PG&E clears hur­dle with debt re­fi­nanc­ing

Antelope Valley Press - - NEWS - By MICHAEL LIEDTKE AP Busi­ness Writer

SAN FRAN­CISCO — A fed­eral judge on Tues­day ap­proved a set­tle­ment that moves Pa­cific Gas & Elec­tric closer to get­ting out of bank­ruptcy, but the trou­bled util­ity still must nav­i­gate net­tle­some ob­sta­cles from the state of Cal­i­for­nia.

U.S. Bank­ruptcy Judge Dennis Mon­tali signed off on the deal to re­fi­nance bil­lions of dol­lars in debt to pay off PG&E bond­hold­ers.

The bond­hold­ers had threat­ened to cause prob­lems for the na­tion’s largest util­ity. But as part of the truce, they agreed to aban­don an al­ter­na­tive plan for get­ting PG&E out of bank­ruptcy and sup­port the com­pany’s blue­print.

In the past few months, PG&E has also ne­go­ti­ated set­tle­ments to­tal­ing $25.5 bil­lion to ap­pease home­own­ers, busi­nesses, in­sur­ers and gov­ern­ment agen­cies who had claimed more than $50 bil­lion in losses from a se­ries of cat­a­strophic wild­fires blamed on the util­ity’s di­lap­i­dated elec­tri­cal grid and man­age­rial neg­li­gence.

One fire vic­tim, Will Abrams, tried un­suc­cess­fully Tues­day to con­vince Mon­tali to re­ject PG&E set­tle­ment with the note­hold­ers be­cause he be­lieves it will help the com­pany push through an un­fair plan.

“This is head­ing in the wrong di­rec­tion,” Abrams told Mon­tali.

PG&E now ap­pears to be well po­si­tioned to emerge from bank­ruptcy by June 30, the dead­line for the state to ei­ther ap­prove or re­ject the plan. But the util­ity still faces one for­mi­da­ble stum­bling block: staunch op­po­si­tion from Cal­i­for­nia Gov. New­som and other elected of­fi­cials who have threat­ened a gov­ern­ment-backed takeover of the com­pany un­less far more dra­matic changes are made.

PG&E, which pro­vides power to about 16 mil­lion peo­ple, last week ex­pressed con­fi­dence it will be able to sat­isfy New­som by the June 30 dead­line to emerge from bank­ruptcy.

In a sign of its con­fi­dence, PG&E used part of Tues­day’s hear­ing to work out a timetable that would en­able the com­pany to put the bank­ruptcy be­hind it just 17 months af­ter the process be­gan. That would be much faster than the three years it took PG&E to re­or­ga­nize when it filed for bank­ruptcy in 2001.

Both New­som and PG&E are un­der pres­sure to pay the more than 70,000 peo­ple who have filed claims af­ter los­ing fam­ily mem­bers and prop­erty in deadly 2017 and

2018 fires.

PG&E is set­ting up a $13.5 bil­lion fund to pay the wild­fire vic­tims, but that deal is still a big point of con­tention in the case. Since the set­tle­ment was reached in De­cem­ber, Mon­tali has been swamped with let­ters from vic­tims wor­ried that too much of the money will go to at­tor­neys and gov­ern­ment agen­cies seek­ing re­im­burse­ment for the bil­lions of dol­lars doled out dur­ing and af­ter the wild­fires.

Mon­tali noted the vic­tims’ con­cerns Tues­day and set a Feb. 21 dead­line for the lawyers to pro­vide a clear ex­pla­na­tion of how vic­tims will file claims, with a time­line ex­plain­ing how they can ex­pect to be paid. A more ex­haus­tive break­down must be filed on March 10.

A hear­ing on PG&E’s dis­clo­sure state­ment, the equiv­a­lent of the voter pam­phlets tra­di­tion­ally dis­trib­uted in elec­tions, will also be held on March 10. If Mon­tali ap­proves the state­ment, vot­ing on PG&E’s re­or­ga­ni­za­tion plan will be­gin in early April and be com­pleted by May 15. About 415,000 dif­fer­ent par­ties are ex­pected to re­ceive the dis­clo­sure state­ment, a mas­sive un­der­tak­ing that il­lus­trates the scope of PG&E’s tur­moil.

AS­SO­CI­ATED PRESS

In this Oct. 31file photo, smoke from the Maria Fire bil­lows above Santa Paula. A fed­eral judge has ap­proved a set­tle­ment that moves Pa­cific Gas & Elec­tric closer to get­ting out of bank­ruptcy.

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