San Francisco Chronicle - (Sunday)
Victims OK PG&E bankruptcy plan
Nearly 90% of California wildfire victims who voted on PG&E Corp.’s plan to pay them and restructure its finances have accepted the proposal, but the company’s problems are far from over.
PG&E must now steer its $57.65 billion restructuring plan through a pivotal monthlong period that will determine whether its blueprint to exit bankruptcy succeeds — and how fire victims are ultimately paid.
PG&E needs to get its plan to exit bankruptcy approved in court and by state regulators by
June 30 to access a $21 billion fund to pay claims from victims of future major wildfires. In the coming days, the company is expected to face two major steps toward that goal: Regulators at the California Public Utilities Commission will weigh whether to approve the plan, and a confirmation trial should start in U.S. Bankruptcy Court.
“It’s all coming together,” said Jared Ellias, a UC Hastings law professor who has been following the case. “The fact that they’re this close to landing the plane is really impressive.”
But the outcome is not guaranteed. Attorneys for various creditors have filed many objections to the company’s bankruptcy plan, and some important elements of the case remain unresolved.
Also, if PG&E fails to meet the June deadline, it could be forced to put itself up for sale, according to the terms of a deal the company previously reached with Gov. Gavin Newsom. And some wildfire victims who object to the way PG&E intends to pay them still want changes to the deal, while other critics of the company have said its bankruptcy plan falls far short.
As it races to wrap up the case, PG&E also faces the loom
ing specter of the 2020 wildfire season, which could prove highly dangerous because of the relatively meager amounts of rain and snow that fell this winter. The company desperately needs to avoid causing more catastrophic wildfires like the ones it started in 2015, 2017 and 2018, all of which prompted it to file for bankruptcy protection last year.
About 51,000 victims of fires blamed on PG&E power lines voted on the company’s bankruptcy plan, and 88% of them chose to approve it, according to court papers filed Friday. PG&E needed twothirds support, and attorneys previously told The Chronicle after the May 15 voting deadline passed that the plan had won widespread approval.
PG&E Corp. CEO Bill Johnson said in a company statement that the favorable vote put the company “one step closer to compensating fire victims and emerging from Chapter 11 as a stronger, financially sound company positioned for longterm success.”
“PG&E remains committed to prioritizing safe operations and customer focus while meeting California’s energy needs and clean energy goals,” Johnson said in the statement.
Nearly 80,000 individual fire victim claims were filed in the PG&E bankruptcy case, suggesting that the total vote count fell far short of full participation. But that’s normal, according to Ellias, the UC Hastings professor.
“That’s as good as you could have possibly gotten,” he said of the number of fire victim voters.
Still, some fire victims have voiced serious concerns about the way the voting process unfolded, pointing to people who said they received their ballot at the last minute or did not get one until the deadline passed.
Those issues motivated San Diego attorney Bonnie Kane, who represents some fire victims involved in the case, to seek an outside review of how the vote occurred. Mikal Watts, a San Antonio lawyer with the largest client base of fire victims, has opposed the effort. U.S. Bankruptcy Judge Dennis Montali is set to consider the matter at a hearing June 4.
Lisa Williams, who survived the 2018 Camp Fire, said victims felt intense pressure to vote for the PG&E plan despite any reservations they may have had. Then many people encountered problems when the time to cast ballots actually arrived, said Williams, who has been involved with a vocal group of fire victims that raised concerns about the plan.
“People gave up,” she said. “It was too difficult. There were so many problems with this whole voting thing.”
Regulators at the state utilities commission were supposed to vote on PG&E’s bankruptcy plan on Thursday. But commission officials delayed the vote one week because they said someone involved in the proceeding, 2017 fire survivor Will Abrams, violated the regulators’ communication rules when he sent them an email two days before the scheduled vote.
Abrams says he thought his message was allowed at the time.
Regardless, the commission vote has attracted attention from protesters who are urging state officials to be much tougher on PG&E as they consider the bankruptcy plan. Demonstrators gathered in front of the commission’s San Francisco offices Wednesday, drawing human outlines on the ground with chalk to represent people killed in fires that PG&E started. Protesters also unfurled banners directed at the governor, one of which read, “We need #powertolive.”
Mari Rose Taruc, coordinator of the Reclaim Our Power Utility Justice Campaign, said the public needs “a better deal” from the PG&E bankruptcy. Such a deal would, in her words, place higher priority on “the health and wellbeing of frontline communities, of frontline workers, of our disabled and medically vulnerable community members.”
Protesters said the PG&E plan has not gone far enough to protect the state from wildfires and the impact of mass power shutoffs intended to prevent more fires.
“We see the crisis that is coming around the corner during fire season,” Taruc said.
An administrative law judge for the utilities commission has recommended that the agency’s governing body approve the plan.
public relations challenge in April, when President Trump wondered at a news conference, without basis, whether using disinfectant “by injection inside or almost a cleaning” could “knock (coronavirus) out in a minute.” Clorox, along with Lysol, immediately told consumers never to consume their products.
Dorer said the company has been ramping up its outreach and consumer education, including working with Facebook to take down misinformation and increasing its ad spending by $50 million in the second half of the year.
“We have changed the way we advertise. We have changed the way we go about engaging with consumers online,” he said. “And we really spend a lot of time and effort and money on the proper use of our disinfecting products.”
In addition, the company has committed $14 million to coronavirus relief, including $400,000 in Oakland.
Dorer said the coronavirus has created a new world, but he hopes there will be a new emphasis on health and wellbeing.
“The business will never be the same after this,” he said.