SACRAMENTO, Calif. _ PG&E Corp. said Friday it has reached an $11 billion settlement with insurance companies over the 2017 and 2018 wildfires, marking a major turning point in its efforts to exit bankruptcy.
The utility said the tentative settlement covers 85% of the insurance claims stemming from the wine country fires of October 2017 and last November's Camp Fire. The Camp Fire destroyed most of Paradise and killed 86 people, more than any other fire in the state's history.
The agreement still leaves one major group of wildfire claimants without a deal: victims who were uninsured or underinsured. PG&E earlier this week offered those victims $8.4 billion, a sum that was rejected as inadequate by their lawyers and lobbyists.
PG&E said it is lining up new debt and equity financing to pay the insurance settlements. In a plan filed in Bankruptcy Court on Monday, the utility said it was offering the insurers a maximum of $8.5 billion. On Friday, it said it will amend that plan and is working with financial backers to get that funding; it already has commitments of more than $14 billion from investors.
The insurance companies, in a prepared statement, said: "While this proposed settlement does not fully satisfy the approximately $20 billion in group members' unsecured claims, we hope that this compromise will pave the way for a plan of reorganization that allows PG&E to fairly compensate all victims and emerge from Chapter 11 by the June 2020 legislative deadline."
Bill Johnson, PG&E's chief executive, said "today's settlement is another step in doing what's right for the communities, business, and individuals affected by the devastating wildfires." The company reaffirmed its commitment to paying a $1 billion settlement, announced earlier, with local governments affected by the fires.
Johnson added that PG&E is working "to resolve the remaining claims of those who've suffered."
PG&E is scrambling to secure approval for its bankruptcy reorganization plan. Under a deadline set by the Legislature, it must have a deal to exit bankruptcy by June 30 to be eligible to participate in a wildfire insurance fund established by the state earlier this year. The fund will pay claim and limit liabilities for the major California utilities for damages resulting from future wildfires.
