SAN FRANCISCO (AP) – A federal judge on Tuesday approved a settlement that moves Pacific Gas & Electric closer to getting out of bankruptcy, signing off on a deal to refinance billions of dollars in debt to pay off PG&E bondholders.
The bondholders had threatened to cause problems for the nation’s largest utility. As part of the truce, the bondholders agreed to abandon an alternative plan for getting PG&E out of bankruptcy and support the company’s blueprint instead.
In the past few months, PG&E has also negotiated settlements totaling $25.5 billion to appease homeowners, businesses, insurers and government agencies who had claimed more than $50 billion in losses from a series of catastrophic wildfires blamed on the utility’s dilapidated electrical grid and managerial negligence.
PG&E now appears to be well-positioned to emerge from bankruptcy by June 30, but still faces one formidable stumbling block: staunch opposition from California Gov. Newsom and other elected officials. They have threatened a government-backed takeover of the company unless far more dramatic changes are made.
PG&E last week expressed confidence that it will be able to satisfy Newsom by the June 30 deadline to emerge from bankruptcy.
Newsom, state lawmakers and PG&E’s chief regulatory agency in California hold unusual leverage over the company because of a wildfire insurance fund that the state created. Obtaining funding from the state program is a key component in PG&E’s reorganization, but the company requires state approval by the June deadline to qualify.
Copyright 2020 The Associated Press.