California Gov. Gavin Newsom rejected a $13.5 billion settlement that Pacific Gas & Electric struck last week with thousands of people who lost homes, businesses and family members in a series of devastating fires that drove the nation’s largest utility into bankruptcy.
The decision, announced late Friday in a five-page letter to PG&E CEO William D. Johnson, was a major setback in the utility’s race to meet a June 30 deadline to emerge from bankruptcy protection.
Newsom said the plan “falls woefully short” under state law, because proposed changes to PG&E’s governance and financing were insufficient to “provide safe, reliable, and affordable service to its customers,” the San Francisco Chronicle reported. The decision came a week after PG&E announced it had reached the agreement with victims’ attorneys to settle claims from 2015, 2017 and 2018 fires that were blamed on PG&E’s power lines.
“For too long, PG&E has been mismanaged, failed to make adequate investments in fire safety and fire prevention, and neglected critical infrastructure,” Newsom wrote. “PG&E has simply violated the public trust.”