PG&E Corporation and Pacific Gas and Electric Company (PG&E) has received approval from California’s bankruptcy court for its $11 billion settlement to resolve all insurance subrogation claims arising from the 2017 Northern California wildfires and the 2018 Camp Fire.
PG&E first announced the settlement in September 2019 as part of its Chapter 11 Plan of Reorganization, after investigations found that the utility’s equipment was responsible for igniting the 2018 Camp Fire, and many of the major wildfires that hit California in 2017.
The company filed for bankruptcy protection in January 2019 in anticipation of the massive liabilities it faced from the Camp Fire, which became the deadliest blaze on record.
Court approval now enables PG&E to move ahead with the $11 billion of subrogation and related payments to re/insurers, as well as the other agreements that make up the roughly $25.5 billion settlement package.
These include a $1 billion settlement to satisfy the wildfire claims of certain cities, counties, and other public entities, and a $13.5 billion settlement resolving claims by individual victims and others relating to the 2015 Butte Fire, 2017 Northern California Wildfires, and the 2018 Camp Fire.
It’s thought that the subrogation settlement could cascade down through the market, to benefit some companies and reduce their ultimate losses from some of the wildfires
Notably, the ruling also means PG&E can now join the California Wildfire Fund, which is administered by the CEA. The Fund is currently looking to place a reinsurance program, which the market says is being marketed at around the $2 billion mark.
“Today’s ruling in the Chapter 11 proceeding concludes the process of approving PG&E’s Plan of Reorganization and is a critical milestone that brings us one step closer to compensating wildfire victims fairly and quickly and sets the course for PG&E’s future,” said CEO and President of PG&E Corporation Bill Johnson.
“With respect and humility, we came before the court, the victims and the community to be held accountable and accept responsibility for our role in the Camp Fire. All 23,000 PG&E employees are committed to making sure our equipment never again causes another catastrophe,” he continued.
“While nothing will repair the wounds caused by the Camp Fire, we hope the actions we are taking to reduce wildfire risk, harden our system and get victims compensated will begin to help restore the trust of our communities and their confidence that we are working to keep them safe.”
