A regional director for the Federal Emergency Management Agency on Monday said FEMA is going after California utility giant Pacific Gas & Electric for $3.9 billion owed the government due to wildfires PG&E that was found to have caused in 2015, 2017 and 2018.
FEMA Region 9’s Regional Administrator Bob Fenton said he wants to hold PG&E responsible for the wildfires, but wanted to clarify earlier reports that FEMA is going to go after compensation from individual wildfire survivors who put in a claim as part of a $13.5 billion settlement with PG&E. Attorneys for the victims are battling that claim.
“I want to assure you we have no interest in reducing the funds PG&E owes survivors,” Fenton said during a call with the media on Monday to discuss the government’s case and clarify outstanding questions.
FEMA began discussions last year about $3.9 billion in bankruptcy claims against PG&E because of the 2015 Butte Fire, the 2017 wildfires in Wine Country and the 2018 Camp Fire, all of which were determined by the California Department of Forestry and Fire Protection to have been caused by PG&E or its equipment.
A U.S. bankruptcy judge in early December approved PG&E Corp.’s $13.5 billion settlement with victims of California wildfires.
Now a financial tug-of-war is emerging over that $13.5 billion, as government agencies jockey for more than half the money to cover the costs of their response to the catastrophes.
Under PG&E’s bankruptcy plan, any payment to FEMA would have to come from the $13.5 billion the company intends to reserve to settle claims from fire victims.
Fenton said during the call with media that the Stafford Disaster Relief and Emergency Assistance Act, a federal law designed to bring an orderly means of federal natural disaster assistance for state and local governments, requires FEMA to try and recover expenses for the wildfires being blamed on PG&E as a responsibility to taxpayers.
“Obviously, the taxpayers should not have to pay for a corporation’s wrongdoing,” Fenton said.
FEMA is compelled to seek compensation directly from PG&E and not individuals who have received compensation, otherwise individual victims would be on the hook if they get settlement money that duplicates funds already paid by the federal government, according to him.
“FEMA would prefer to have the duplication of benefit eliminate by collecting directly from PG&E,” he said.
He also said FEMA has been left out of settlement talks between victims and PG&E.
FEMA put in a claim through the PG&E bankruptcy process in October, and then on Dec. 2 the Tort Claimants Committee working on behalf of the wildfire victims filed an objection to that claim.
A hearing on the matter is set for February.
“It really quite frankly boggles my mind why the tort claims lawyers would want to relieve PG&E of its claims responsibility and make California and FEMA the enemy here,” he said.
A PG&E spokesperson provided the following comment in response to what Fenton asserted during his talk with the media on Monday:
“PG&E agrees with the Tort Claimants Committee that FEMA does not have a valid legal claim against the company. The Bankruptcy Court has approved our settlement agreements resolving all major wildfire claims. This brings us one significant step closer to getting victims paid so they can rebuild their lives. As for our overall Plan of Reorganization, we remain engaged in active and constructive dialogue with stakeholders. We are committed to a safe and financially stable PG&E going forward.”
*This story ran previously in our sister publication Insurance Journal.