The electricity provider that caused the California wildfires has reached an $11 billion settlement

AP Photo/Noah Berger

A motorists on Highway 101 watches flames from the Thomas fire leap above the roadway north of Ventura, Calif., on Wednesday, Dec. 6, 2017. As many as five fires have closed highways, schools and museums, shut down production of TV series and cast a hazardous haze over the region. About 200,000 people were under evacuation orders. No deaths and only a few injuries were reported.

• PG&E has reached an agreement to pay $11 billion to settle insurance claims over its role in the California wildfires.
• The utility company's power lines were blamed for wildfires that ravaged Northern California in 2017 and 2018 and resulted in more than 100 deaths.
• Mounting legal claims over the last two years forced PG&E to filed for Chapter 11 bankruptcy in January.
• Shares of PG&E rose as much as 10% on the news.

PG&E has reached another major settlement regarding its role in the deadly California wildfires.

The utility company has agreed to pay $11 billion to settle insurance claims after its power lines were blamed for starting many of the wildfires that ravaged Northern California in 2017 and 2018. Shares of PG&E rose as much as 10% on the news.

"Today's settlement is another step in doing what's right for the communities, businesses, and individuals affected by the devastating wildfires," Bill Johnson, PG&E's chief executive officer, said in a statement on Friday.

Earlier this week the company released a major reorganization plan that allocated $17.9 billion to settle wildfire-related claims. The plan included $8.4 billion for wildfire victims, $8.5 billion to reimburse insurers, and $1 billion for local governments.

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The settlement announced on Thursday is with about 85% of the insurance companies seeking payouts from PG&E, and the $11 billion total exceeds the $8.4 billion cap the company proposed in its restructuring plan.

The announcement represents a critical milestone for PG&E as mounting legal claims stemming from the wildfires forced the company to file Chapter 11 bankruptcy earlier this year. The new settlement still has to be approved by the bankruptcy court.

PG&E also paid out a $1 billion settlement in June with 18 towns and local governments regarding fires in 2015, 2017, and 2018.

PG&E's stock price has fallen more than 54% year-to-date.

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