Pacific Gas & Electric says it has settled a dispute with disaster-relief agencies that threatened to siphon money away from a $13.5 billion fund earmarked for victims of catastrophic wildfires caused by the nation’s largest utility
SAN FRANCISCO — Pacific Gas & Electric told a federal bankruptcy judge that it has settled a dispute with disaster-relief agencies that threatened to siphon money away from a $13.5 billion fund earmarked for victims of catastrophic wildfires in California caused by the nation’s largest utility.
The resolution disclosed Tuesday by a PG&E lawyer at the outset of a court hearing in San Francisco could remove a major stumbling block as the company scrambles to meet a June 30 deadline to emerge from bankruptcy proceedings that began early last year.
It’s still unclear if the deal worked out with the Federal Emergency Management Agency and California’s Office of Emergency Services and lawyers for wildfire victims will satisfy everyone involved. PG&E attorney Stephen Karotkin said some of the final details were still being worked out with the help of a federal mediator.
He told U.S. Bankruptcy Judge Dennis Montali that he expects the settlement to be disclosed by next week.
The two disaster relief agencies had been attempting to recover as much as $4 billion from the fund to reimburse them for financial assistance provided during and after fires that raged through several Northern California counties in 2015, 2017 and 2018.
Without repayment, the agencies asserted, U.S. and California state taxpayers could be forced to absorb the costs for cleaning up the mess that might not have happened had PG&E properly maintained power lines that provide electricity to 16 million people.
PG&E faced more than $50 billion in claimed losses from the fires, prompting the utility to file for bankruptcy for the second time in less than two decades.
The San Francisco company has settled the claims of wildfire victims, insurers and a few other government agencies for a total of $25.5 billion as part of its plan to get out of bankruptcy.
Those deals include the $13.5 billion fund earmarked for victims, many of whom protested about the prospect of the disaster-relief agencies taking nearly one-third the money that is supposed to help people rebuild their lives after losing family members and homes.