July 25, 2019 / 1:08 PM / 5 months ago

PG&E expects $4.8 billion of initial contribution to California wildfire fund

FILE PHOTO - A PG&E truck carrying an American Flag drives past PG&E repair trucks in Paradise, California, U.S. November 21, 2018. REUTERS/Elijah Nouvelage

(Reuters) - Power producer PG&E Corp said on Thursday its initial contribution to California’s wildfire fund would be about $4.8 billion, and annual contribution about $193 million.

The company said participation in the fund would impact its financial results.

Earlier this month, California Governor Gavin Newsom signed a bill to create a $21 billion fund to help bankrupt PG&E and other investor-owned power companies in the state to cover liabilities from future wildfires caused by their equipment.

San Francisco-based PG&E will be the largest contributor among power companies to support the fund. Under the legislation, California’s investor-owned utilities are required to agree to put a combined $5 billion for improving their electrical grids to access the fund.

The initial contribution would be payable after PG&E emerges from Chapter 11 reorganization, the company said.

The troubled company sought Chapter 11 bankruptcy protection in January after severe wildfires in 2017 and 2018 resulted in more than $30 billion in liabilities.

PG&E has been blamed for many of the blazes, including the Camp Fire that killed more than 80 people last November.

Shares of the company were up 2.1% at $19.29 in premarket trading.

Reporting by Arundhati Sarkar in Bengaluru; Editing by Shinjini Ganguli and James Emmanuel

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