PG&E Announces $13.5 Billion Deal to Resolve Wildfire Claims

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PG&E filed for bankruptcy protection in January amid mounting liability over recent fires and intense scrutiny for failing to properly inspect its giant network of power lines. (Justin Sullivan/Getty Images)

Updated Sunday at 3:05 p.m.

PG&E has reached a $13.5 billion deal to settle claims stemming from recent catastrophic fires blamed on its equipment, marking a key milestone in the utility's plan to exit from Chapter 11 bankruptcy.

In an announcement Friday, the company said the agreement resolves all major claims related to the North Bay fires of 2017, last November's devastating Camp Fire, the 2016 Ghost Ship warehouse fire in Oakland and the 2015 Butte Fire.

"Since the beginning of the Chapter 11 process, getting wildfire victims fairly compensated, especially the individuals, has been our primary goal," PG&E CEO Bill Johnson said in a statement.

The utility filed for bankruptcy protection in January amid mounting liability over recent fires and intense scrutiny for failing to properly inspect its extensive network of power lines. The new agreement is the third significant settlement PG&E has reached in its bankruptcy case and is seen as a big win for lawyers representing wildfire victims.

"This is the fastest and most certain way to get fire victims paid so that they can begin to recover from those tragedies," said attorney Millbrae-based Amanda Riddle.

Napa state Sen. Bill Dodd, a longtime critic of PG&E, said he thinks the settlement is "pretty darn good."

"I would hope, though, that it wouldn't take too long and there wouldn't be too many obstacles to get this money," Dodd said. "I mean, that just further victimizes, you know, people that have just had so much go wrong in their lives as a result of these fires. So my hope is the settlement's approved and distributed as soon as possible."

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Out of an estimated 100,000 wildfire victims, only 70,000 have filed claims, according to Patrick McCallum, a wildfire victim who runs a lobbying firm that represents a wildfire victims group known as Up from the Ashes.

"$13.5 billion divided by 70,000—of course each person's amounts are different—we think it's going to cover most of what's needed to make victims whole," McCallum said.

The settlement can also be seen as a win for PG&E. According to Jared Ellias, bankruptcy expert and professor at UC Hastings College of the Law, Friday's announcement marks substantive progress for the utility company’s bankruptcy case.

"It strongly suggests that this Chapter 11 case is coming to a conclusion, which will mean that PG&E will be able to leave bankruptcy next year, and that the wildfire victims will be able to get paid, and really importantly, they'll be able to get out of bankruptcy before next year's fire season," said Ellias.

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Ellias said it's "exciting" that the lawyers representing the wildfire victims have come to an agreement with the company on the settlement number. It suggests that lawyers' financial analysis concluded "this is a good amount of money for the wildfire victims."

Since the exact details of the settlement have yet to be released, Ellias said, "It's still too early to tell exactly what this announcement is going to mean for wildfire victims. In terms of the timing of payment and how exactly payment is going to come, we'll need to learn more."

Wildfire victims must file claims by a Dec. 31 deadline, which was extended from October.

Many victims, particularly those from the Camp Fire who couldn't find shelter in Butte County due to limited space, had to move out of state or in with relatives, McCallum said, "So it's been difficult to get the information to them."

Tubbs Fire victim Will Abrams is holding off on celebrating.

"These settlements could take 10-plus years to litigate and deals will need to be negotiated with insurers before payments are released, sometimes in installment payments." Abrams said.

"I hope that is not the case, but the devil is in the details, and I'm not confident that this will make victims whole, who lost everything."

The multi-billion dollar deal is still subject to approval in bankruptcy court.

KQED's Lily Jamali and Julie Chang contributed reporting to this story.

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