PG&E: CPUC approves Pacific Gas & Electric fire violation settlement

By Caroline Salls

Pittsburgh, May 12 – PG&E Corp. said in an 8-K filed Tuesday with the Securities and Exchange Commission that the California Public Utilities Commission has approved a settlement agreement related to an investigation into whether debtor Pacific Gas and Electric Co. violated any laws or orders pertaining to the maintenance and operation of electric facilities involved in igniting wildfires.

PG&E said the CPUC issued an order instituting an investigation on June 27, 2019 in connection with Pacific Gas and Electric facilities that were involved in igniting fires in its service territory in 2017 and 2018.

A settlement was reached on Dec. 17, under which the utility may not seek rate recovery of $1.823 billion in wildfire-related expenses and capital expenditures in future applications and must incur $114 million in shareholder-funded system enhancement initiatives costs.

Also under the settlement, payment of a $200 million fine imposed by the CPUC is permanently suspended.

The utility must also return for the benefit of ratepayers any tax savings generated by shareholder payments for any disallowed operating expenditures.

PG&E said the CPUC’s decision is consistent with modifications proposed in a commissioner’s decision issued on April 30. Wildfire parties have a right to request a rehearing within 30 days of the date of issuance of the CPUC’s ruling, which was made on May 7.

The company said the settlement will take effect when it is approved by the U.S. Bankruptcy Court for the Northern District of California and when the debtors’ Chapter 11 plan takes effect.

According to the 8-K, the CPUC’s capital structure decisions require Pacific Gas and Electric to maintain a 52% equity ratio on average over the period that the authorized capital structure is in place, and to file an application for a waiver to the capital structure condition if an adverse financial event reduces its equity ratio by 1% or more.

PG&E said because of net charges recorded in connection with the 2018 Camp fire and the 2017 Northern California wildfires as of Dec. 31, 2018, the utility submitted to the CPUC a series of applications for a waiver of the capital structure condition, beginning on Feb. 28, 2019.

An administrative law judge issued a proposed decision on April 1 granting the utility’s request for a waiver. The granted waiver runs until the CPUC determines Pacific Gas and Electric’s capital structure in an order instituting investigation to consider the debtors’ plan of reorganization.

On May 7, the CPUC approved the proposed decision.

The administrative law judge also issued a proposed decision on April 20 related to the plan of reorganization that, if adopted, would provide a five-year capital structure waiver. A final decision on the plan is expected this month, the 8-K said.

The electric and natural gas utility is based in San Francisco. The company filed bankruptcy on Jan. 29, 2019 under Chapter 11 case number 19-30088.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.