By Hudson Sangree

The federal judge overseeing PG&E Corp.’s bankruptcy case gave the company four more months to come up with a Chapter 11 reorganization plan at a hearing Wednesday.

Judge Dennis Montali, of the U.S. Bankruptcy Court in San Francisco, extended the 120-day period under which PG&E and its utility subsidiary Pacific Gas and Electric have exclusive rights to file a reorganization plan with the court.

Montali gave the companies through September to come up with a proposal, though he said he could shorten that time if he chose.

The companies filed for bankruptcy Jan. 29, citing at least $30 billion in liabilities for wildfires sparked by transmission and distribution lines. (See PG&E Files for Bankruptcy.) The 120-day exclusivity period was set to run out next week.

Montali’s extension was a compromise. PG&E had asked for six more months in the hopes that California Gov. Gavin Newsom and the State Legislature might offer the state’s investor-owned utilities wildfire liability relief later this year.

Lawyers representing wildfire victims had urged Montali to deny the extension, while creditors had recommended a four-month reprieve. The judge said he was inclined to grant PG&E’s motion, but after hearing from the parties, he decided to accept the recommendation of the creditors’ committee.

“This judge has never been a fan of exclusivity but is a fan of practical consequences,” Montali said. He explained he did not want to deal with competing reorganization plans that might be unworkable.

Montali also approved PG&E’s creation of a $100 million fund to aid wildfire victims who lack housing or have other urgent needs. Many of those displaced by the November 2018 Camp Fire, the deadliest and most destructive in state history, are still living in tents and recreational vehicles in the destroyed town of Paradise.

One victims’ lawyer said the fund was a ploy by PG&E to generate good will with the governor and lawmakers. PG&E and the state’s other two large IOUs — Southern California Edison and San Diego Gas & Electric — want policymakers to lessen their wildfire liability under the state’s strict liability standard, known as inverse condemnation.

PG&E is a “pariah in Sacramento” and needs help winning reforms, the plaintiffs’ lawyer Robert Julian told the judge.

Julian said that in the same courthouse, Judge William Alsup is overseeing PG&E’s criminal probation related to the 2010 San Bruno gas pipeline explosion and has ordered the company’s new leaders to tour the devastation in Paradise. (See PG&E Probed by Plaintiffs’ Lawyers, SEC.)

The California Department of Forestry and Fire Protection recently concluded PG&E’s equipment had started the Camp Fire, which killed at least 85 people and destroyed nearly 19,000 structures. PG&E admitted weeks ago that a tower on its 100-year-old Caribou-Palermo line near Paradise had likely sparked the massive blaze. (See Cal Fire Pins Deadly Camp Fire on PG&E.)

“The only question is whether it’s homicide or manslaughter in the Camp Fire because they knew that tower was going to fail,” Julian said.

Montali said that as a bankruptcy judge, he could only approve or deny PG&E’s request to establish the aid fund, and that he had no cause to deny it.

“You’re saying, ‘You get brownie points with the governor and Judge Alsup,’” Montali told Julian. “I don’t care about that.”