Pacific Gas and Electric Co (NYSE:PCG) has reached an $11 billion USD settlement for claims linked to the California wildfires, boosting PCG stock.
The settlement will cover 85% of insurance subrogation claims made by insurance companies relating to payments made to individuals and businesses with coverage for wildfire damages following the 2017 Northern California wildfires and the 2018 Camp Fire. PG&E has been found liable after it was revealed that the company’s equipment started more than one fire a day on average in recent years. PCG stock is currently valued at $11.01, up 9.85%.
“Today’s settlement is another step in doing what’s right for the communities, businesses, and individuals affected by the devastating wildfires,” said Bill Johnson, CEO and President of PG&E Corporation. “As we work to resolve the remaining claims of those who’ve suffered, we are also focused on safely and reliably delivering energy to our customers, improving our systems and infrastructure, and continuing to support California’s clean energy goals.” While PCG stock is recovering today, it is down more than 75% since last November.
This settlement is the second major payout the company has paid as a result of its role in the wildfires. In June, PG&E agreed to pay $1 billion USD to 18 public entities on claims relating to the wildfires in 2015, 2017, and 2018. PCG stock climbed over 20% following that announcement, as the company’s acceptance of liability was well met by the market. A third and final group of wildfire claims against the company is currently pending in both Federal District Court and State Court.
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In January, Pacific Gas and Electric Co announced that it was filing for Chapter 11 bankruptcy due to the financial challenges associated with its role in the wildfires, and subsequently undertook a program of equity financing. Following today’s announcement, PG&E has amended its previously announced equity financing commitment in order to finance the claims but has reaffirmed its total $14 billion USD target for the plan.
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