Federal government blasts PG&E's deal with fire victims

SAN FRANCISCO (AP) — Tensions between the U.S. government and Pacific Gas & Electric are boiling over as the two sides battle over whether a taxpayer-funded agency should be allowed to stake a claim on a $13.5 billion settlement covering most of the losses from catastrophic wildfires blamed on the bankrupt utility.

The showdown came into sharper focus Monday when a top official from the Federal Emergency Management Agency blasted the nation's largest utility and fire victims' lawyers for negotiating a deal that could put the government in the untenable position of trying to claw back money it already has paid to people who lost family members and homes in fires ignited by PG&E's transmission lines from 2015 and 2018.

Robert Fenton, a FEMA regional administrator, lashed out during a media conference call held after the San Francisco Chronicle first reported the agency planned to seek repayment of a portion of the $3.9 billion bill that it incurred in the fires from the victims if it can't get the money from PG&E as the utility scrambles to emerge from bankruptcy protection by June 30.

The $13.5 billion settlement requires FEMA and various California agencies to try to cover their wildfire expenses from the same fund set up for individuals and businesses devastated by deadly blazes that destroyed tens of thousands of homes and businesses.

If PG&E doesn't pay, FEMA believes it might have to seek up to $200 million from fire victims who also tap into the $13.5 settlement for some of the same losses that the agency already doled out.

That is a public relations nightmare that FEMA is hoping to avoid by reworking the deal that a federal judge approved last month. Most of the $3.9 billion being sought by FEMA overlaps with the majority of a $3.3 billion claim being made by various California state...