PG&E, California Reach $1.7 Billion Deal on Fire Penalties
The deal, which still needs to be approved by the commission, eliminates some overhang for PG&E.
(Bloomberg) -- California utility regulators have reached a settlement with PG&E Corp. over violations tied to catastrophic wildfires ignited by the company’s power lines in 2017 and 2018.
The proposed settlement would bar PG&E from recovering $1.625 billion in wildfire-related costs from ratepayers and would have the company spending $50 million for system enhancements and community engagement, according to the California Public Utilities Commission.
The deal, which still needs to be approved by the commission, eliminates some overhang for PG&E. The company was forced into bankruptcy in January after its equipment was found to have ignited deadly wildfires in 2017 and 2018, saddling it with an estimated $30 billion in liabilities. PG&E has already set aside the vast majority of the funds it would need to cover the penalties, people familiar with the situation said in November.
“We remain deeply sorry about the role our equipment had in tragic wildfires in recent years, and we apologize to all those affected,” Bill Johnson, PG&E’s chief executive officer, said in a statement. “This settlement agreement underscores our commitment to learning from the past and doing what’s right for safety in the future.”
PG&E is facing much larger challenges in resolving its wildfire liabilities in bankruptcy court. The company is trying to get the court’s sign-off for a $13.5 billion agreement to compensate people who lost homes and loved ones in the fires. It is also working to gain approval of an $11 billion settlement with wildfire insurers. The judge overseeing PG&E’s Chapter 11 case was expected to rule on both of those settlements late Tuesday.
The enforcement division of California’s utility commission and PG&E had already said that they had reached an agreement in principle on the penalty case, but they hadn’t previously disclosed the details of the arrangement.
The settlement covers wildfires that occurred in 2017, as well as the 2018 Camp fire, which was the deadliest in state history.
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To contact the reporter on this story: David R. Baker in San Francisco at dbaker116@bloomberg.net
To contact the editor responsible for this story: Lynn Doan at ldoan6@bloomberg.net
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