PG&E Corporation (NYSE:PCG) finally overcome several obstacles for the devastating fires caused by its equipment in the preceding two years. The company agreed for a settlement of $1.7 billion with Californian regulators.
The US Bankruptcy Court grants approval
The US Bankruptcy Court has approved PG&E for a multibillion-dollar settlement with the wildfire victims. It helps the beleaguered company to overcome several obstacles. However, the company still needs the support of Gavin Newsom, Governor, to before deciding to put the wildlife liabilities under the wraps.
Plans to resolve issues before the June 30 deadline
PG&E expects to resolve all the issues caused by the deadly wildfires in 2017 and 2018 before June 30, 2019 deadline allowed by the lawmakers. Everyone felt the company settled the issues by agreeing to pay $13.5 billion to the wildfire victims two weeks ago. However, PG&E has faced new objections from the governor by the end of last week because some hedge funds want full control of the company. They want to incorporate changes in the agreed terms for the settlement.
The future of wildfire victims, who lost their loved ones and home, will depend on the outcome of those battles. How California updates and fixes the problems in its energy system, which is plagued by the fires caused due to drier conditions in the forests.
Dennis Montali, the judge at the US Bankruptcy Court, has granted approval to PG&E settlement with the victims on Tuesday. The utility has also reached a separate accord worth $11 billion to settle the insurance claims of holders.
According to a communiqué from the Utility Commission, the shareholders of PG&E have to pay a penalty of $1.625 billion for the fires that killed 85 people in 2018. They also need to pay $50 million to mitigate fire risks in the future. PG&E will not collect these expenses from the consumers.
Around $800 million from the proposed penalties would be spent on restoring the devastated areas in the 2018 campfire. It will also spend over $150 million for the loss caused due to wildfires in Northern California in 2017.
PG&E turned off the electricity in November 2019 to prevent inadvertent fires caused due to sparks. As a result, around 120,000 people faced a blackout in Northern California. However, the company reduced the blackout on favorable weather conditions and restored electricity in some areas.