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PG&E bankruptcy filing proposes board refresh, regionalization of operations

Beleaguered utility company PG&E Corp. plans to revamp its board of directors, regionalize its operations and bring in more safety expertise as part of its restructuring through the bankruptcy process, the company said in a Jan. 31 release.

PG&E on Jan. 31 submitted its Chapter 11 reorganization plan testimony to California regulators and updated the company's reorganization plans in bankruptcy court. In these filings, the company said it would be "refreshing" the boards of directors at both PG&E Corp. and subsidiary utility Pacific Gas and Electric Co. to "have the necessary expertise and skills" to manage the post-bankruptcy-proceeding operations.

Meanwhile, the company laid out a plan to regionalize its operations and infrastructure, aiming to become more locally focused.

"We're submitting a plan to create local operating regions that place leadership and operations closer to our customers. Each region will be led by an officer of the utility who 2 will be charged with understanding and addressing local customer service, reliability and safety needs, and each region will have its own safety officer focused on public and workforce safety," the company said in its testimony. "Our blueprint for emerging from bankruptcy changed for the better."

California Gov. Gavin Newsom had said that a previous restructuring plan fell "woefully short" of the requirements of a 2019 state law, Assembly Bill 1054, which set a June deadline for PG&E to exit bankruptcy protection in order to participate in a $21 billion state fund to cover damages from future wildfires.

The company's bankruptcy plan is "on track to be confirmed by June 30 so PG&E can pay victims and participate in the state's go-forward wildfire fund," PG&E Corp. said in its Jan. 31. release.

PG&E Corp. also plans to pay more than $25 billion to wildfire victims, the release noted.

The company said it would appoint an independent safety adviser once the court-appointed federal monitor's period of service ends, and ensure that the company has a chief risk officer and chief safety officer reporting directly to the corporation's CEO. PG&E Corp. plans to set up an independent safety oversight committee comprising non-PG&E personnel to assess the company's practices, particularly related to safety and compliance.

Executive compensation will also become more connected to safety performance, the company said.