Dive Brief:
- Pacific Gas & Electric on Monday warned that a plan of reorganization proposed by bondholders and wildfire victims would cost customers billions of dollars compared with its own proposal on file with a federal bankruptcy court.
- Judge Dennis Montali rejected creditors' previous attempts to propose their own plan, but will consider whether to allow the new plan at an Oct. 8 hearing. The bondholder-wildfire victim proposal includes $24 billion for fire claims, while PG&E's plan proposes $17.9 billion toward those claims.
- PG&E will also need to file an amended plan of reorganization to reflect settlements reached with two of three major groups of wildfire victims. The utility said Monday it has finalized a previously-announced agreement related to the 2017 Northern California wildfires and 2018 Camp Fire.
Dive Insight:
PG&E said its reorganization plan "will continue to be updated as developments require" in a Monday statement. But some analysts say the new competing plan could gain traction in Montali's court.
The combination of bondholders and wildfire victims "likely has a good shot at ending the utility's control," a Bloomberg Intelligence analyst told the Los Angeles Times. Montali previously rejected motions to terminate a period of exclusivity during which only PG&E can bring forward a plan.
The latest plan "is a blatant attempt to unjustly enrich the noteholders who proposed it," according to PG&E, and "would cost all PG&E customers billions of dollars in additional interest payments over 15 years — while providing an unfair windfall for the noteholders and plaintiffs' attorneys."
Shares for the utility's parent company, PG&E Corp., dropped as much as 10% after the competing plan from bondholders and wildfire victims was announced.
PG&E filed for bankruptcy in January, saying its wildfire liabilities could exceed $30 billion related to 2017 and 2018 fires.
California's wildfires continue to vex the state's electric utilities. PG&E announced Sunday that it would likely need to shut off power in nine Northern California counties starting Monday evening, potentially impacting 124,000 customers.
