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PG&E fails to get governor's approval on restructuring proposal
California Gov. Gavin Newsom (D) rejected Pacific Gas and Electric's (PG&E) proposed restructuring plan as it seeks to navigate a historic bankruptcy.
Newsom wrote in a letter to PG&E Chief Executive Officer Bill Johnson that the utility behemoth's restructuring plan fell "woefully short" of California's requirements. He said that any reorganization of the company would need a better financing plan, a completely new board and the option for Sacramento to take the reins should it fail safety metrics.
"The resolution of this bankruptcy must yield a radically restructured and transformed utility that is responsible and accountable," he wrote, adding that the proposal does not position the company to "provide safe, reliable and affordable service."
Newsom's support is vital to PG&E's future - earlier this year the firm declared bankruptcy after being saddled with tens of millions of dollars in liabilities after settling claims for its role in starting several deadly wildfires. PG&E hammered out a restructuring plan, but still needs Newsom to approve it.
The governor wrote that PG&E's bankruptcy marks "more than two decades of mismanagement, misconduct, and failed efforts to improve its safety culture."
"It is against this backdrop that compliance with" state law must be measured, he added.
According to a state law that created a $21 billion insurance pool to help firms deal with liabilities from future wildfires, PG&E needs to exit Chapter 11 by June 30 to access any of the funds.
PG&E maintained to The San Francisco Chronicle that its plan "is the best course forward for all stakeholders. We've welcomed feedback from all stakeholders ... and will continue to work diligently in the coming days to resolve any issues that may arise."
Newsom previously warned the company that the state of California could take it over if it does not pull itself out of bankruptcy by mid-2020.