California governor rejects PG&E bankruptcy plan

Dec. 14 (UPI) -- California Gov. Gavin Newsom has rejected Pacific Gas and Electric's plan to exit bankruptcy and pay a $13.5 billion settlement to Northern California wildfire victims.

PG&E filed an amended reorganization plan in bankruptcy court Tuesday to keep it on track for a June 30 statutory deadline to exit bankruptcy and participate in the state's new wildfire fund.

The filing followed PG&E reaching a $13.5 billion settlement last week for claims related to multiple deadly fires in California.

Still, the utility company's plan doesn't go far enough to make it "positioned to provide safe, reliable and affordable service," Gov. Newsom declared late Friday in a letter to PG&E Chief Executive Bill Johnson.

"The resolution of this bankruptcy must yield a radically restructured and transformed utility that is responsible and accountable," he said, demanding an overhaul of the plan.

Among the demands, Newsom called for a completely new slate of directors subject to state approval and a structure that would allow PG&E's operating license to be transferred "to the state or a third-party when circumstances warrant."

The settlement agreement reached last week with lawyers for more than 70,000 wildfire victims still needed Newsom's approval and will now have to be overhauled to meet the June 30 statutory deadline.

The settlement involves claims from the 2015 Butte Fire, the 2016 Ghost Ship Fire, the 2017 Tubbs Fire, and last year's Camp Fire, though state investigators cleared PG&E in the Tubbs fire and the company does not admit guilt in the Tubbs Fire or the Ghost Ship Fire.

Newsom said along with paying victims, Assembly Bill 1054 requires other changes to how the utility company does business, including a program boost in wildfire prevention and response.

Newsom has demanded an overhaul since a series of deliberate "public safety shutoffs" in October, which blacked out hundreds of thousands of Northern California homes during severe windstorms.

Johnson warned that planned power outages to reduce the risk of wildfires in California could go on for a decade, but Newsom said at the time that was too long and cited the blackouts in his letter Friday.

"PG&E's recent management of the public safety power shutoffs did not restore public confidence," he wrote. "For too long, PG&E has been mismanaged, failed to make adequate investments in fire safety and fire prevention, and neglected critical infrastructure."