Shares of power producer PG&E were up 10% Friday after the company said it has reached an $11 billion settlement agreement with entities representing about 85% of insurance subrogation claims relating to 2017 and 2018 wildfires.
The California power provider said these claims were based on payments made by insurance companies to individuals and businesses with insurance coverage for wildfire damages.
In January, PG&E filed for bankruptcy protection and said it faced up to $30 billion in fire liabilities shortly after its power lines sparked what became California’s deadliest wildfire yet last fall. Camp Fire, which burned in Paradise, California last November, killed at least 86 people.
Equipment owned and maintained by the company also started at least 17 of the 21 major wildfires that burned in California in 2017, according to the California Department of Forestry and Fire Protection.
The company expects billions of dollars in losses, primarily from lawsuits filed by fire victims, businesses and insurance companies.
“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.
The $11 billion settlement is the utility’s second major settlement of wildfire claims. PG&E and 18 other entities said they reached agreements to settle claims in the 2015, 2017 and 2018 wildfires for a total of $1 billion.
The company on Monday also unveiled the outlines of a reorganization plan that will pay $17.9 billion for claims stemming from the wildfires. It includes payments capped at $8.4 billion for victims, payments capped at $8.5 billion for reimbursing insurers and a $1 billion settlement with local governments.