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PG&E won't pay $4M Camp Fire fine from $13.5B wildfire victims' fund

PG&E announced in San Francisco Monday that it has given up a controversial plan to pay a $4 million criminal fine to Butte County out of a proposed $13.5 billion trust to compensate wildfire victims.

Instead, the utility said, the criminal penalty for causing 84 deaths in the 2018 Camp Fire will paid from the interest on a different fund that is also part of PG&E's proposal for exiting from bankruptcy court protection.

That fund is an $11 billion settlement to compensate insurance companies for wildfire loss claims they have already paid.

"As a result, there will be no reduction in the amount available for wildfire victims," PG&E said in a news release.

The $4 million penalty is the maximum allowed for PG&E's planned guilty plea to 84 counts of manslaughter and one count of illegally causing the Camp Fire, which resulted from a broken hook on a transmission tower. The utility is scheduled to plead guilty and be sentenced in Butte County Superior Court on April 24.

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The penalty includes $3.5 million in fines and $500,000 to the office of Butte County District Attorney Mike Ramsey for the cost of the investigation.

PG&E filed for Chapter 11 bankruptcy protection last year, citing billions of dollars in claims for losses from wildfires caused by failures in its electrical equipment. The Chapter 11 procedure enabled it to freeze its debts while seeking financial reorganization.

The utility's plan, which must be approved by U.S. Bankruptcy Judge Dennis Montali and the California Public Utilities Commission, includes the $13.5 billion trust for uncompensated victims, the $11 billion insurance settlement and $1 billion to local governments.

Montali will hold a hearing on the plan on May 27.

The utility is seeking to gain the approvals in time to meet a June 30 deadline for eligibility for a new state wildfire insurance fund, which would be paid for by a combination of shareholders and customers of investor-owned utilities.

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In another bankruptcy court development Monday, Montali dismissed a lawsuit by a Napa County grape grower seeking compensation for losses caused to businesses and residents from several large-scale power shutoffs carried out in the North Bay by PG&E in the fall of 2019 to prevent wildfires during high winds.

Montali said the lawsuit's claims were outside the authority of the bankruptcy court because the California Public Utilities Commission was in charge of regulating the Public Safety Power Shutoffs.

"Any such claim interferes with the CPUC's exclusive regulatory authority over such shutoffs," Montali wrote.

Vineyard owner Anthony Gantner had sought to make his lawsuit a class action on behalf of all businesses and residents that suffered losses from the blackouts. His lawsuit said he didn't disagree with the need for the shutoffs, but wanted to hold PG&E liable for allegedly inadequate equipment maintenance and monitoring that led to dangerous conditions requiring the blackouts.

Gantner's lawyer was not immediately available for comment.

— Bay City News Service

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PG&E won't pay $4M Camp Fire fine from $13.5B wildfire victims' fund

Uploaded: Tue, Mar 31, 2020, 2:37 pm

PG&E announced in San Francisco Monday that it has given up a controversial plan to pay a $4 million criminal fine to Butte County out of a proposed $13.5 billion trust to compensate wildfire victims.

Instead, the utility said, the criminal penalty for causing 84 deaths in the 2018 Camp Fire will paid from the interest on a different fund that is also part of PG&E's proposal for exiting from bankruptcy court protection.

That fund is an $11 billion settlement to compensate insurance companies for wildfire loss claims they have already paid.

"As a result, there will be no reduction in the amount available for wildfire victims," PG&E said in a news release.

The $4 million penalty is the maximum allowed for PG&E's planned guilty plea to 84 counts of manslaughter and one count of illegally causing the Camp Fire, which resulted from a broken hook on a transmission tower. The utility is scheduled to plead guilty and be sentenced in Butte County Superior Court on April 24.

The penalty includes $3.5 million in fines and $500,000 to the office of Butte County District Attorney Mike Ramsey for the cost of the investigation.

PG&E filed for Chapter 11 bankruptcy protection last year, citing billions of dollars in claims for losses from wildfires caused by failures in its electrical equipment. The Chapter 11 procedure enabled it to freeze its debts while seeking financial reorganization.

The utility's plan, which must be approved by U.S. Bankruptcy Judge Dennis Montali and the California Public Utilities Commission, includes the $13.5 billion trust for uncompensated victims, the $11 billion insurance settlement and $1 billion to local governments.

Montali will hold a hearing on the plan on May 27.

The utility is seeking to gain the approvals in time to meet a June 30 deadline for eligibility for a new state wildfire insurance fund, which would be paid for by a combination of shareholders and customers of investor-owned utilities.

In another bankruptcy court development Monday, Montali dismissed a lawsuit by a Napa County grape grower seeking compensation for losses caused to businesses and residents from several large-scale power shutoffs carried out in the North Bay by PG&E in the fall of 2019 to prevent wildfires during high winds.

Montali said the lawsuit's claims were outside the authority of the bankruptcy court because the California Public Utilities Commission was in charge of regulating the Public Safety Power Shutoffs.

"Any such claim interferes with the CPUC's exclusive regulatory authority over such shutoffs," Montali wrote.

Vineyard owner Anthony Gantner had sought to make his lawsuit a class action on behalf of all businesses and residents that suffered losses from the blackouts. His lawsuit said he didn't disagree with the need for the shutoffs, but wanted to hold PG&E liable for allegedly inadequate equipment maintenance and monitoring that led to dangerous conditions requiring the blackouts.

Gantner's lawyer was not immediately available for comment.

— Bay City News Service

Comments

Nicholas Carlin
another community
on Mar 31, 2020 at 4:52 pm
Nicholas Carlin, another community
on Mar 31, 2020 at 4:52 pm
Like this comment

I am Mr. Gantner's attorney. To my knowledge, no one from your publication attempted to contact me.

Judge Montali just told one million households in California who were harmed by these blackouts to stuff it.

There was no evidence at all showing HOW this lawsuit would hinder the PUC's ability to regulate PG&E beyond the bare assertion by PG&E and the CPUC (who historically have had an overly cozy relationship) that it would. And whether there was a factual basis for that assertion should have been just that - a question of fact, not something to be determined on a Rule 12 motion.

We appreciate that Judge Montali wants to move this Bankruptcy case toward conclusion by the June 30 deadline, and that this case had the potential to "muck up the works", but that is no justification for denying one million Californians their day in court.

We believe the ruling was wrong and will appeal.

Nicholas A. Carlin
nac@phillaw.com
Phillips, Erlewine, Given & Carlin LLP


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