PG&E creditors propose $30 billion bankruptcy plan
A group of major creditors in Pacific Gas & Electric Co. (PG&E) said they had put together a reorganization plan that would bring the venerable utility out of bankruptcy by the end of the year while protecting renewable power contracts and buttoning up the company against further exposure to liability from wildfire damage.
Lawyers for the “Ad Hoc Committee of Senior Unsecured Noteholders of Pacific Gas and Electric Company” filed a motion in U.S. Bankruptcy Court on June 25 asking the judge to close PG&E management’s exclusive window for crafting a reorganization plan and allow the cadre of investors to submit a plan that they said would get the utility back on its financial feet by the end of the year. Such a step, they said, would enable PG&E to access the Wildfire Recovery Fund that California Gov. Gavin Newsom has proposed to pay off Californians who lost their homes in the state’s recent fire seasons.
The committee, made up of unidentified major bondholders, said it was ready to pump around $30 billion into PG&E and that its strategy would:
• Be “rate neutral” to PG&E ratepayers
• Solidify the utility’s credit rating
• Provide $20 billion for past and future damage claims
• Keep renewable-power contracts intact
• Invest in new hardened infrastructure
• Protect employee pensions
Newsom’s proposal would require PG&E to come out of Chapter 11 bankruptcy by June 30, 2020 at the latest in order to draw from the proposed fund. But the Ad Hoc Committee’s motion alleged that PG&E was not moving quickly enough at this time. “Progress toward a viable, confirmable plan is long overdue,” the motion said.
It was not immediately known when the court would address the motion.
PG&E told Reuters that the company is “committed to working together with our stakeholders through the Chapter 11 process to fairly and expeditiously resolve our liabilities resulting from the 2017 and 2018 Northern California wildfires, develop a more sustainable business model and continue delivering safe and reliable service.”
PG&E entered Chapter 11 in January after two years in which downed power lines sparked a series of deadly and destructive wildfires in its Northern California territory. The company was given until the end of September to draft a reorganization plan.
The new PG&E Corporation board, which has now been expanded to 15 members, met with shareholders on June 21 at the company’s annual meeting. “Our new board of directors bring a diverse and balanced mix of experiences and competencies,” said Chair of the Board Nora Mead Brownell. “We are committed to using our expertise to better serve our customers and communities, and help the company move through Chapter 11 and fairly and expeditiously compensate the victims of wildfire.”
Earlier this month, PG&E announced an agreement to pay some $1 billion to 18 public entities for damages caused by wildfires in 2017 and 2018. The Ad Hoc Committee said it was never consulted about the deal and urged the court to allow it to pursue its plan in accordance with the Bankruptcy Code, which allows creditors whose investments are at stake to have a voice in how the case is resolved.
