Source: Green Technology
Pacific Gas & Electric announced an accord with a key group of Wall Street bondholders this week, bringing it one step closer to its goal of emerging from bankruptcy by mid-year. But the California utility still lacks one key partner — Gov. Gavin Newsom, who has already rejected PG&E’s plan as insufficient to meet the state’s needs for a safer and more sustainable utility. And while Newsom can’t directly block the plan from being approved in bankruptcy court, the state does have some bargaining chips, including withholding regulator approval for access to its $21 billion wildfire insurance fund, or even the threat of a state takeover. This week’s deal between hedge funds backing PG&E’s plan and the rival bondholder group , which includes Elliott Management Corp. and Pacific Investment Management Co., is an important step for the utility to maintain some shareholder value post-bankruptcy. The bondholder group’s rival plan, initially supported by fire victims’ groups, would have wiped out current shareholders to support higher payments to creditors and a bolstered future financial position.