PG&E Corp. may set up a $105 million housing fund for victims of 2017 and 2018 wildfires in California, which set records for devastation and were blamed on the utility’s equipment, the judge overseeing the bankruptcy of the investor-owned power producer ruled on Wednesday.
Creditors, which include wildfire victims, are fighting for funds as PG&E navigates bankruptcy stemming from the blazes and as the state plans for increasingly long and dangerous fire seasons its officials attribute to climate change.
U.S. Bankruptcy Judge Dennis Montali at a hearing approved a motion by PG&E seeking permission to establish the fund for people who lost homes in the fires and were uninsured or have used up or will exhaust their insurance.
San Francisco-headquartered PG&E sought Chapter 11 bankruptcy protection in January in the face of liabilities it estimated at over $30 billion in the aftermath of November’s Camp Fire, California’s deadliest and most destructive wildfire in modern times.
The Camp Fire killed more than 85 people and destroyed more than 14,600 houses, mobile homes and other housing units, according to California’s Department of Finance.
More than 11,000 of those housing units were lost in the town Paradise, which the Camp Fire leveled.
State fire investigators earlier this month formally determined PG&E’s power lines caused the Camp Fire, the world’s most expensive natural disaster of 2018 with overall losses of $16.5 billion, according to reinsurance company Munich Re.
Montali said at Wednesday’s hearing he wants to see PG&E’s proposed fund up and running as quickly as possible and urged the company and committees for its unsecured creditors and wildfire victims to try to agree on a fund administrator in five days.
“I’ll make sure the process moves forward quickly,” Montali said, adding he would appoint an administrator if PG&E and the committees could not agree on one.
The administrator will develop eligibility requirements and make payments to wildfire victims, PG&E has said in court papers.
According to PG&E, the $105 million for its fund will come from its available cash. The company’s shares were up 3.6% at $19.12 late on Wednesday afternoon.
Lawyers for the wildfire victims had urged a fund of at least $250 million, but Montali said he could only approve or deny PG&E’s motion for its proposed fund.
Montali also approved extensions to PG&E’s so-called exclusive periods in which it is the sole party in its bankruptcy entitled to file a reorganization plan and to seek support for it from stakeholders.
Montali approved four-month extensions urged by PG&E’s unsecured creditors committee instead of the six months the company wanted.
PG&E now has until Sept. 29 to file a plan and until Nov. 29 to round up support for it.
California Governor Gavin Newsom’s office had argued extensions should be capped at 75 days to push PG&E to quickly settle wildfire claims and craft a reorganization plan seeking sacrifices from its investors instead of ratepayers.
The committee for wildfire victims had objected to any extensions, arguing PG&E has been stalling for time.
PG&E said the stability of its business would be undermined without more time, adding it needed extensions to determine liabilities it faces from wildfires.
The company also said it needed more time to see if it obtains regulatory and legislative relief from state officials.
They are considering changes to California’s strict liability standard for utilities, which are held accountable for damages caused by their equipment even if negligence was not involved.
(Reporting by Jim Christie in San Francisco Editing by Peter Henderson and Matthew Lewis)
Was this article valuable?
Here are more articles you may enjoy.