Talks may affect PG&E bankruptcy
PG&E Corp. is trying to address Gov. Gavin Newsom’s concerns about its vision to exit bankruptcy and expects the conversations will lead to changes in how the company is overseen, according to a new regulatory filing.
Subsidiary Pacific Gas and Electric Co. said Thursday that it and the PG&E parent company are engaged in “ongoing discussions” with Newsom’s office that likely will alter PG&E’s current plan to emerge from bankruptcy protection this year.
In a filing with the California Public Utilities Commission, PG&E said it believes the talks “will lead to material changes to certain nonfinancial terms” of its bankruptcy exit plan, “such as governance.”
Newsom has been harshly critical of PG&E’s exit plan, calling it “woefully short” of state requirements.
In a December letter, the governor said PG&E should replace its entire board of directors and establish an “escalating enforcement process” that “provides for greater oversight” if the
company fails to fulfill “defined operational and safety metrics.” He said PG&E should establish a path for a takeover by the state or another entity “when circumstances warrant.”
After the letter, PG&E and attorneys for victims of fires the company caused changed their $13.5 billion settlement deal so it no longer required Newsom’s blessing to advance. But the company has continued to talk with Newsom’s office about the broader bankruptcy exit plan.
PG&E spokesman Andy Castagnola said in an email that company representatives are “engaged in constructive discussions and hope to make progress over the coming weeks” regarding the exit plan. The company is speaking to the governor’s office, the utilities commission and others in order “to make the necessary changes to build a stronger, safer and sustainable PG&E,” he said.
Newsom spokesman Nathan Click told The Chronicle that the governor’s office has told PG&E and others what needs to happen in the bankruptcy case and is “still waiting for a proposal that meets those requirements.”
In its filing with the utilities commission, PG&E also referenced settlement negotiations with a group of bondholders who have been pushing a rival bankruptcy exit plan. The company asked the commission for a twoweek delay in a regulatory review of how PG&E should resolve its bankruptcy.
PG&E said the financing of its exit plan will likely change if it settles with the bondholders — and also because of the talks with Newsom’s office. A twoweek delay would allow the commission to consider any changes those discussions produce, PG&E said.
Bloomberg reported Tuesday that PG&E was close to a deal with the bondholders that would give them equity and new debt in the company if they abandon their competing plan.
PG&E’s bankruptcy judge and the utilities commission have to approve an exit plan by June 30 in order for the company to take advantage of a new fund that would protect it from future wildfire costs.