U.S. Bankruptcy Judge Dennis Montali has moved Pacific Gas & Electric’s Chapter 11 bankruptcy forward. Last week he said yes to a deal the company crafted with bondholders to refinance its billions of dollars of debt.
At one point they threatened to derail the company’s plan but finally agreed to a $25.5 billion settlement that got homeowners, businesses, insurers, and government agencies to climb on board. That means PG&E is on track to meet its bankruptcy goals by June 30th.
It’s the climbing on board that concerns California Governor Gavin Newsom and others in various government positions. They — especially the governor — want dramatic changes in the PG&E plan. Among the concerns is that most of the $13.5 billion going to the victims of the wildfires caused by PG&E will end up in the pockets of attorneys and government entities who paid up front to handle the fires.
One of the things Newsom wants is the entire board of PG&E replaced and its CEO Bill Johnson fired. He also doesn’t think PG&E’s plan puts people first and that the company has placed profit as a higher priority than people.
As a concession the updated bankruptcy plan replaces the board but not Johnson. It also creates two new executive roles within the company. They are a Chief Risk Officer and a Chief Safety Officer. The two will report to the CEO and will be responsible for keeping Californian’s safe from wildfire and other possible problems caused to the public by the company.
It may or may not appease the governor.
PG&E also has problems facing it in the California Legislature. San Fransisco State Sen. Scott Wiener has introduced a bill to purchase all shares of the company for $9 billion. He wants to turn it into a public entity.
Under the bill local governments can purchase pieces of the pie to create their own power district. “PG&E is a failed company,” Wiener said. “PG&E focuses so extensively on pleasing Wall Street and creating returns and dividends for shareholders, it has allowed its infrastructure to deteriorate.”
The company disagrees and company spokesman James Noonan said, “PG&E’s facilities are not for sale. We remain focused on fairly resolving wildfire claims and existing the (bankruptcy) process as quickly as possible.”
Yada yada says Wiener. “You could defend PG&E if you want, but how is that going? They’re burning down entire towns, they are blacking out the power to millions of people. PG&E is a failure and we need to try something new.”
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