Judge Allows San Francisco to Continue Legal Battle With PG&E

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Pacific Gas and Electric trucks sit parked on a street on June 18, 2018, in San Francisco. (Credit: Justin Sullivan/Getty Images)

Pacific Gas and Electric trucks sit parked on a street on June 18, 2018, in San Francisco. (Justin Sullivan/Getty Images)

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A judge on Thursday allowed San Francisco to renew its stalled legal fight with Pacific Gas & Electric Corp. over power delivery costs.

The city has been fighting with PG&E for years, arguing the utility requires it to install unnecessary and costly equipment in large projects like affordable housing development and public safety buildings.

When PG&E filed for bankruptcy in January all legal actions were stopped, a routine procedure with all bankruptcy filings.

On Thursday, U.S. Bankruptcy Judge Dennis Montali granted the city’s request for an exemption to the litigation hold. The city argued that public safety consideration trumps the bankruptcy rules and the judge agreed. But the judge said San Francisco would have to wait with other creditors for PG&E to emerge from bankruptcy to collect any possible monetary damages.

San Francisco generates its own electricity from a city-owned dam and reservoir near Yosemite National Park about 180 miles (290 kilometers) east of the city. The city pays PG&E to deliver the electricity. San Francisco is asking the Federal Energy Regulatory Commission to force PG&E to lower its fees.

San Francisco is the only municipality to ask the judge for a litigation exemption but a few similar requests have been made from private parties. On Thursday, the judge appeared to be in favor of permitting Northern California gasoline producer Valero to pursue its $75 million lawsuit against PG&E.

Valero sued PG&E in 2017, blaming the utility for a lengthy power outage at the company’s Northern California refinery. Valero alleges that the day-long outage damaged the refinery’s equipment and led to the release of 74,000 pounds (33,566 kilograms) of pollution, prompting regulatory investigations.

Valero’s attorneys said PG&E’s insurance carriers could pay for any damages won in court and that type of resolution would be more efficient than waiting for PG&E to emerge from bankruptcy.

State fire officials blame PG&E’s equipment for starting more than a dozen California wildfires over the last two years. PG&E filed for bankruptcy in January, saying it faced at least $13 billion in legal claims from wildfire victims.

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