bankruptcy case by offering nearly $18 billion to settle claims from devastating wildfires started by its equipment in recent years — an amount immediately criticized by victims who said less than half of that is intended for them.
The preliminary plan filed in federal court is part of its effort to exit from Chapter 11 bankruptcy protection by next year.
PG&E sought the protection in January because it said it could not afford billions in damages from wildfires in 2017 and 2018 that were caused by company equipment. That included the Camp fire in November — the deadliest blaze in California history — that killed 86 people and largely destroyed the Butte County town of Paradise.
Cal Fire concluded this year that private equipment sparked the 2017 Tubbs fire that destroyed some 4,600 homes in Sonoma and Napa counties, killing 22 people; but victims of that inferno say Cal Fire got it wrong, and they have filed a civil case seeking to hold PG&E liable for damages.
The company said in court papers it was confident it could raise more than $30 billion in debt and equity financing from the largest banks in the nation. The strategy would not result in rate increases for its customers, PG&E said.
“Under the plan we filed today, we will meet our commitment to fairly compensate wildfire victims and we will emerge from Chapter 11 financially sound and able to continue meeting California’s clean energy goals,” CEO and President Bill Johnson said in a statement.
PG&E is under deadline pressure to emerge from bankruptcy by June 2020 in order to participate in a state wildfire fund to help California’s major utilities pay future claims as climate change makes wildfires across the U.S. West more frequent and more destructive.
The plan, which must be approved by state regulators, proposes 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.
PG&E’s plan was blasted by fire victims.
In its proposal, the company would provide no more than $8.4 billion in compensation for tens of thousands of people and businesses with losses from 19 different wildfires, including the massively destructive 2017 Tubbs and the 2018 Camp fires.
“The proposal is just a fraction of what wildfire victims need to rebuild their lives,” said Santa Rosa resident Patrick McCallum, a lobbyist and co-chairman of wildfire victims group Up from the Ashes.
McCallum and his wife, Sonoma State University President Judy Sakaki, lost their Fountaingrove neighborhood home in the Tubbs fire. They were forced to give up their plans to rebuild the home and resell it because of cost of construction far outpaced their insurance coverage, McCallum said.
PG&E is “playing hardball with victims and it’s tragic since they caused the damage that these victims are suffering,” McCallum said.
An attorney for the committee of wildfire victims involved in the bankruptcy case said she thinks they are owed far more, and will urge the committee to oppose the plan.
“Huge disappointment in their attitude toward compensating victims of the fires,” Cecily Dumas said of California’s largest utility.