PG&E expands reorganization plans to comply with California bankruptcy law
- Mar 24, 2020 4:36 pm GMT
(JURIST) - The Pacific Gas and Electric Company and the PG&E Corporation filed a motion on Friday with California bankruptcy court for a more expansive plan for reorganization to ensure that it is capable of paying its creditors in a timely fashion.
New aspects to their plan include bringing in an observer to monitor the company for the state, the reinstatement of dividends to contribute to investments and decreasing debts, securing rate-neutral transactions to reduce financing costs, and agreeing not to seek recovery in customer rates for any portion of the costs related to the 2017 and 2018 wildfires.
PG&E came under further scrutiny after it was accused of starting a number of wildfires in 2017 and 2018 through reckless operation or maintenance of its power lines. The company filed for bankruptcy under Chapter 11 petitions in January 2019. The reorganization plan for PG&E requires the approval of bankruptcy court and the California Public Utilities Commission. Its newest plan is an effort to comply with Bill 1054, which allows the Commission to supervise and regulate public utilities.
The company released a statement in February of this year detailing a plan to raise more than $25 billion to exit bankruptcy by the required June 30 date, which it needs to meet to receive funds from a state insurance policy. This followed a ruling by a federal court that compelled PG&E to halt its dividend payments to shareholders to instead expand its wildfire prevention efforts.
PG&E has been under considerable scrutiny in the past decade for its lack of gas pipeline safety measures. PG&E was compelled by the court to halt its dividend payments through an extension of its probation for a criminal conviction related to its involvement in the 2010 San Bruno pipeline explosion. The California Public Utilities Commission also brought proceedings against the company for allegedly falsifying gas pipeline safety records, thereby contributing to the explosion.
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