SAN FRANCISCO (AP) – A federal bankruptcy judge on Tuesday approved two Pacific Gas & Electric settlements totaling $24.5 billion to help pay the losses suffered by homeowners, businesses and insurers in the aftermath of catastrophic Northern California wildfires that sent the nation’s largest utility into a financial morass.
The decision by U.S. Bankruptcy Judge Dennis Montali at the end of a five-hour court hearing bolsters PG&E’s chances of following its preferred path for getting out of bankruptcy by a make-or-break June 30 deadline. Montali also handed the utility another victory by rejecting attempts by a competing group to offer an alternative proposal to steer PG&E out of bankruptcy instead of the company’s plan.
Despite the strides made Tuesday, PG&E still faces huge obstacles.
The most significant is California Gov. Gavin Newsom’s recent conclusion that PG&E’s plan to emerge from bankruptcy doesn’t comply with state law, which the company must do to qualify for coverage in a wildfire fund approved by the California Legislature.
The company’s plan relies on coverage from the fund created last summer to insulate PG&E and other utilities from losses caused by future wildfires that could be ignited by their transmission lines. That specter looms large, given that PG&E’s outdated equipment and managerial negligence has been blamed for the series of deadly wildfires that raged through Northern California in 2017 and 2018, killing dozens.