- Pacific Gas & Electric (PG&E) announced Friday it has agreed in principle with groups representing approximately 85% of insurance subrogation claims related to the 2017 Northern California wildfires and 2018 Camp Fire.
- This is PG&E's second major settlement related to wildfire claims. The Ad Hoc Subrogation Group had been seeking $20 billion but said it hoped the deal would allow the utility to "fairly compensate all victims" and emerge from Chapter 11 by a June 30, 2020, legislative deadline.
- PG&E on Monday filed an outline of its reorganization plan with the U.S. Bankruptcy Court for the Northern District of California, proposing to pay $17.9 billion for wildfire claims. The utility must exit bankruptcy before July in order to access California's new wildfire fund, created to help address fire costs.
Shares of PG&E rose 6% this morning on news of its settlement, which remains subject to definitive documentation and approval of the U.S. Bankruptcy Court for the Northern District of California.
The deal comes three months after the utility announced a $1 billion settlement with 18 cities, counties and public agencies impacted by wildfires.
In a statement, the insurance group said while the proposed settlement "does not fully satisfy" its members' unsecured claims, "we hope that this compromise will pave the way for a plan of reorganization that allows PG&E to fairly compensate all victims."
PG&E will need to file a more detailed plan of reorganization by Sept. 29, when its exclusivity period ends. After that, the utility's creditors can propose their own strategies.
The proposal filed this week included $8.4 billion was marked for compensation for wildfire victims, $8.5 billion for insurance companies, which have paid claims, and $1 billon for public entities. However, the plan contained few details on how PG&E intends to fund the reorganization.
In June, major investors floated a reorganization plan that offered up to $30 billion in capital, including $16 billion to $18 billion earmarked for 2017 and 2018 wildfire claims.
CORRECTION: The settlement covers all insurance claims from 2017 and 2018, rather than 85% as first reported.