PG&E reached a tentative $13.5 billion settlement to resolve claims in recent devastating wildfires.
Over the summer, PG&E already proposed raising rates to reduce wildfire risks. Now, rate hikes could be closer to reality if this settlement passes.
In the Central Valley, customers could be paying more than others in the state.
“There’s plenty of blame to go around,” said Jesse Frederick, the Vice President of WZI Inc., an energy consulting firm. ” PG&E is the easiest one to point the finger at because their wires go to every one of our houses. The fires started with their wires.”
$13.5 billion would help compensate victims from the 2015 Butte Fire, Oakland’s 2016 Ghost Ship Fire, a series of 2017 Northern California fires, and the 2018 Camp Fire, the deadliest in the state’s history.
Collectively, these fires killed hundreds of people and destroyed tens of thousands of structures.
PG&E says this settlement would be a big step in getting itself out of bankruptcy.
“It’s an insane notion that we have in California that we have a utility the size of almost all of New England, and its business plan is to survive from bankruptcy to bankruptcy,” Frederick said.
According to Frederick, part of the money could come from bonds and shareholders, but it would mostly come from PG&E customers.
“At the end of the day, the ratepayers will be on the hook for a good portion of it simply because PG&E can’t afford to go bankrupt,” Frederick said.
He believes customers in the Central Valley would be hit hardest, even though most of the wildfires occurred in Northern California.
“Our climate is so hot here that we end up paying more in terms of the amount of electricity we use,” Frederick said.
In a statement, PG&E CEO Bill Johnson said in part, “We share the state’s focus on helping mitigate the risk of future wildfires and we will continue to do everything we can to help reduce those risks across our system.”
All of PG&E’s bankruptcy reorganization plans have to be completed by June of next year.
This $13.5 billion settlement still needs to be approved by a court.