SAN FRANCISCO – Pacific Gas & Electric has emerged from a controversial bankruptcy case that began after its long-neglected power grid ignited wildfires in California that killed more than 100 people.
The nation’s largest tool announced Wednesday that it came from Chapter 11 bankruptcy and paid $ 5.4 billion in initial funds and 22.19% of its stock to a fire victims’ fire trust caused by its outdated equipment.
“This is an important milestone, but our work is far from over,” Bill Smith, PG&E
interim CEO, said in a statement. “Our rise from Chapter 11 marks the beginning of PG & E’s next era – as a fundamentally improved company and the safe, reliable tool our customers, communities and California deserve.”
A federal judge last month approved a $ 58 billion plan for the company to go bankrupt by June 30, the deadline the company had to meet to cover a $ 21 billion insurance fund created by California last year.
US Bankruptcy Judge Dennis Montali’s decision cleared the way for PG&E to pay $ 25.5 billion for losses from devastating fires in 2017 and 2018.
Dozens of lawsuits were settled during the trial, with $ 13.5 billion earmarked for more than 80,000 people who lost family, homes, businesses and other property in the fires.
The company plans to find a new CEO to replace Bill Johnson, who quit on June 30 after just 14 months on the job. It has audited its board of directors, including 11 newly appointed members. PG&E has also committed to cutting up its sprawling territory into regional units to be more responsive to the diverse needs of the 16 million people who trust it for power.
To fund the plan, PG&E is almost doubling its debt and saddles the company with a burden that critics fear will make it harder to raise the estimated $ 40 billion for improvements that the tool still needs to make in its power grid.
This marks the second time in 16 years that PG&E has navigated in a complicated bankruptcy case that has raised questions about how it will work in the future. The last time the company came out of bankruptcy in 2004, the increase in electricity prices rose and management focused even more on increasing profits instead of upgrading its power supply.