PG&E Reaches $1 Billion Settlement With Paradise, California Governments--Update
June 18 2019 - 08:15PM
Dow Jones News
By Katherine Blunt and Erin Ailworth
PG&E Corp. has agreed to pay $1 billion to compensate more
than a dozen California cities, counties and agencies for losses
resulting from deadly wildfires sparked by its equipment.
The agreement with local governments marks the first major
settlement since PG&E sought bankruptcy protection in January.
The company has estimated it could face more than $30 billion in
potential liability costs resulting from fires in 2017 and
2018.
Paradise, the town that was destroyed in last year's Camp Fire,
which killed 85 people, would receive $270 million, the most of any
entity within the group. Butte County, where the fire occurred,
would receive $252 million. A group of local governments in
California's wine country, site of a devastating series of fires in
2017, would share $415 million.
The agreement is subject to approval in bankruptcy court and
doesn't affect claims from individuals or businesses affected by
the fires.
Paradise Mayor Jody Jones said the settlement would allow the
town to avoid an expensive trial and proceed more quickly with its
reconstruction challenges, though she expected it would take at
least a year to receive compensation, pending approval in
court.
"It's going to mean so much to the rebuilding and recovery of
Paradise," she said. "There's so much infrastructure that we have
to put back into the town, there's so much tax revenue that we lost
and are not going to get back for years."
California fire investigators have tied PG&E's equipment to
18 fires that swept the wine country region north of San Francisco
in 2017, killing 22 people, as well as last year's Camp Fire,
California's deadliest fire ever.
The cities and counties that agreed to the settlement will use
the money to recoup some disaster-recovery costs related to those
wildfires, as well as one in the fall of 2015.
"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 mutually acceptable resolutions," PG&E said in a
statement.
John Fiske, a Baron & Budd attorney representing the local
governments, said they had initially sought well more than $1
billion but declined to specify the amount. PG&E, he added, had
sought to pay less than that but was amenable in negotiations.
"It was a compromise amount," he said.
Butte County Counsel Bruce Alpert said the company's bankruptcy
filing accelerated settlement discussions with the county.
The county was among the areas where PG&E recently cut off
power preemptively during high wind conditions to avoid triggering
another fire.
"There are a lot of procedures and lots of delays that can occur
in bankruptcy court and we didn't want to get caught in that
morass," he said. "It just was a lot simpler to sit down
face-to-face or at a mediation to accomplish this result."
Mike Danko, a California trial lawyer who represents about 3,000
fire victims, including many homeowners, said the settlement amount
reflected the level of destruction wrought by the wildfires. He
noted that PG&E reached a $70 million settlement with the city
of San Bruno after a natural gas pipeline exploded there in 2010,
killing eight people.
"These are larger numbers, which is appropriate," he said.
He anticipates the company will face more than $30 billion in
liability costs as more individuals and businesses come forward
seeking compensation. His firm is still in the process of valuing
claims.
David Rabbitt, chair of the Sonoma County Board of Supervisors,
said he was pleased to reach a settlement.
"There's a collective need to get this behind us," he said, even
as he noted that PG&E's bankruptcy means a judge will have the
final say.
--Micah Maidenberg contributed to this article.
Write to Katherine Blunt at Katherine.Blunt@wsj.com and Erin
Ailworth at Erin.Ailworth@wsj.com
(END) Dow Jones Newswires
June 18, 2019 20:00 ET (00:00 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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