SAN FRANCISCO, CA – California Gov. Gavin Newsom's opposition to Pacific Gas & Electric's restructuring plan just a week after it struck a $13.5 billion settlement with fire victims is forcing the nation's largest utility to go back to the negotiating table and come up with a solution fairly quickly.
The San Francisco-based company needs to pull a deal off to meet a June 30 deadline to emerge from bankruptcy protection and regain its financial footing.
Missing the deadline would prevent PG&E from being able to draw from a special fund created by the Democratic governor and state lawmakers to help insulate California utilities from future fires that many people believe are bound to erupt as a changing climate continues to create hazardous conditions. Utilities are at risk because their aging electric transmission lines are expected to take years to upgrade.
On Thursday, PG&E filed an amended reorganization plan with the U.S. Bankruptcy Court after reaching a settlement on Dec. 6 with thousands of people who lost homes, businesses and family members in a series of devastating fires.
In his letter on Friday, Newsom said the plan does not comply with state law and does not achieve the goal of addressing what he considers its most important elements: providing safe and reliable power to PG&E customers.
“In my judgment, the amended plan and the restructuring transactions do not result in a reorganized company positioned to provide safe, reliable, and affordable service," he said.
The governor said PG&E’s plan did not go far enough in improving safety, corporate governance and the company’s financial position. The company has until Tuesday to appease Newsom and get him to sign off on the plan.
“We’ve welcomed feedback from all stakeholders throughout these proceedings and will continue to work diligently in the coming days to resolve any issues that may arise,” PG&E said in a statement.