PG&E Corporation (NYSE:PCG) has reportedly agreed for a settlement with wildfire victims in California. As per the agreed deal, the company will pay $13.5 billion to the victims of the wildfire in the state.
Comes out of bankruptcy
PG&E reached a deal on Friday to come out of the bankruptcy. In January 2019, the company applied for chapter 11 protection on the backdrop of liabilities over $30 billion. According to the investigators, the devastating wildfires in 2017 and 2018 are linked to the equipment of PG&E. The state regulators said PG&E failed to inspect and replace the faulty lines in time. As a result, the faulty line has sparked the wildfire. Almost 85 people died in the wind-driven campfires caused by the transmission lines of PG&E in Paradise and the adjoining areas.
Bill Johnson, CEO of PG&E, said the company achieved an important milestone. It helps the company to emerge from chapter 11 and become one of the leading utilities for the communities. However, the deal is subject to satisfying certain conditions and awaits confirmation from the US Bankruptcy Court.
Deadline to exit bankruptcy
PG&E faces a deadline of June 30, 2020, to exit bankruptcy. It allows the company to take part in the wildfire fund backed by the state to mitigate the threats caused to the utilities from the wildfires. Johnson said the company shares the focus of the state to reduce the risks of wildlife fires in the future. PG&E will put in efforts to mitigate fire risks across its systems. The company earlier reached an accord with counties, cities, and other public entities for $1 billion. It also entered a deal for $11 billion with the insurers, which are related to the wildfires.
PG&E is under renewed criticism for not taking precautionary measures like switching off the power to safeguard against wildfires caused due to windy and dry weather. Newscom blamed the company for not doing enough to secure and maintain power lines from the damages caused due to wind. The consumer activists, state regulators, and the governor lambasted the actions and said they are too broad. PG&E executives defended the actions and said the power outage is to protect the public.