A federal bankruptcy judge in California has approved Pacific Gas & Electric’s financing plan to emerge from Chapter 11 reorganization, Kallanish Energy reports.
That plan calls for raising up to $23 billion in financing commitments to support the company and help pay its bills, after California Gov. Gavin Newsom withdrew his opposition to that plan.
Newsom had expressed concerns over the level of debt the company was taking on as it deals with liabilities tied to deadly wildfires in 2017 and 2018, in northern California, as it attempts to upgrade its electrical equipment to avoid more fires in the future.
The financing package includes $9 billion in new equity and nearly $11 billion in debt commitments to support PG&E’s turnaround. The company can also raise $3 billion through new shares under the plan.
The financing plan was approved earlier this week by bankruptcy judge Dennis Montali. Other approvals by Montali and other agencies are still needed.
The utility, based in San Francisco, California, is working to exit Chapter 11 by June 30, if it is to participate in a state-backed fund to help utilities hit by wildfires.
Last month, the company submitted an updated reorganization plan including a new board of directors.
The company and its parent, Pacific Gas & Electric Corp., had filed for Chapter 11 protection in January 2019, in the wake of wildfires that left PG&E with liabilities of $30 billion after its power lines were linked to the fires.
The company has pledged to do more to prevent wildfires, but it claims that preventing wildfires may be impossible and very costly in a state like California.
Under California law, the company is held liable for its operations, even if it is not negligent.
PG&E is regularly cutting power to its 16 million customers during storms to prevent new wildfires from breaking out from its electricity lines.
This post appeared first on Kallanish Energy News.