SAN FRANCISCO — California power regulators slapped Pacific Gas and Electric with a $2.1 billion fine for igniting a series of deadly wildfires that landed the beleaguered utility in bankruptcy.
The record penalty imposed Thursday in an administrative law judge’s decision boosts the punishment that had been agreed upon in a $1.7 billion settlement announced in December. Several consumer groups had protested the settlement as too lenient in light of the destruction that PG&E left behind, and the California Public Utilities Commission agreed, upon further review.
PG&E PCG, -2.33% didn’t have an immediate comment about the increased penalty.
The harsher punishment includes a $200 million payment to California that will be earmarked for people who lost family members, homes and businesses in catastrophic wildfires caused by PG&E’s outdated electrical grid and negligence during 2017 and 2018. The fires killed nearly 130 people and destroyed nearly 28,000 homes and other buildings.
That $200 million will supplement a $13.5 billion fund that the San Francisco company is setting up as part of its effort to emerge from bankruptcy protection by a June 30 deadline.
More than 81,000 claims have been filed in the bankruptcy case.
The decision will also prevent PG&E from attempting to recover $1.82 billion from its customers, forcing its shareholders to bear the cost instead. The settlement previously had prevented PG&E from recovering $1.63 billion.
As part of the previous settlement, PG&E had projected it would realize $469 million in tax savings. The ruling issued Thursday would require the San Francisco company to funnel any tax savings to hold down the prices charged to the 16 million people who rely on the nation’s largest utility for electricity.
Thursday’s rebuke is the latest blow to PG&E, which has been trying to climb out of a huge financial hole left by its liabilities in the fires. The company filed for bankruptcy 13 months ago to seek shelter from more than $50 billion in claimed losses.
PG&E has settled those claims by reaching settlements totaling $25.5 billion with the wildfire victims, insurers and some government agencies.
But the company still faces some potentially imposing hurdles to clear, with California Gov. Gavin Newsom threatening a government-led takeover bid of PG&E unless changes are made to its current plan for getting out of bankruptcy. PG&E needs state approval of the plan in order to qualify for coverage from a wildfire insurance fund created by California last summer.
Source: Read Full Article