By Hudson Sangree

PG&E Corp. named a new utility chief Tuesday, submitted a broad outline of a bankruptcy reorganization plan and tried to fend off competing proposals during a federal court hearing in San Francisco.

The behemoth bankruptcy of California’s largest utility lumbered forward in the U.S. Bankruptcy Court for the Northern District of California, as pressure mounted to speed up the court proceedings, and stakeholders fought over control of the company and the billions of dollars they hope to win.

Judge Dennis Montali opened Tuesday’s hearing, one of the most significant in the case so far, with a reminder of the thousands of victims of fires sparked by PG&E equipment in the past four years. The company filed for bankruptcy protection in January, after November’s Camp Fire killed 85 people and destroyed most of the town of Paradise, Calif.

San Francisco Bay Area residents remember the smoke that filled the air last fall and the television images of the devastation in Paradise, but “that’s really not much,” Montali said.

“It’s nothing like the nightmares and the horrors that were experienced by all of the victims and their families and their loved ones, and that they are no doubt reliving endlessly,” he said. “And that’s why we’re here. That’s why we’re working in this community, in the bankruptcy world, to deal with one aspect of that tragedy.”

Next, Montali heard lengthy arguments from bondholders and insurance companies over why he should end PG&E’s exclusivity period — the time it has to file its own reorganization plan without the judge considering competing proposals.

Both groups want to make sure they get paid, and perhaps even profit from the process.

Efforts by the California Public Utilities Commission to broker talks among the competing parties broke down, a CPUC lawyer told Montali on Friday. (See Bankruptcy Judge Questions PG&E Exec Compensation.)

A proposal by company bondholders would inject more than $30 billion into PG&E, including about $18.4 billion for fire victims, lawyer Michael Stamer told the judge. Stamer represents an ad hoc committee of senior unsecured noteholders, including banks and mutual funds that collectively hold more than $10 billion in PG&E bonds.

Stamer and others argued for expediency because of recent legislative action. Under Assembly Bill 1054, passed last month, the PUC must approve a bankruptcy plan by June 30, 2020, for PG&E to be able to access a $21 billion fund to pay wildfire claims. (See California PUC Jumps into PG&E Bankruptcy Fray.)

PG&E attorney Stephen Karotkin argued the plan was a way for bondholders to seize control of the company for pennies on the dollar. He urged the judge to give PG&E until Sept. 9 to file its own reorganization plan with the court.

Court papers filed by PG&E on Monday gave a clearer idea of what that plan might entail. It would raise billions of dollars in equity capital to settle wildfire claims and would honor all pre-bankruptcy debts and power purchase agreements.

PG&E’s bankruptcy raised concerns that it would try to reject many of its 387 PPAs worth about $42 billion, especially contracts for solar and wind power. That led to a dispute with FERC about who had authority over the agreements. (See Judge Sides with PG&E over FERC in PPA Dispute.)

Montali took the motions to end exclusivity under submission. He could rule on them as early as Wednesday, when he’s also scheduled to hear arguments over estimates of wildfire damages.

New CEO

Also on Tuesday, PG&E announced its board of directors had appointed Andrew Vesey as president and CEO of its primary subsidiary, utility Pacific Gas and Electric.

Vesey was employed as CEO of AGL Energy, a company based in Sydney, Australia, from 2015 to 2018. AGL has about 3.7 million gas and electric customers and controls around 20% of Australia’s generating capacity, PG&E said in a news release.

Before AGL, Vesey was a longtime executive, including serving as COO for AES.

Vesey starts Aug. 19, according to PG&E. His compensation includes a $1 million annual salary and a $1 million “transition payment,” according to a Securities and Exchange Commission filing. He may also be eligible for roughly $2 million a year in incentive bonuses if Montali approves PG&E’s Key Employee Incentive Plan.

“Andy is a focused and talented leader with the demonstrated experience to help PG&E improve our safety and operational performance, while also being a strong advocate for clean energy solutions,” PG&E Corp. CEO Bill Johnson said in a statement. “We have full confidence in Andy to lead change and deliver results across our safety and operational areas, including electric, gas, generation and customer teams.”