U.S. Markets closed

California utility PG&E to pay $1 billion over wildfires

1 / 3

The town of Paradise was virtually obliterated by Camp Fire in November 2018

The town of Paradise was virtually obliterated by Camp Fire in November 2018 (AFP Photo/Josh Edelson)

San Francisco (AFP) - California utility PG&E has agreed to pay $1 billion to 14 local government bodies for damage from wildfires blamed on the firm's equipment.

The settlement announced Tuesday covers claims stemming from the 2018 Camp Fire in Northern California, which killed 85 people and destroyed some 18,000 buildings, and the earlier 2017 North Bay and 2015 Butte fires.

In May, California's fire protection agency determined that PG&E's electrical power lines sparked Camp Fire, the deadliest in the state's history.

"This money will help local government and taxpayers rebuild their communities after several years of devastating wildfires," said Scott Summy of law firm Baron & Budd which represented the public bodies in the settlement mediation in San Francisco.

"The cities and counties will be in a better position to help their citizens rebuild and move forward," he said in a statement announcing the agreement.

The $1 billion settlement is part of the reorganization plan for PG&E, which filed for bankruptcy protection in January, facing billions of dollars in potential liabilities over its role in the fires.

The town of Paradise, which was virtually obliterated by Camp Fire, will receive $270 million.

"The town of Paradise will rebuild, and this is an important step towards our recovery," mayor Jody Jones in a statement posted on the town's Facebook page.

"On behalf of the town, we hope to receive the money as soon as possible so we can put it towards rebuilding our infrastructure and providing those necessary services for community resiliency."

California Assemblyman James Gallagher welcomed the agreement.

"I am pleased to hear that the utility company has moved quickly to accept responsibility and provide financial compensation to the Town of Paradise," he said on Facebook.

Gallagher added the utility must move swiftly to resolve claims with victims.

"Camp Fire survivors have already been through hell. The utility has an obligation to not prolong their suffering," he said.

As PG&E is under Chapter 11 bankruptcy protection, the settlement is subject to court approval.