PG&E, Insurers Reach $11 Billion Settlement to Resolve Wildfire Claims

Pacific Gas and Electric Company announced a $11 billion settlement representing about 85 percent of insurance claims associated with the 2017 and 2018 wildfires in California, according to a Sept. 13 press release. The agreement comes on the heels of PG&E’s reorganization plan filed with the U.S. Bankruptcy Court for the Northern District of California, proposing to pay nearly $18 billion for claims stemming from the wildfires. The utility must emerge from bankruptcy by June 30, 2020, the deadline set forth by legislation enacted in July for participation in the newly-established state wildfire fund.

The agreement, subject to approval of the bankruptcy court overseeing PG&E’s Chapter 11 case, is related to payments made by insurance companies to individuals and businesses with coverage for wildfire damage. In June, the utility reached a $1 billion agreement with 18 local public entities to resolve their claims related to 2015, 2017, and 2018 wildfires. Proceedings concerning the third and final group of claims are currently pending in federal district court and state court, according to PG&E.

PG&E filed to reorganize under Chapter 11 of the U.S. bankruptcy code to deal with billions of dollars in potential liability arising from the 2017 and 2018 Northern California wildfires. The catastrophic wildfires in recent years have led to sweeping reforms including legislation to provide investor-owned utilities with $21 billion to help them pay for wildfire damages linked to their transmission equipment.