Gov. Gavin Newsom Rejects PG&E's $13.5 Billion Fire Settlement

NORTHERN CALIFORNIA — Gov. Gavin Newsom on Friday rejected the proposed plan by Pacific Gas & Electric Co. to emerge from bankruptcy and pay $13.5 billion to California wildfire victims, writing in a letter to PG&E CEO Bill Johnson that the plan "falls woefully short" of state safety requirements.

Newsom's approval wasn't legally required, but PG&E had asked the governor to assess its plan after it settled last week with victims of wildfires sparked by its equipment, the Los Angeles Times reported.

The governor's rejection of the plan may delay PG&E's ability to pay the wildfire victims, according to the Times. And it throws a wrench into PG&E's efforts to emerge from Chapter 11 bankruptcy, a process it began in January due to its heavy financial liabilities stemming from the wildfires.

The utility must be out of bankruptcy by June 30 in order to access a $21 billion state insurance pool that would cover future wildfire liabilities.

In his five-page letter to Johnson, Newsom wrote that the utility's restructuring plan failed to improve PG&E's ability to deliver safe, reliable power to its customers.

"In my judgment, the amended plan and the restructuring transactions do not result in a reorganized company positioned to provide safe, reliable, and affordable service," Newsom said.

A PG&E spokesperson told the Times that the utility disagrees with the governor's view, and planned to work "diligently in the coming days to resolve any issues that may arise."

Newsom has actively criticized PG&E in recent months, accusing the utility of neglecting its responsibilities to shareholders in the wake of recent wildfires and a string of public safety power shutoffs this fall.

"Californians should not pay the price for decades of PG&E's greed and neglect," Newsom said following a round of power shutoffs in October.