SAN FRANCISCO (CN) – In its second major settlement over wildfire claims, Pacific Gas and Electric agreed Friday to pay $11 billion to insurers that covered losses for Northern California wildfires in 2017 and 2018.
“Today’s settlement is another step in doing what’s right for the communities, businesses, and individuals affected by the devastating wildfires,” PG&E CEO and President Bill Johnson said in a statement Friday.
PG&E previously struck a $1 billion settlement in June with 18 cities, counties, districts and public agencies to cover taxpayer losses associated with the fires.
The latest settlement represents 55% of the $20 billion insurers were seeking. The Ad Hoc Subrogation Group, which represents about 85% of insurers with claims against PG&E, said it wants this deal to help facilitate a fair and timely plan for PG&E to exit bankruptcy.
“We hope that this compromise will pave the way for a plan of reorganization that allows PG&E to fairly compensate all victims and emerge from Chapter 11 by the June 2020 legislative deadline,” the subrogation group said in a statement.
The company declared bankruptcy earlier this year as it faced a potential $30 billion in liability stemming from the 22 fires allegedly caused by its negligent maintenance of equipment and vegetation around power lines in 2017 and 2018.
PG&E is under pressure to exit bankruptcy by June 30, 2020, so it can access a $21 billion wildfire insurance fund established by the California Legislature earlier this year.
The company filed a plan to pay off its debt in bankruptcy court earlier this week. That plan would cap compensation for fire victims at $18 billion. A federal judge also said in court this week that he will use experts to estimate PG&E’s total wildfire liability for its bankruptcy case.
Last month, a federal bankruptcy judge authorized a state court jury to decide if PG&E should be held liable for the 2017 Tubbs Fire, which CalFire found was caused by a “private electrical system” and not PG&E equipment. Fire victims dispute those findings.
A hearing on a motion to expedite the Tubbs Fire trial is scheduled for Monday in state court. If approved, the trial is expected to start in January.
As PG&E works to resolve wildfire claims, the company’s CEO said the utility remains focused on providing safe and reliable service to 16 million customers, improving infrastructure and supporting California’s clean energy goals.
“We are committed to becoming the utility our customers deserve,” Johnson said.
The settlement requires approval by a federal bankruptcy judge.