California utility company pays $1bn for deadly wildfire damages

'There is some relief and hope in knowing that we will have some financial stability,' officials say

A utility company involved in the deadly wildfires that ravaged California last year has agreed to pay $1bn (£793.8bn) to cover damages across 14 local governments.

The settlement is just a fraction of the more than $30bn (£23.8bn) in potential damages Pacific Gas & Electric is facing in lawsuits filed by local governments, insurance companies and private property owners, however.

High winds knocking down some of the company's power lines during hot, dry weather were blamed for starting several of the state’s most destructive wildfires.

More than half of the $1bn in the agreement would go to four local governments impacted by a 2018 fire that killed 85 people and destroyed nearly 14,000 homes in Northern California.

Another $270m (£214.4m) would go towards the town of Paradise, which was mostly destroyed in the blaze.

Paradise had 26,000 residents before the fire and now has less than 3,000 people. It has reportedly lost more than 90 per cent of its tax revenue.

“There is some relief and hope in knowing that we will have some financial stability,” Lauren Gill, the town manager, said in a statement. “We can’t do disaster recovery and rebuild the town if we don’t have people to do it.”

The settlement also covers a 2015 fire in Calaveras County and a series of 2017 fires in wine country.

PG&E filed for bankruptcy earlier this year The agreement would resolve claims from some local governments, but it still must be approved by a bankruptcy court.

That likely won’t happen until lawsuits by insurance companies and private property owners are resolved.

A spokesperson for the utility described the settlement as “an important first step [towards] an orderly, fair and expeditious resolution of wildfire claims.”

Additional reporting by AP