Regulators boost PG&E's wildfire fine to $2.1 billion

California power regulators slapped Pacific Gas and Electric with a $2.1 billion fine for igniting a series of deadly wildfires that landed the beleaguered utility in bankruptcy.

Posted: Feb 27, 2020 3:58 PM
Updated: Feb 28, 2020 8:46 AM

SAN FRANCISCO (AP) — California power regulators slapped Pacific Gas and Electric with a $2.1 billion fine for igniting a series a deadly wildfires that landed the beleaguered utility in bankruptcy.

The penalty adopted Thursday in a decision issued by an administrative law judge boosts the punishment that had been agreed upon in a $1.7 billion settlement announced in December.

The increased punishment includes a $200 million payment to California that will be earmarked for people who lost family members, homes and businesses in catastrophic wildfires caused by PG&E’s outdated electrical grid and negligence during 2017 and 2018. That money will supplement a $13.5 billion fund that the San Francisco company is setting up as part of its effort to emerge from bankruptcy protection by a June 30 deadline.

More than 81,000 claims have been filed in the bankruptcy case.

The decision will also prevent PG&E from attempting to recover $1.82 billion from its customers, forcing its shareholders to bear the cost instead. The settlement previously had prevented PG&E from recovering $1.63 billion.

RELATED: PG&E CEO blames past management for problems, promises fixes

The harsher punishment is the latest blow to PG&E, which has been trying to climb out of a huge financial hole left by its liabilities in the fires. The company filed for bankruptcy 13 months ago to seek shelter from more than $50 billion in claimed losses.

PG&E has settled those claims by reaching settlements totaling $25.5 billion with the wildfire victims, insurers and some government agencies.

But the company still faces some potentially imposing hurdles to clear, with California Gov. Gavin Newsom threatening to lead a government-led takeover bid of PG&E unless changes are made to its current plan for getting out of bankruptcy. PG&E needs state approval of the plan in order to qualify for coverage from a wildfire insurance fund created by California last summer.

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