California regulator proposes record $2.14 billion fine on PG&E over wildfires

(Reuters) – California’s utilities regulator has proposed an increased $2.14 billion fine on PG&E Corp for its role in causing the devastating 2017 and 2018 wildfires in Northern California.

The decision raises the penalty by $462 million and would be the largest ever imposed, the California Public Utilities Commission (CPUC) said.

It would become final if PG&E agrees within 20 days, and will modify a multi-party settlement reached by the company with the CPUC and union representatives in December.

The new settlement also requires that potential tax savings in excess of $500 million be applied to the benefit of PG&E’s customers, CPUC said.

PG&E did not respond to Reuters’ requests for comment but told local outlet San Francisco Chronicle that it was “disappointed” by the decision.

The San-Francisco based utility filed for Chapter 11 bankruptcy protection in January last year, citing potential liabilities in excess of $30 billion from major wildfires sparked by its equipment in 2017 and 2018.

State fire investigators in May determined that PG&E transmission lines caused the deadliest and most destructive wildfire on record in California, the wind-driven Camp Fire that killed 85 people in and around the town of Paradise in 2018.

Earlier this month, the company proposed an updated reorganization plan, aimed at addressing concerns raised by California Governor Gavin Newsom, who criticized its previous plan for lacking major changes to governance and tougher safety enforcement mechanisms mandated under a recent state wildfire statute.

A U.S. bankruptcy judge in December approved PG&E’s $13.5 billion settlement with victims of Californian wildfires.

The company needs to exit bankruptcy by June 30 to participate in a state-backed wildfire fund that would help reduce the threat to utilities from wildfires.