PG&E's Plan Is Confirmable, Fully Funded, and Treats All Stakeholders Fairly
SAN FRANCISCO, Calif. — PG&E Corporation and Pacific Gas and Electric Company (together, "PG&E") today reiterated the key features of PG&E's fully funded Plan of Reorganization. The Plan, which is the product of extensive negotiations, treats all stakeholders fairly, protects customers, will satisfy all wildfire claims in full, and presents a viable path for PG&E to achieve regulatory approval and confirmation of its Plan in advance of the June 30, 2020 statutory deadline. By resolving the Chapter 11 prior to the end of June 2020, PG&E will be able to participate in the state's new go-forward wildfire fund established under Assembly Bill 1054.
PG&E is confident that its Plan charts the best course for its emergence as a financially sound utility positioned to serve its customers and contribute to California's clean energy future.
Crucially, PG&E's Plan complies with all requirements of the Bankruptcy Code and does not result in a change of control that would impose regulatory hurdles to plan confirmation. In addition, PG&E's Plan treats all constituencies fairly, minimizing the likelihood of protracted litigation that would further delay payments to wildfire victims and jeopardize the customer and public benefits that result from the company's participation in the go-forward wildfire fund.
PG&E has announced settlements with two of three major groups of wildfire claims holders in its Chapter 11—namely cities and counties, and insurance companies and other entities which have already paid wildfire claims for the 2017 and 2018 wildfires—and remains committed to working with the individual claimants to fairly and equitably resolve their claims. PG&E's Plan proposes a framework that protects customers while allowing PG&E to meet its legal obligations.
Debt Financing Commitments Finalized
This week, PG&E confirmed that it has finalized commitments from several leading financial institutions totaling $34.5 billion to provide debt financing in support of its Plan. PG&E has also received aggregate equity commitments in excess of its $14 billion target from a broad array of investors, including current shareholders, bondholders, and parties not currently invested in PG&E's equity or debt securities. All proceeds of the equity commitments would be used to pay wildfire victims and help fund PG&E's contributions to the state wildfire fund.
Objectives of PG&E's Plan
PG&E's Plan would accomplish the following:
- Compensate wildfire victims and certain limited public entities from a trust funded for their benefit in an amount to be determined in an estimation proceeding not to exceed $8.4 billion;
- Compensate insurance subrogation claimants from a trust funded for their benefit in the amount of $11 billion in accordance with the terms of the Subrogation Claims Settlement and Restructuring Support Agreement, to be approved by the Bankruptcy Court;
- Pay $1 billion in full settlement of the claims of certain public entities like cities and counties relating to the wildfires, as previously announced;
- Pay in full, with interest at the legally allowable rate, all prepetition funded debt obligations, all prepetition trade claims and all employee-related claims;
- Assume all power purchase agreements and community choice aggregation servicing agreements;
- Assume all pension obligations, other employee obligations, and collective bargaining agreements with labor;
- Provide for PG&E's future participation in the state wildfire fund established by Assembly Bill 1054; and
- Satisfy the requirements of Assembly Bill 1054.
PG&E's Plan will be updated as developments require, including to reflect any additional settlements or the outcome of the ongoing wildfire claims estimation proceedings. View PG&E's Plan.
Public Dissemination of Certain Information
PG&E Corporation and Pacific Gas and Electric Company (the "Utility") routinely provide links to the Utility's principal regulatory proceedings with the California Public Utilities Commission and the Federal Energy Regulatory Commission at http://investor.pgecorp.com, under the "Regulatory Filings" tab, so that such filings are available to investors upon filing with the relevant agency. PG&E Corporation and the Utility also routinely post, or provide direct links to, presentations, documents, and other information that may be of interest to investors at http://investor.pgecorp.com, under the "Chapter 11," "Wildfire Updates" and "News & Events: Events & Presentations" tabs, respectively, in order to publicly disseminate such information. It is possible that any of these filings or information included therein could be deemed to be material information.
About PG&E Corporation
PG&E Corporation (NYSE: PCG) is a holding company headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, an energy company that serves 16 million Californians across a 70,000-square-mile service area in Northern and Central California. Each of PG&E Corporation and the Utility is a separate entity, with distinct creditors and claimants, and is subject to separate laws, rules and regulations. For more information, visit pgecorp.com.
This press release contains forward-looking statements that are not historical facts, including statements about the beliefs, expectations, estimates, future plans and strategies of the Corporation and the Utility, including but not limited to their bankruptcy emergence plan and related financings. 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 emergence in the Plan or to funding under equity financing and debt financing commitments 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 the Corporation's and the Utility's Annual Report on Form 10-K for the year ended December 31, 2018, their Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019 and June 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 the Corporation and the Utility that commenced on January 29, 2019. The 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.
No Securities Offering
This is not an offering of securities and securities may not be offered or sold absent registration or an applicable exemption from the registration requirements.