New Filings Provide Update on Key Elements of Plan to Exit Bankruptcy as a Reimagined Utility
PG&E Corporation and Pacific Gas and Electric Company (together, “PG&E” or the “company”) today submitted regulatory and court filings outlining the key elements of the company’s updated Chapter 11 Plan of Reorganization. PG&E submitted testimony in the California Public Utilities Commission (CPUC) Plan of Reorganization proceeding and filed its updated Plan with the Bankruptcy Court.
Based on these filings, PG&E remains on track to have its Chapter 11 Plan confirmed by June 30, 2020, the deadline for participating in the state’s new go-forward wildfire fund. Upon emergence from Chapter 11, PG&E will be a financially stable company positioned to continue prioritizing safe operations and customer focus while meeting California’s energy needs and clean energy goals in a changed climate.
“Under our Plan, the company will emerge from Chapter 11 as a reimagined utility with an enhanced safety structure, improved operations, and a board and management team focused on providing the safe, reliable, and clean energy our customers expect and deserve. Our 23,000 PG&E employees are striving every day to deliver that service and to build the utility of the future. We are committed to emerge from Chapter 11 by June 30, 2020, in a manner that allows us to help lead California toward the future, meeting the highest safety, governance, and operational standards,” said CEO and President of PG&E Corporation Bill Johnson.
As explained in its testimony, PG&E believes its Plan meets both the letter and spirit of Assembly Bill (AB) 1054, including being rate neutral on average to customers. The Plan also addresses concerns the Governor raised in his December 13, 2019, public letter to the company. PG&E appreciates the Governor’s input and is open to further discussions with the Governor’s Office and other stakeholders should they have additional input as the process unfolds. PG&E looks forward to participating fully in the CPUC’s proceeding to review its updated Plan.
Key updated safety, governance, and operational elements of the Plan include:
- Refreshing the Boards of Directors of PG&E Corporation and Pacific Gas and Electric Company so that the Boards will have the necessary expertise and skills to oversee the company post-emergence;
- Implementing a plan to regionalize the company’s operations and its infrastructure to enhance the company’s focus on local communities and customers;
- Further strengthening PG&E’s corporate governance by appointing an independent safety advisor after the term of the court-appointed Federal Monitor expires;
- Establishing a newly expanded role of Chief Risk Officer who will report directly to the PG&E Corporation CEO and have oversight of risks associated with PG&E’s operations;
- Establishing a newly expanded role of Chief Safety Officer who will report directly to the PG&E Corporation CEO and have oversight of PG&E’s strategy to further improve public and workforce safety;
- Forming an Independent Safety Oversight Committee (ISOC) with non-PG&E employees to provide independent review of the company’s operations, including safety and regulatory compliance, safety leadership, and operational performance;
- Committing to enhanced safety metrics and stricter regulatory oversight with escalating enforcement mechanisms;
- Reforming executive compensation to further tie it to safety performance; and
- Assuming all pension obligations, other employee obligations, and collective bargaining agreements with labor unions, and all power purchase agreements and community choice aggregation servicing agreements.
Key updated financial elements of the Plan include:
- Paying value in excess of $25 billion to wildfire victims through the settlements reached with individual victims, subrogation claimants, and public entities; and
- Emerging with a financing structure that protects customer rates and positions the company for long term success. This includes saving PG&E’s customers nearly $1 billion through the previously announced settlement with noteholders and contributing shareholder credits of approximately $8 billion so that the plan is neutral on average to customers.
Today’s filings are available on PG&E Corporation’s website at this link.
This press release includes forward-looking statements that are not historical facts, including statements about the beliefs, expectations, estimates, future plans and strategies of PG&E Corporation and Pacific Gas and Electric Company (the “Utility”), including but not limited to their Chapter 11 emergence plan. These statements are based on current expectations and assumptions, which management believes are reasonable, and on information currently available to management, but are necessarily subject to various risks and uncertainties, including the possibility that the conditions to confirmation of or effectiveness of the Plan will not be satisfied. In addition to the risk that these assumptions prove to be inaccurate, factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include factors disclosed in PG&E Corporation and the Utility’s joint Annual Report on Form 10-K for the year ended December 31, 2018, their joint Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019, June 30, 2019 and September 30, 2019, and their subsequent reports filed with the Securities and Exchange Commission. Additional factors include, but are not limited to, those associated with the Chapter 11 cases of PG&E Corporation and the Utility that commenced on January 29, 2019. PG&E Corporation and the Utility undertake no obligation to publicly update or revise any forward-looking statements, whether due to new information, future events or otherwise, except to the extent required by law.