California governor to decide on PG&E bankruptcy plan

CALIFORNIA (Reuters) – California Governor Gavin Newsom was expected to decide late on Friday whether a bankruptcy reorganization plan submitted by PG&E Corp (PCG.N), the state’s largest investor-owned utility company, complies with a recently enacted state wildfire law. The state has until midnight on Friday to inform PG&E if its plan, including a $13.5 billion (£10.52 billion) settlement with victims of wildfires blamed on the company’s power lines, meets criteria established under the statute, known as Assembly Bill 1054, which was enacted in July. Newsom was expected to make a public statement on the reorganization plan on Friday night, according to a spokesman for the governor, Nathan Click. The law requires the utility under reorganization to show improved safety in operating its transmission lines, progress toward achieving state clean-energy goals and fair treatment of ratepayers. Otherwise the state might take action on its own to force a restructuring. If Newsom decides PG&E’s plan falls short, the company would still have until Tuesday to propose changes to meet the state’s demands, a necessary step before it can submit its plan for a vote by creditors and final approval from a bankruptcy judge in San Francisco. PG&E filed for Chapter 11 bankruptcy protection in January citing projected civil liabilities in excess of $30 billion from blazes in 2017 and 2018 sparked by its equipment, including a wildfire last year that killed 85 people and destroyed the town of Paradise, ranking as California’s deadliest wildfire on record. In recent months, PG&E resorted to a series of widespread power shut-offs that left hundreds of thousands of its customers without electricity for days during periods of extremely high winds and dry conditions.