PG&E supports California proposal for oversight

Bloomberg

PG&E Corp said it largely supports a proposal from California’s top that would allow for greater oversight of the power giant if it fails to reform itself and causes another catastrophic fire after exiting bankruptcy.
The company said it agrees with the establishment of a six-step enforcement process proposed by California Public Utilities Commission President Marybel Batjer. That would be triggered by specific events, including operational and safety breaches, according to a filing on March 13.
However, PG&E pushed back against a request that the company’s entire board be replaced, saying it doesn’t believe a complete turnover is “appropriate,” although it expects a “substantial number” of directors will be new when it exits Chapter 11. The company’s filing was in response to a number of proposed amendments by Batjer to its reorganisation plan.
PG&E is seeking to win the approval of both state regulators and a bankruptcy court for its turnaround plan by June 30 to qualify for a state fund established to provide financial assistance for future fire-damage claims. The California utility filed for Chapter 11 bankruptcy protection more than a year ago with an estimated $30 billion in liabilities from wildfires blamed on its equipment.

PG&E said it is on track to exit bankruptcy by the state deadline, having reached $25.5 billion in settlements with fire victims, insurers and government agencies over fire damages.
“We welcome the CPUC’s input regarding our plan for emerging from Chapter 11 and building a re-imagined PG&E,” the company said in a statement.
The commission president’s recommendations echo demands made by California Governor Gavin Newsom, who has said that PG&E’s reorganization plan falls short of state requirements. Newsom said in December he wanted PG&E’s restructuring plan to include an option for a state takeover if the utility gets into trouble again. He’s also called for an overhaul of the company’s board and wants PG&E to come up with a better financing plan.
The governor said in court papers last week that PG&E has addressed some of his concerns, and his office continues to hold talks with the utility.
PG&E said in its filing Friday that it believes its reorganization proposal complies with state requirements, and said it will continue talks with the governor’s office about its plan.
The escalating enforcement steps proposed by Batjer include appointing a third-party monitor, chief restructuring officer, a receiver or potentially revoking the company’s operating license.
PG&E proposed Friday that the five-member commission — and not its executive director — should decide if PG&E requires a third-party monitor or greater oversight. The utility said it also wants to have a year to correct any safety or compliance issues before the commission decides if it needs to take the step of appointing a chief restructuring officer.
Meanwhile, a bankruptcy judge is expected to approve PG&E’s bankruptcy disclosure statement next week that will allow the company to begin soliciting votes for its turnaround proposal.