In a federal bankruptcy hearing on May 22, the Pacific Gas & Electric Co. was given an extension to propose a plan to emerge from its bankruptcy by Sept. 29, 2019.

The utility giant has been under the microscope for sparking some of the deadliest fires in the state’s history in 2017 and 2018, along with the 2015 Butte Fire. The company’s Jan. 29 bankruptcy filing cited at least $30 billion in potential liabilities for wildfires ignited by its transmission and distribution lines.

PG&E was originally asking for six months, spanning the entirety of wildfire season, but a push from Gov. Gavin Newsom and creditors sped the timeline up.

In a May 22 letter to the court, Newsom argued that “such a lengthy extension (was not) fair or equitable to the many California stakeholders negatively impacted by PG&E’s decision to file (for bankruptcy).”

It could also expose PG&E to the risk of unquantifiable post-petition claims from 2019 wildfires, the letter stated.

For reorganization to go forward, the utility’s plan has to be approved by 50% or more of the of PG&E’s creditors (vendors, bondholders, wildfire victims and more), at least 66.3% in dollar amount of those voting for reorganization and the bankruptcy judge. If the September deadline is not met, and a future extension is not granted, then anyone may work to file a plan for the company’s reorganization.

In response to the extension, the Official Unsecured Creditors’ Committee of PG&E said it “applauds the court’s decision allowing reasonable time parameters for PG&E to propose a plan for emergence from bankruptcy.”

The “tens of thousands of California laborers and pensioners, the nation’s largest producer of solar and wind energy and vendors that supply critical materials to PG&E” that the committee represents “stands to lose tens of billions of dollars absent a swift and equitable resolution to PG&E’s bankruptcy cases,” according to the committee.

“We also recognize that, for many, the human tragedy of last year’s wildfires could be compounded by the uncertainty around the bankruptcy process. The committee seeks a prompt resolution that treats wildfire victims and ratepayers fairly, ensures safe future operations and secures a viable, reorganized PG&E. We look forward to reviewing the utility’s reorganization plan and ensuring that unsecured creditors and wildfire victims are compensated in full.”

Gerald Singleton, of Singleton Law Firm, told the Enterprise May 23 that the firm, along with many other creditors in the case, have objected to any extension for PG&E to file a plan. He said that the company has failed to negotiate with creditors on establishing a fair plan for compensation.

“We understand that the court is going to approve this, but our concern is that we haven’t seen PG&E exercise diligence in talking with various stakeholders to get a plan approved,” Singleton said. “There’s been a great deal of frustration on all of our parts. We would like to see the judge hold their feet to the fire, (and) we will object to any other extensions.”

Singleton said the utility giant has been “dragging its feet” to get a taxpayer bailout from the state Legislature and a liability reduction “so the next time they start a fire they don’t have to pay full damages.”

Singleton added that he hopes PG&E will submit a plan for reorganization before the end of the year.

“If they don’t, we’re going to argue that the judge shouldn’t extend it and we can get a plan approved by a majority of creditors,” he said. If that happens, “Butte Fire victims have been waiting longest, (so) I think they should be at the head of the line.”

In those proceedings, PG&E also received approval to set aside $105 million for victims of wildfires the utility started in 2017 and 2018. Those were modeled off of a similar offer that was made to Butte Fire victims in 2015, according to Singleton.

He said the firm is still managing about 800 unresolved Butte Fire cases, and is representing thousands of victims of 2017 and 2018 wildfires caused by the utility.

More than 1,000 claims have yet to be settled for Butte Fire victims, based on numbers provided by PG&E spokeswoman Brandi Merlo. That number has not changed since the utility entered bankruptcy proceedings in January and halted all settlement offers.

“Our focus remains on supporting those affected by the Butte Fire in 2015,” Merlo said in an email May 23. “Under the Chapter 11 process, any Butte Fire settlements that have not been paid will be addressed in the bankruptcy case. We are committed to helping keep our customers and the communities we serve safe, and reducing the risk of wildfires.”

District 2 Supervisor Jack Garamendi told the Enterprise May 24 that he was disappointed with PG&E’s request for an extension to deliver a plan to settle with Butte Fire victims.

“The Butte Fire was over (three-and-a-half) years ago and there are many survivors who have not received their settlement from PG&E,” Garamendi said. “This leaves families in limbo, unable to rebuild their lives and their homes. I encourage the courts to ensure that those impacted by the negligence of PG&E be paid immediately. PG&E continues to pay their executives millions of dollars while my constituents live out cold and muddy winters in trailers. This is irresponsible, immoral and unacceptable.”



Davis graduated from UC Santa Cruz with a degree in Environmental Studies. He covers environmental issues, agriculture, fire and local government. Davis spends his free time playing guitar and hiking with his dog, Penny.

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