PG&E Goes Around California Governor In Restructuring Effort

PG&E Corporation PCG announced late Monday that it amended its restructuring plan to advance its $13.5-billion settlement with wildfire victims — despite California Gov. Gavin Newsom's view that the plan is noncompliant with state law.

PG&E removed a clause from the proposal that required Newsom’s approval.

PG&E Says It Will Address Newsom's Concerns

PG&E had announced its restructuring plan and victim settlement earlier in December. Newsom said Friday that the plan falls “woefully short” of compliance with utilities bill AB 1054, and he demanded a board shakeup and improved financing structure for the utility. 

“The company fully intends to comply with the provisions of AB 1054 and will continue to address the concerns in the letter to the company from the Governor dated December 13, 2019,” PG&E said in response to Newsom. 

“PG&E has been engaged in constructive dialogue to address those concerns with the common objectives of having PG&E be safe, sound and financially stable upon emergence from Chapter 11. PG&E expects this dialogue to continue.”

Investors Pacific, Elliott Have Competing Plan 

In claiming an ability to move forward without the governor’s permission, PG&E has bought itself time to frame its Chapter 11 bankruptcy restructuring around the settlement and clear settlement-related hurdles in the bankruptcy process.

Investors Pacific Investment Management Co. and Elliott Management Corp. have lobbied the governor on their preferred restructuring plan.

PG&E Trades Higher 

As previously planned, a bankruptcy court will proceed with an approval hearing for PG&E’s Tort Claimants RSA on Dec. 17.

Newsom will still be able to weigh in on the bankruptcy case and influence California’s public utilities commission, which must approve any restructuring plan.

The stock was trading 7.07% higher at $10.30 at the time of publication Tuesday.

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