PG&E’s future is in doubt after Newsom rejects bankruptcy plan
Gov. Gavin Newsom on Friday rejected Pacific Gas & Electric’s proposal to pull itself out of bankruptcy, saying its reorganization plan falls “woefully short” of safety requirements set under state law and demanding the company make major changes if it wants to access billions of dollars in a fund to pay wildfire claims.
The move complicates PG&E’s ability to remain in control of the company in a bankruptcy process that has seen financial interests vying to take over and local politicians preparing models for an entirely new utility. PG&E triggered the bankruptcy in January citing an estimated $30 billion in financial liabilities from California wildfires sparked by its equipment.
“In my judgment, the amended plan and the restructuring transactions do not result in a reorganized company positioned to provide safe, reliable, and affordable service to its customers, as required by AB 1054,” Newsom wrote in a letter to PG&E. “The state remains focused on meeting the needs of Californians including fair treatment of victims – not on which Wall Street financial interests fund an exit from bankruptcy.”
Newsom’s approval was not required under state law, but PG&E asked the governor to weigh in after reaching a $13.5-billion settlement with victims of some of California’s worst wildfires on record last week.
The request was a political gamble for the company, which gave Newsom and his team of advisors five days to review whether the proposal fulfilled the requirements of a new state law that allows utilities that meet certain ...
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