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Bankruptcy judge okays PG&E restructuring plan timing, $105M wildfire fund


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Bankruptcy judge okays PG&E restructuring plan timing, $105M wildfire fund

Citing the "practical consequences" of his actions, Judge Dennis Montali, who is presiding over the joint bankruptcy proceeding of PG&E Corp. and Pacific Gas and Electric Co., or PG&E, will give the companies an additional four months to file a plan of reorganization.

Granting the extension, which is two months shorter than attorneys for California's largest utility and its parent company had requested, was "a signal to the debtors to get on with it," Montali said in a May 22 hearing at the U.S. Bankruptcy Court for the Northern District of California in San Francisco.

The extension aligns roughly with the California legislative session, which ends Sept. 13. Governor Gavin Newsom, who has expressed concerns over PG&E's leadership and the bankruptcy's impact on California's clean energy transition, would then have one month to sign or veto any bill affecting the debtors and their restructuring plan.

Newsom had proposed a shorter extension not to exceed 75 days.

Attorneys and executives of the companies have argued that they are unable to formulate a restructuring plan, including a strategy for paying claims from victims of wildfires linked to PG&E electric infrastructure, until the Legislature acts on wildfire liability reform.

'I don't think it's going to happen'

"I would be very surprised if PG&E gets this change in liability laws that they seem to be banking on," Gerald Singleton, an attorney representing wildfire victims, told Montali. "I don't think it's going to happen."

Some lawmakers have also expressed doubt about forthcoming legislation and its potential to address California's wildfire crisis. The Commission on Catastrophic Wildfire Cost and Recovery, created in 2018, is considering ways to distribute the costs of past and future wildfires sparked by the combination of climate change and hazardous utility electric infrastructure. A draft report from the commission is expected by the end of May.

Montali also indicated that he would approve the debtors' proposal for a $105 million wildfire fund to help communities ravaged by 2017 and 2018 wildfires linked to PG&E. The fund will focus on survivors most urgently in need of assistance, including those who lost homes and require temporary housing.

"I'll make sure that the process moves forward quickly," Montali said.