Company on Track to Participate in New State
Wildfire Fund
PG&E Expects to Emerge from Chapter 11
In July
PG&E Corporation and Pacific Gas and Electric Company
(together “PG&E”) announced today that the United States
Bankruptcy Court for the Northern District of California has
confirmed the company’s Chapter 11 Plan of Reorganization (the
Plan). This follows the California Public Utilities Commission’s
approval of the Plan on May 28, 2020.
“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. We appreciate the extensive collaboration among
a broad range of stakeholders that brought us to this point as we
work to reimagine the company,” said CEO and President of PG&E
Corporation Bill Johnson.
“During this past week, we have heard the victims of the 2018
Camp Fire share their traumatic and tragic experiences in a Butte
County courtroom. We heard every word and we will never forget
their pain and loss. 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.”
“No apology, no plea, no sentencing can undo that damage, and no
passage of time can lessen the anguish we heard expressed in court.
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.”
“PG&E is committed to emerging from Chapter 11 as a
fundamentally improved and transformed utility that meets the
highest safety, governance, and operational standards,” Johnson
concluded.
Upon emergence from Chapter 11, PG&E will be eligible to
participate in the state’s new go-forward wildfire fund.
PG&E expects to emerge from Chapter 11 in July. Upon
emergence, all wildfire settlements provided for in the Plan of
Reorganization will be implemented, including the immediate funding
of the Fire Victim Trust through which individual wildfire victim
claims and certain other wildfire-related claims will be
determined, administered, and paid.
The Bankruptcy Court has already approved the selection of the
Trustee and Claims Administrator for the Fire Victim Trust so that
the Fire Victim Trust will be in a position to administer claims
and make payments to wildfire victims as quickly as possible
following the funding of the Fire Victim Trust when the Plan
becomes effective.
Wildfire Victim Settlements
As part of the Chapter 11 cases, PG&E previously reached
settlements with all major wildfire victims' groups to be
implemented pursuant to PG&E's Plan, valued at approximately
$25.5 billion, including:
- An approximately $13.5 billion settlement resolving claims by
individual victims and others relating to the 2015 Butte Fire, 2017
Northern California Wildfires (including the 2017 Tubbs Fire), and
the 2018 Camp Fire; this includes stock valued at approximately
$6.75 billion based on an agreed-upon formula (the ultimate value
of the stock could be higher or lower);
- A $1 billion settlement to satisfy the wildfire claims of
certain cities, counties, and other public entities; and
- An $11 billion settlement with insurance companies and other
entities that paid claims by individuals and businesses related to
the wildfires.
Plan Commitments to Position PG&E for Long-Term
Success
The company recently announced the selection of a new Board of
Directors that will be in place upon emergence to help guide it
post Chapter 11, including 11 new board members with substantial
expertise in diverse areas critical to the company’s work.
In addition to announcing the new board, PG&E made a series
of commitments, some of which are already underway, regarding its
governance, operations, and financial structure, all designed to
further prioritize safety and expedite the company's successful
emergence from Chapter 11. The company made these commitments
working with the Governor’s Office and incorporating guidance from
CPUC President Batjer, which was included in the full Commission’s
approval of the Plan.
The commitments include:
- Supported the CPUC's enactment of measures to strengthen
PG&E's governance and operations, including enhanced regulatory
oversight and enforcement that provides course-correction tools as
well as stronger enforcement if it becomes necessary;
- Began hosting a state-appointed observer to provide the state
with insight into the company's progress on safety goals before the
company exits Chapter 11;
- Appointing an independent safety monitor when the term of the
court-appointed Federal Monitor expires;
- Establishing newly expanded roles of Chief Risk Officer and
Chief Safety Officer, with both reporting directly to the PG&E
Corporation CEO;
- Formed an Independent Safety Oversight Committee to provide
independent review of operations, including compliance, safety
leadership, and operational performance;
- Assumed all collective bargaining agreements with labor unions,
pension obligations, and other employee obligations, and all power
purchase agreements and Community Choice Aggregation servicing
agreements;
- Reformed executive compensation to further tie it to safety
performance and customer experience;
- A commitment that PG&E Corporation will not reinstate a
common stock dividend until it has recognized $6.2 billion in
non-GAAP core earnings, which PG&E believes will contribute an
additional $4 billion of equity to pay down debt and invest in the
business;
- Filed a proposal with the CPUC requesting a rate-neutral $7.5
billion securitization transaction after PG&E emerges from
Chapter 11 in order to finance costs in an efficient manner that
benefits customers and accelerates payment to wildfire victims;
and
- Committing not to seek recovery in customer rates of any
portion of the amounts that will be paid to victims of the 2015,
2017, and 2018 wildfires under the Plan when PG&E emerges from
Chapter 11 (except through the rate-neutral securitization
transaction).
Resources and Information
Additional resources for customers and other stakeholders, and
other information on PG&E’s filings, can be accessed by
visiting PG&E's restructuring website at
www.pge.com/reorganization. Court filings and other documents
related to the Chapter 11 process in the U.S. are available on a
separate website administered by PG&E's claims agent, Prime
Clerk, at https://restructuring.primeclerk.com/pge. Information
from Prime Clerk is also available by calling 1-844-339-4217
(toll-free in the U.S.) or 929-333-8977 (for parties outside the
U.S.), as well as by emailing pgeinfo@primeclerk.com.
Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore
LLP are serving as PG&E's legal counsel; Lazard is serving as
its investment banker; and AlixPartners, LLP is serving as the
restructuring advisor to PG&E.
Forward-Looking Statements
This news release includes forward-looking statements that are
not historical facts, including statements about the beliefs,
expectations, estimates, future plans and strategies of PG&E
Corporation and Pacific Gas and Electric Company, including but not
limited to statements about the expected timing of emergence from
Chapter 11, PG&E’s participation in the Wildfire Fund,
implementation of wildfire settlements, and Plan commitments. 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. 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 Pacific Gas and Electric Company’s joint annual
report on Form 10-K for the year ended December 31, 2019, their
joint quarterly report on Form 10-Q for the quarter ended March 31,
2020, and their subsequent reports filed with the Securities and
Exchange Commission (the “SEC”), which are available on PG&E
Corporation’s website at www.pgecorp.com and on the SEC website at
www.sec.gov. Additional factors include, but are not limited to,
those associated with the Chapter 11 cases of PG&E Corporation
and Pacific Gas and Electric Company that commenced on January 29,
2019. PG&E Corporation and Pacific Gas and Electric Company
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.
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 pgecorp.com.
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Investor Relations Contact: 415.972.7080 Media Inquiries
Contact: 415.973.5930 www.pgecorp.com
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