Products Liability Law Daily PG&E to pay local governments $1B to resolve California wildfire claims
Wednesday, June 19, 2019

PG&E to pay local governments $1B to resolve California wildfire claims

By Susan Engstrom

The California utility, whose equipment was blamed for several catastrophic wildfires, will make the payment as part of a reorganization plan subject to the bankruptcy court’s approval.

Pacific Gas and Electric Co. (PG&E) has reached agreements to resolve wildfire claims held by more than a dozen local public entities in California—including cities, counties, districts, and public agencies—impacted by the 2015 Butte Fire, the 2017 North Bay Fires, and the 2018 Camp Fire. According to a PG&E news release, the $1 billion in payments will be made as part of a Chapter 11 reorganization plan to be filed in the utility’s pending bankruptcy case. The payment of the settlement funds is subject to the bankruptcy court’s confirmation of the proposed reorganization plan.

"We remain focused on supporting our customers and the communities impacted by wildfires and helping them recover and rebuild. This is an important first step toward an orderly, fair and expeditious resolution of wildfire claims and a demonstration of our willingness to work collaboratively with stakeholders to achieve mutual acceptable resolutions. We hope to continue making progress with other stakeholders," PG&E Corp. (the utility’s parent company) President and CEO Bill Johnson said.

JAMS Mediator Judge Jay Gandhi (Ret.) presided over several days of in-person mediation sessions held in San Francisco, California. Those efforts led to the proposed settlement, which is intended to compensate public entities for damages not covered by insurance or governmental assistance programs.

In a separate news release, the city of Santa Rosa and the County of Sonoma, California, together with seven other cities and counties in the state, announced that they and PG&E have accepted the mediator’s proposal of $415 million to resolve claims related specifically to the 2017 North Bay Fires. That amount is part of the total $1 billion settlement.

"This agreement, if approved, will not only help to support Santa Rosa’s recovery, but also to aid in our ability to invest in resiliency measures that may better protect our community from future disasters," Santa Rosa Mayor Tom Schwedhelm remarked. According to Sonoma County Board of Supervisors Chair David Rabbitt, the agreement "allows us to recover financial losses and repair fire damages to roads, infrastructure, and watersheds while protecting taxpayers."

Companies: Pacific Gas and Electric Co.

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