PG&E is closing in on final terms for a settlement that stems from their role in the massive wildfires in the United States in 2017 and 2018. While the final number could change, it looks like the company will settle for a $13.5 billion payout.
PG&E was found responsible for sparking massive wildfires in 2017 and 2018 due to faulty power lines. The findings forced the company to declare Chapter 11 in January of 2019 because the fires were found to cause roughly $30 billion in liabilities.
The $13.5 billion is the portion of that $30 billion that is designated to go directly to the victims of the fire. In addition to that $13.5 billion, PG&E had to pay an additional $11 billion to insurers and other wildfire claims holders early on. The company also had to shell out an additional $1 billion to local government agencies.
Bloomberg provided details of the $13.5 billion deal, writing that “…the California-based power giant would pay half in cash and the rest in stock in the newly reorganized utility…The cash portion would be paid with a lump sum upfront, and the remainder would be paid over 18 months…”.
$13.5 billion is a win for the victims. PG&E initially came forward with an offer of $8.4 billion. An offer that got laughed out the door by victims who were unwilling to take a fraction of what they are owed. In an effort to make sure that people get the compensation they deserve, California Governor Gavin Newsom threatened a state takeover if the company failed to reach a deal with wildfire creditors and victims.
Once this deal is finalized PG&E can finally begin the process of moving past this disaster. The company is still drawing public ire, most recently due to the mandatory blackouts in California designed to help prevent another wildfire from occurring as a result of power line use. PG&E has a long road to go before it finds itself back in public graces, but this settlement is a good start.