PG&E Wins Approval of $105M Wildfire Assistance Fund

Volunteer rescue workers search for human remains in the rubble of homes burned in the Camp Fire in Paradise, Calif., Thursday, Nov. 15, 2018. Dozens of people died in the nation’s deadliest wildfire in a century. (AP Photo/Terry Chea)

SAN FRANCISCO (CN) – A bankruptcy judge approved Pacific Gas and Electric’s plan for a $105 million assistance program for wildfire victims Wednesday, despite objections that the funding falls short of what’s needed to help those most in need.

Robert Julian, a lawyer for wildfire victims, argued the program needs at least $313 million to cover immediate living costs for those who lost homes in wildfires caused by PG&E equipment over the last two years. Anything short of that would create “chaos” and “division among former neighbors” fighting over limited funds, he said.

U.S. Bankruptcy Judge Dennis Montali told Julian that he lacks authority to make PG&E increase the amount it voluntarily agreed to put into the program.

“I have two choices today: approve the plan or disapprove it,” Montali said.

Julian also questioned PG&E’s motives, suggesting the relief fund is merely “an operating expense” that will help buy the company goodwill with state lawmakers and a federal judge overseeing its probation in a criminal case over the 2010 San Bruno pipeline explosion.

“They are not doing this out of the goodness of their heart,” Julian said.

Montali replied that the company’s motives are irrelevant.

“We have people suffering right now for what happened in November,” Montali said, referring to the 2018 Camp Fire that killed 85 people and burned 18,804 buildings. “The faster we can get this process moving, the better.”

The judge also refused to set up the fund in a way that would exempt assistance payments from counting towards wildfire victims’ claims for damages against PG&E.

“If money is paid to a victim, there has to be some credit for it on account of a claim that that victim has,” Montali said.

The program administrator must also consider insurance payments and federal assistance money when disbursing relief funds to victims. Otherwise, the Federal Emergency Management Agency could seek to claw back money if there is a “duplication of assistance,” Department of Justice lawyer Matthew Troy told the judge.

Montali asked PG&E and the committees representing interested parties in the bankruptcy case to select a program administrator and create guidelines for the program within five days.

PG&E’s new CEO Bill Johnson, who started May 1, said in a statement that the relief program shows the company is committed to helping wildfire victims rebuild and recover.

“We feel strongly that helping these communities in their time of need is the right thing to do and appreciate the court’s decision,” Johnson said in a statement Wednesday.

Also on Wednesday, Montali granted PG&E’s motion to extend the 180-day period in which it is entitled to exclusively propose a plan for reorganizing the company and paying off its debts. However, the judge limited the extension to four months, instead of granting the full six months requested by PG&E.

California Gov. Gavin Newsom had asked the judge to grant no more than a 75-day extension, arguing a longer delay would “send the wrong message” by allowing PG&E to “continue a business-as-usual approach” with no accountability. Dragging out the bankruptcy case would benefit PG&E shareholders to the determinant of wildfire victims, Newsom’s lawyers wrote in an opposition brief to the court.

PG&E said it needed the extension because state lawmakers could pass new laws later this year that will affect its future wildfire liability and decisions about reorganization and paying off debts.

Montali extended the exclusivity period until Sept. 28, adding he will reconsider that decision if other groups come forward with a viable reorganization plan for PG&E.

Last week, state fire investigators faulted PG&E’s power equipment as the cause of last year’s deadly Camp Fire that burned more than 18,000 buildings and decimated the town of Paradise.

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