Company Has Settled All Major Wildfire
Claims and Resolved the Disputed Release Provisions Between the
Wildfire Victims and Insurance Companies
PG&E Has Made Substantial Changes to
Leadership and Meaningful Strides in Wildfire Safety; Firmly
Focused on New Culture of Safety and Oversight
PG&E is Committed to Working with All
Stakeholders to Obtain Approval of the Plan, Compensate Wildfire
Victims, Protect Customers’ Long-Term Interests, and Secure
California’s Energy Future
PG&E Corporation and Pacific Gas and Electric Company
(together, “PG&E”) today filed an amended Plan of
Reorganization with the Bankruptcy Court in its Chapter 11 cases.
The Plan reflects PG&E’s settlements with all major groups of
wildfire claimants and keeps PG&E on track to achieve
regulatory approval and Bankruptcy Court confirmation in advance of
the June 30, 2020, statutory deadline for participation in the
state’s new wildfire fund.
The company believes its Plan is confirmable, satisfies all
requirements of Assembly Bill 1054 (AB 1054) and complies with the
Bankruptcy Code. It is the product of extensive negotiations,
treats all victims fairly, protects customers and employees, and
will enable PG&E to emerge from Chapter 11 as a financially
sound utility positioned to serve California for the long term.
“Today’s filing brings us one step closer to successfully
concluding PG&E’s Chapter 11 cases so that the wildfire victims
can be compensated as quickly as possible. We appreciate the
extensive work by many stakeholders that went into this Plan, in
particular the efforts of our state leaders to encourage all
parties to work quickly to find common ground,” said CEO and
President of PG&E Corporation Bill Johnson.
“We believe our Plan is the best solution for all
constituencies, and we look forward to bringing these complex
proceedings to their conclusion. In the meantime, we continue to
make meaningful changes and additional investments throughout the
company to reduce the risk of wildfire and help us continue to
deliver safe, reliable energy to our customers,” Johnson said.
The company is committed to working with all stakeholders to
confirm support for the Plan, to obtaining regulatory approval from
the California Public Utilities Commission consistent with AB 1054,
and to achieving confirmation of the Plan by the Bankruptcy Court
in advance of June 30, 2020.
PG&E’s Plan: Best Path Forward
PG&E’s Plan prioritizes getting wildfire victims paid
soonest by resolving outstanding litigation and eliminating the
need for a Tubbs Fire trial and a costly and uncertain estimation
process. PG&E assumes its obligations to its employees and
creditors without impairments, making sure all parties are treated
fairly.
The plan put forward by the Ad Hoc Bondholders group (the
Elliott plan) is a last-ditch effort to derail the wildfire
victims’ settlements, and force costly, uncertain and protracted
litigation. That plan would enrich those firms backing it by
charging interest rates on debt that are both above market rate and
higher than required by law, rather than putting those ratepayer
dollars toward safety, reliability and clean energy
investments.
Major Settlements Reached
As announced last week, PG&E reached a settlement valued at
approximately $13.5 billion to resolve all remaining wildfire
claims, including individual claims, relating to the 2015 Butte
Fire, 2016 Ghost Ship Fire, 2017 Northern California Wildfires
(including the 2017 Tubbs Fire), and the 2018 Camp Fire pursuant to
the terms of PG&E’s Plan. PG&E’s Plan has the support of
the Official Committee of Tort Claimants and firms representing
approximately 70% of wildfire victims.
PG&E previously reached settlements with two major groups of
wildfire claim holders, including a $1 billion settlement with
cities, counties, and other public entities, and an $11 billion
agreement with insurance companies and other entities that have
already paid insurance coverage for claims relating to the 2017 and
2018 wildfires.
Today, PG&E also resolved the disputed release provisions
between the wildfire victims and insurance companies, which was a
condition to the settlement with the wildfire victims.
Overview of PG&E’s Plan
PG&E’s Plan would accomplish the following:
- Satisfy the requirements of AB 1054 and put PG&E on a path
to help the state meet its clean energy goals and become the
company that customers and communities expect and deserve;
- Compensate wildfire victims and certain limited public entities
from a trust funded for their benefit in the amount of
approximately $13.5 billion in accordance with the terms of the
Tort Claimants Restructuring Support Agreement, which is subject to
the approval of the Bankruptcy Court and other conditions;
- Compensate insurance subrogation claimants from a trust funded
for their benefit in the amount of $11 billion in accordance with
the terms of the Subrogation Claims Settlement and Restructuring
Support Agreement, which is subject to the approval of the
Bankruptcy Court and other conditions;
- Pay $1 billion in full settlement of the claims of certain
public entities like cities and counties relating to the wildfires,
as previously announced;
- Pay in full, with interest at the legal rate, all prepetition
funded debt obligations, all prepetition trade claims and all
prepetition employee-related claims;
- Assume all power purchase agreements and community choice
aggregation servicing agreements;
- Assume all pension obligations, other employee obligations, and
collective bargaining agreements with labor; and
- Provide for PG&E’s future participation in the state
wildfire fund established by Assembly Bill 1054.
PG&E’s Plan is fully financeable throughout the capital
structure. This includes the over $12 billion of equity backstop
commitments that the company received last week to support its
Plan.
PG&E's Plan is subject to confirmation by the Bankruptcy
Court in accordance with the provisions of the Bankruptcy Code.
The Plan filed today is available on the company’s website at
http://investor.pgecorp.com/Chapter-11/default.aspx.
Key PG&E Safety Improvements and Investments
PG&E has taken and continues to take critical actions to
improve safety and strengthen its operations, including:
- Completing enhanced and accelerated inspections of more than
700,000 transmission, distribution and substation assets of its
electric infrastructure in high fire-threat areas and addressing
immediate safety risks;
- Conducting enhanced vegetation management, including meeting
and exceeding important state standards regarding clearances around
power lines in high fire-threat areas;
- Conducting system hardening and resiliency, including replacing
wood poles with more resilient poles, replacing bare overhead
conductor with covered conductor, targeted undergrounding, and
establishing temporary microgrids;
- Upgrading its Wildfire Safety Operations Center, which serves
as PG&E's 24/7 hub for monitoring wildfire risks and
coordinating prevention and response efforts across Northern and
Central California;
- Installing more than 600 weather stations and 130
high-definition cameras across its service area. PG&E will
continue to expand these networks in high fire-threat areas to
enhance weather forecasting and modeling and improve the company’s
ability to predict and respond to extreme wildfire danger;
- Naming Bill Johnson as Chief Executive Officer and President of
PG&E Corporation;
- Naming Andrew M. Vesey as Chief Executive Officer and President
of Pacific Gas and Electric Company, with responsibility for all
aspects of Utility operations;
- Appointing new leaders in Electric Operations and Gas
Operations;
- Establishing a $105 million Wildfire Assistance Fund to aid
those displaced by the 2017 Northern California wildfires and 2018
Camp Fire who are either uninsured or need assistance with the cost
of substitute or temporary housing or other urgent needs; and
- Continuing to invest in PG&E’s systems, infrastructure and
critical safety efforts while delivering safe natural gas and
electric service to its millions of customers.
Public Dissemination of Certain Information
PG&E Corporation and Pacific Gas and Electric Company (the
“Utility”) routinely provide links to the Utility’s principal
regulatory proceedings with the California Public Utilities
Commission and the Federal Energy Regulatory Commission at
http://investor.pgecorp.com, under the “Regulatory Filings” tab, so
that such filings are available to investors upon filing with the
relevant agency. PG&E Corporation and the Utility also
routinely post, or provide direct links to, presentations,
documents, and other information that may be of interest to
investors at http://investor.pgecorp.com, under the “Chapter 11,”
“Wildfire Updates” and “News & Events: Events &
Presentations” tabs, respectively, in order to publicly disseminate
such information. It is possible that any of these filings or
information included therein could be deemed to be material
information.
About PG&E Corporation
PG&E Corporation (NYSE: PCG) is a holding company
headquartered in San Francisco. It is the parent company of Pacific
Gas and Electric Company, an energy company that serves 16 million
Californians across a 70,000-square-mile service area in Northern
and Central California. Each of PG&E Corporation and the
Utility is a separate entity, with distinct creditors and
claimants, and is subject to separate laws, rules and regulations.
For more information, visit http://www.pgecorp.com.
Forward-Looking Statements
This press release contains forward-looking statements that are
not historical facts, including statements about the beliefs,
expectations, estimates, future plans and strategies of PG&E
Corporation and the Utility, including but not limited to their
bankruptcy emergence plan and related financings. These statements
are based on current expectations and assumptions, which management
believes are reasonable, and on information currently available to
management, but are necessarily subject to various risks and
uncertainties, including the possibility that the conditions to
emergence in the Plan or to funding under equity financing
commitments will not be satisfied. In addition to the risk that
these assumptions prove to be inaccurate, factors that could cause
actual results to differ materially from those contemplated by the
forward-looking statements include factors disclosed in PG&E
Corporation and the Utility’s joint Annual Report on Form 10-K for
the year ended December 31, 2018, their joint Quarterly Reports on
Form 10-Q for the quarters ended March 31, 2019, June 30, 2019 and
September 30, 2019, and their subsequent reports filed with the
Securities and Exchange Commission. Additional factors include, but
are not limited to, those associated with the Chapter 11 cases of
PG&E Corporation and the Utility that commenced on January 29,
2019. PG&E Corporation and the Utility undertake no obligation
to publicly update or revise any forward-looking statements,
whether due to new information, future events or otherwise, except
to the extent required by law.
No Securities Offering
This is not an offering of securities and securities may not be
offered or sold absent registration or an applicable exemption from
the registration requirements.
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