By JOSH FRIEDMAN
California Gov. Gavin Newsom voiced strong opposition to PG&E’s plan to emerge from bankruptcy, raising questions about the viability of the company’s reorganization effort.
In January, faced with approximately $30 billion in wildfire-related liabilities, PG&E filed for Chapter 11 bankruptcy. The company recently announced a $13.5 billion settlement that would resolve all claims related to the deadly and destructive Northern California wildfires that PG&E allegedly caused.
On Friday, Newsom authored a letter to PG&E CEO William Johnson disapproving of the utility’s reorganization plan. Newsom argued PG&E’s plan does not put the company in a position to provide safe, reliable and affordable electricity to customers.
“The state remains focused on meeting the needs of Californians including fair treatment of victims – not on which Wall Street financial interests fund an exit from bankruptcy,” Newsom wrote.
California’s governor also criticized the utility for causing recent blackouts across the state as a preemptive measure to prevent wildfires. Likewise, he demanded changes to PG&E’s board of directors.
Newsom stated in the letter to Johnson that PG&E falls woefully short of complying with AB 1054, the state’s new wildfire fund law. AB 1054 allows utilities to tap into a pool of state funds in order to pay wildfire-related claims.
The governor argued PG&E’s reorganization plan is not financially viable without AB 1054 funds.
Under AB 1054, the California Public Utilities Commission must review PG&E’s reorganization plan. If the PUC does not approve of the plan, PG&E’s bankruptcy process could drag on.
PG&E’s stock plunged from above $11 to below $9 when markets opened Monday morning.