April 21, 2020 / 7:17 PM / a month ago

UPDATE 1-California regulator wants PG&E reorganization plan changes, proposes $2 bln fine

(Adds PG&E’s response)

April 21 (Reuters) - A California regulator has asked PG&E Corp for governance and oversight changes to its reorganization plan, while proposing about $2 billion in penalties for the San-Francisco based utility’s role in causing the devastating 2017 and 2018 wildfires in California.

The proposal “will require PG&E to modify its governance structure, submit to an enhanced oversight and enforcement process if it fails to improve safety, and create local operating regions,” the California Public Utilities Commission (CPUC) said late on Monday.

PG&E filed for Chapter 11 bankruptcy protection in January last year, citing potential liabilities exceeding $30 billion from major wildfires sparked by its equipment in 2017 and 2018. It must exit bankruptcy by June 30 to take part in a state-backed wildfire fund that would help reduce the threat to utilities from wildfires.

Under CPUC Commissioner Clifford Rechtschaffen’s proposed $1.94 billion penalty, an earlier $200 million fine would be “permanently suspended” to ensure that the payment did not reduce PG&E’s funds to meet wildfire victims’ claims.

Both proposals will be voted on next month, CPUC said.

PG&E said in a statement that it would respond within 10 days about the proposed fine.

As for the reorganization plan, the company said it would need time to review the regulator’s suggestions but added that it remained on track to getting its plan confirmed by June 30.

A U.S. bankruptcy judge in December approved PG&E’s $13.5 billion settlement with victims of the deadly California wildfires.

Last month, the company had announced some new commitments in its reorganization plan to emerge from bankruptcy to meet concerns raised earlier by California Governor Gavin Newsom. (Reporting by Kanishka Singh in Bengaluru, editing by Louise Heavens and Richard Chang)

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