- Pacific Gas & Electric (PG&E) will file a reorganization plan by Sept. 9, pledging "rate neutrality" for its 16 million customers, and this week asked a bankruptcy judge to reject requests from its creditors that they too be allowed to propose financial recovery strategies for the embattled utility.
- U.S. Bankruptcy Judge Dennis Montali is expected to rule on calls to end the exclusivity period either Friday or Monday.
- PG&E's creditors say they want to speed the reorganization process to ensure the company will be able to access a new wildfire mitigation fund the state is creating to assist utilities with fire-related liabilities. The California Public Utilities Commission (CPUC) moved this week to authorize utilities to charge customers for the fund.
PG&E's bankruptcy and the state's development of a wildfire mitigation fund are separate proceedings, but they are also inextricably connected.
An estimated $30 billion in wildfire liabilities were part of PG&E's bankruptcy, and accessing the new mitigation fund will be key to future operations. At the same time, the utility must wrap up its reorganization by June 30 in order to meet state legislative deadlines to access that fund.
That has led creditors to ask Montali to consider their own reorganization plans, and in turn PG&E has said it will bring its own proposal to the court on a faster timeline.
The utility has until Sept. 29 to file its plan, but in its Monday filing PG&E told the court it will file a plan by Sept. 9 that includes: payment in full or reinstatement of pre-petition funded debt obligations; "rate neutrality" for its customers; the assumption of all power purchase agreements and community choice aggregation servicing agreements; and participation in the state's wildfire fund.
PG&E told the court it is "uniquely positioned to retain the exclusive right to file a plan," citing the "complexities of these cases" and "the need to determine the debtors’ wildfire liabilities either consensually or through an estimation proceeding."
In a statement to Utility Dive, PG&E's Official Creditors Committee said it supports the termination of PG&E’s exclusivity period "to encourage competition among reorganization plans."
"We believe it is in the best interest of wildfire victims, ratepayers, creditors and all Californians that the Court considers credible, competing plans in order to secure the best possible outcome for all parties," the group said.
Creditors say wildfire victims and businesses providing services to PG&E deserve to see the case resolved "promptly and fairly."
CPUC takes up wildfire fund
California lawmakers last month approved a new mechanism to help utilities cover wildfire damage liabilities, to be funded equally by utility shareholders and customers.
CPUC Commissioner Clifford Rechtschaffen on Monday issued a scoping memo, laying out what issues will be considered as regulators look at whether to require utilities to collect the charge from ratepayers. Issues will include "whether imposition of the Wildfire Fund non-bypassable charge is just and reasonable" and if PG&E customers can be charged if the utility "is deemed ineligible to participate in the Wildfire Fund."
Customer contributions to the fund will come via a $2.50 monthly charge on bills that has been in place since the state's energy crisis, and was scheduled to expire at the end of 2021.
Rechtschaffen asked parties to explain "the extent to which establishment of the Wildfire Fund non-bypassable charge ... will lower the electrical corporations’ cost of capital, enhance the electric corporations’ financial viability, and reduce costs to ratepayers."
Opening comments on the issues and questions are due Aug. 29, with replies due Sept.6.
Rechtschaffen's ruling determined that an evidentiary hearing is not needed at this time, and required responses from Southern California Edison, San Diego Gas & Electric, Bear Valley Electric Service, PG&E and others.
Regulators are aiming for a final decision by Oct. 24.
Separately, a new report on PG&E's vegetation management practices is highly critical of the utility. The court appointed monitor charged the utility has failed to address thousands of trees which pose a danger to the grid.
U.S. District Court Judge William Alsup, who oversees PG&E's probation related to the deadly 2010 San Bruno pipeline explosion, ordered the report be made public Wednesday.