CALIFORNIA - PG&E has announced it has emerged from Chapter 11, saying it successfully completed its restructuring process and implementing its "Plan of Reorganization".
“Compensating these victims fairly and quickly has been our primary goal throughout these proceedings, and I am glad to say that today we funded the Fire Victim Trust for their benefit,” said Interim Chief Executive Officer, PG&E Corporation, Bill Smith. “This is an important milestone, but our work is far from over.”
The utility said this is in an important milestone on several fronts:
- PG&E has implemented the settlement and resolution of all wildfire claims pursuant to the Plan
- PG&E has elected to participate in the State’s go-forward wildfire fund
- PG&E Corporation has seated its new Board of Directors
- PG&E is moving forward with commitments regarding its governance, operations, and financial structure to further prioritize safety
- As a result of the Chapter 11 proceedings, PG&E has retired expensive, high-coupon debt and replaced it with lower-cost debt, yielding significant annual savings for customers over the duration of the debt, estimated to be approximately $250 million annually
As outlined in the utility's bankruptcy plan, PG&E says it has now funded the Fire Victim Trust established to "satisfy the claims of individual wildfire victims and others."
In addition to the Fire Victim Trust, PG&E says it has also funded two additional wildfire settlements, paying approximately $1 billion to meet wildfire claims of certain public entities, as well as $1 billion to insurance companies and others that paid claims by individuals and businesses.
"[The July 1] announcement also confirms PG&E’s participation in California’s go-forward wildfire fund established by AB 1054," the utility said in a press release. "PG&E today deposited approximately $5 billion in the Wildfire Fund, representing PG&E’s initial and first annual contributions."
The utility has also implemented commitments to enhance safety and its ability to serve its customers:
- Supported the CPUC's enactment of measures to strengthen PG&E's governance and operations, including enhanced regulatory oversight and enforcement that provides course-correction tools as well as stronger enforcement if it becomes necessary
- Began hosting a state-appointed observer to provide the state with insight into PG&E’s progress on safety goals
- Appointing an independent safety monitor when the term of the court-appointed Federal Monitor expires
- Establishing newly expanded roles of Chief Risk Officer and Chief Safety Officer, with both reporting directly to the PG&E Corporation CEO
- Formed an Independent Safety Oversight Committee to provide independent review of operations, including compliance, safety leadership, and operational performance
- Assumed all collective bargaining agreements with labor unions, pension obligations, and other employee obligations, and all power purchase agreements and Community Choice Aggregation servicing agreements
- Reformed executive compensation to further tie it to safety performance and customer experience
- A commitment that PG&E Corporation will not reinstate a common stock dividend until it has recognized $6.2 billion in non-GAAP core earnings
- Filed a proposal with the CPUC requesting a rate-neutral $7.5 billion securitization transaction after PG&E emerges from Chapter 11 in order to finance costs in an efficient manner that benefits customers and accelerates payment to wildfire victims
- Committing not to seek recovery in customer rates of any portion of the amounts that will be paid to victims of the 2015, 2017, and 2018 wildfires under the Plan when PG&E emerges from Chapter 11 (except through the rate-neutral securitization transaction)
PG&E has also introduced its newly appointed Board of Directors.