California Governor Gavin Newsom has signed a bill that creates a $21 billion fund to help struggling Pacific Gas & Electric (PG&E) with its financial woes. The fund will also be available to help other investor-owned utilities cover their cost of wildfires caused by their equipment.
The governor called the bill “decisive action” and added, “Strengthening our state’s wildfire prevention, preparedness and mitigation efforts will continue to be a top priority for my administration and our work with the legislature.”
The other two entities in this case are Southern California Edison and San Diego Gas & Electric.
S&P Global Ratings had threatened to downgrade the credit ratings of those two utilities. PG&E’s rating has already dropped due to the Chapter 11 bankruptcy and its $30 billion in liabilities from causing wildfires in 2017 and 2018.
As part of the bill, the utilities will put a combined $5 billion toward improvements to their electrical grids. That gives them access to the fund. Customers of the utilities will also contribute an equal amount of money via a 15-year extension of an existing rate increase.
There’s more. The bill was co-authored by Democrat Sen. Bill Dodd. He said to qualify for this fund, PG&E must make its payments as soon as possible after its bankruptcy and needs to be done with the process of bankruptcy within a year.
Part of how the company is going to get the bankruptcy done is to get all of the claims submitted in the next four months. To get that done PG&E is going to do a multi-million dollar campaign telling victims they have until Wednesday, October 21st to submit a claim for losses caused by one of the fires the company’s equipment caused.
Those claims must be from damages done before January 29th when PG&E filed for bankruptcy. The outreach is going to involve all forms of media and will cost PG&E $2.5 million.
Source links: Reuters, Insurance Journal, San Francisco Chronicle