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California regulator approves PG&E’s Chapter 11 reorganization plan

imageStock Markets5 hours ago (May 28, 2020 08:15PM ET)

(C) Reuters. FILE PHOTO: PG&E works on power lines to repair damage caused by the Camp Fire in Paradise

(Reuters) – PG&E Corp said on Thursday its Chapter 11 reorganization plan has been confirmed by a California power regulator, bringing the power provider one step closer to emerge from bankruptcy and participate in a state-backed wildfire fund.

The decision by the California Public Utilities Commission (CPUC) also approved the company’s request to issue new debt and securities to finance its exit from bankruptcy, PG&E said in a statement.

The San Francisco-based utility had filed for Chapter 11 bankruptcy protection in January last year, citing potential liabilities exceeding $30 billion from major wildfires sparked by its equipment in 2017 and 2018. The company needs to exit bankruptcy by June 30 to participate in a state-backed wildfire fund that would help reduce the threat to utilities from wildfires.

The power provider has had a tumultuous phase since the filing, with CPUC having asked the company in April for governance and oversight changes to its reorganization plan. Governor Gavin Newsom too had previously raised concerns about the plan.

PG&E said the California power regulator has now approved a number of measures to improve its governance process, operational structure, and safety performance.

The regulatory approval came hours after a federal judge blasted the company for engaging in behavior that he believed is endangering lives.

Earlier in the day, U.S. District Judge William Alsup said power regulators in California have not done enough to hold the company accountable.

The November 2018 wildfire destroyed much of the town of Paradise, which had about 26,000 people, and nearby Concow. More than 18,000 buildings were affected.

PG&E also agreed to put itself up for sale if it cannot emerge from Chapter 11 by a state-imposed June 30 deadline, before the next wildfire season begins.

California regulator approves PG&E’s Chapter 11 reorganization plan

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