OAKLAND, Calif. (AP) — Former Pacific Gas & Electric executives and directors have agreed to pay $117 million to settle a lawsuit related to the devastating 2017 and 2018 California wildfires caused by the company’s equipment, it was announced Thursday.
Settlement bldg announced PG&E Fire Victim Trust, which was created to handle claims filed by more than 80,000 victims of deadly wildfires caused by PG&E’s shaky electrical grid. The trust’s lawsuit, filed last year, alleged that former officers and board members neglected their duty to ensure that the utility’s equipment did not kill people.
The complaint was an outgrowth of a $13.5 billion settlement PG&E reached with wildfire victims while the utility was in bankruptcy from January 2019 to June 2020.
As part of the deal, PG&E gave victims the right to sue the utility’s hierarchy leading up to and during a series of wind-driven wildfires that killed more than 100 people and destroyed more than 25,000 homes and businesses, including the 2018 Camp Fire , which killed 85 people and destroyed most of the town of Paradise in Bath County.
PG&E prayed guilty of 84 counts of involuntary manslaughter for causing the fire and fined $4 million, the maximum penalty allowed.
In all, since 2017, PG&E has been blamed for more than 30 wildfires that have destroyed more than 23,000 homes and businesses and killed more than 100 people.
Among those suing the fire trust were two former PG&E executives, Anthony Early and Geisha Williams, who were paid millions of dollars during their tenures, as well as former board members. They were covered by liability insurance provided by the utility, the trust said.
PG&E is the nation’s largest utility company with approximately 16 million customers in central and northern California.
PG&E said in a statement that the settlement is “another step forward in PG&E’s ongoing efforts to resolve the issues remaining before the bankruptcy and to move forward with our commitment to providing safe, clean and reliable energy to our customers, and to continue the important work to reduce risk in our energy system.”
Estimated money will not go to the poor. Instead, according to the bankruptcy court’s order, the money will be used to satisfy the “vast majority” of claims by federal agencies, such as the U.S. Forest Service, that helped fight the fires and provide relief to victims, Frank M. Pitre, the trust’s general counsel, said in a statement.
That means the money must not come from funds earmarked for the trust, which has paid out $4.9 billion to victims.
The trust said it faces a huge shortfall because half of the promised settlement consisted of PG&E stock, which has consistently traded at a lower price than expected when the deal was struck in late 2019.
Shares on the New York Stock Exchange closed Thursday at $12.38 a share, down more than 30 cents.
Potential investors may be spooked by PG&E’s ongoing wildfire problems. In June, the company pleaded not guilty to manslaughter and other charges brought against it after its equipment started the Zogg fire, which killed four people and destroyed hundreds of homes in Northern California two years ago.
Also earlier this year, PG&E agreed to pay more than $55 million to avoid prosecution for two other large wildfires sparked by aging power lines in Northern California. But the company did not admit wrongdoing in these cases.
And last week, federal investigators seized a power pole and attached equipment as part of a criminal investigation into what sparked the Mosquito Fire in the Sierra Nevada foothills.
The fire that broke out on September 6 destroyed almost 80 houses and other buildings. The fire, which has spread to nearly 120 square miles (311 square kilometers), was 85% contained on Thursday.
Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, copied or distributed without permission.