Why is FEMA requesting reimbursement for disaster assistance from PG&E? On October 17, FEMA filed claims in the Pacific Gas and Electric (PG&E) chapter 11 bankruptcy case pending in the U.S. Bankruptcy Court for the Northern District of California to pursue reimbursement of $3.9 billion in disaster assistance provided following California wildfires in 2015, 2017 and 2018 that resulted in three major disaster declarations. Since these major disaster declarations, the California Department of Forestry and Fire Protection (CalFire) determined that PG&E equipment was responsible for starting nearly all these fires. FEMA is requesting PG&E reimburse the federal share of the following disaster expenses:
- Public Assistance (financial and direct assistance to state, local governments, and private non-profit entities for debris removal, emergency response costs, and permanent repair/replacement of infrastructure)
- Individual Assistance (financial and direct assistance to individuals and households with disaster caused losses), and
- FEMA’s administrative costs for managing these declarations.
What is FEMA’s position regarding the PG&E bankruptcy settlement? The Robert T. Stafford Disaster Relief, Emergency Assistance Act, and FEMA’s duty to be a good fiscal steward require FEMA to pursue claims against responsible third parties who cause a condition creating the need for disaster assistance. Responsible third parties should not be unjustly enriched at the taxpayer’s expense. The reimbursement claims against PG&E include expenditures for FEMA’s Individual Assistance and Public Assistance programs and the agency’s disaster administrative costs for the three major disaster declarations associated with the wildfires.
FEMA must also follow the law to ensure that disaster assistance provided in these disasters – that resulted from fires PG&E equipment caused – is not duplicated by other sources, and we strive to implement our legal responsibilities in ways that are least disruptive to survivors.
Lawyers for the individual tort claimants agreed to a settlement with PG&E without including the federal and state governments in settlement discussions. The Department of Justice made repeated attempts to engage with the major parties in the bankruptcy but has been excluded from negotiations.
FEMA remains willing to participate fully in negotiations so that all parties, including government agencies, can work to settle well-documented claims. We have no interest in reducing the funds PG&E owes to survivors. Instead, we are interested in ensuring taxpayers do not bear the burden of PG&E’s responsibility for the billions of dollars FEMA provided to assist individuals and communities impacted by wildfires.
Which California wildfire survivors are impacted by the PG&E settlement? FEMA has filed three claims with the bankruptcy court – one for each of the three major disaster declarations that included wildfires caused by PG&E equipment.
- The 2015 Butte Fire in Calaveras County (DR-4240).
- The 2017 Northern California Wildfires in Butte, Lake, Mendocino, Napa, Nevada, Solano, Sonoma, and Yuba Counties (DR-4344).
- The 2018 Camp Fire in Butte County (DR-4407).
How does the PG&E settlement impact the FEMA assistance I received from these fires? At this time, there is no impact to the FEMA assistance you received as a result of the California wildfires listed above.
If you receive compensation twice for the same disaster expense, we call that a duplication of benefits.
Duplication of benefits applies in the following circumstances:
- When assistance for the same purpose has been received;
- When assistance for the same purpose will be received; or
- When assistance for the same purpose is reasonably available from another source such as insurance or legal settlements due to the property owner.
If there is a duplication of the assistance you received from FEMA with the assistance you received from PG&E, FEMA is mandated by law to recover those benefits. Until the bankruptcy court decides the case, we will not know if you have a duplication of benefits.
Will survivors have to give money back to FEMA if the agency does not acquire funds from the lawsuit? FEMA only requests the return of disaster assistance from survivors if there is a duplication of benefits, meaning a person receives financial assistance for the same expense twice.
Do survivors always have to pay back the money they receive from FEMA’s disaster assistance? No. FEMA requests the return of disaster assistance only when a person is found ineligible or if they later receive assistance for the same disaster expenses from insurance or another source.
Does that mean FEMA will expect me to pay back the cost associated with debris removal in my community? No. The cost of debris removal is part of FEMA’s claim against PG&E.
Is FEMA billing survivors of the Camp Fire for the “services” it provided to their community? No. FEMA is not billing Camp Fire survivors for services or assistance they received.
Could PG&E and lawyers for wildfire survivors revise the $13.5 billion settlement so that survivors do not receive a lesser amount? Yes. The TORT Claimants Committee (lawyers for wildfire survivors) and PG&E came to the settlement agreement without the consultation or consideration of additional, rightful claims.
The U.S. Department of Justice made clear in court filings, since at least August 2019, that FEMA would have claims in bankruptcy proceedings, long before the proposed settlement with survivors’ lawyers was reached.
We remain willing to participate fully in negotiations so that all parties, including government agencies, can work to settle well-documented claims, not reduce the amount of money that goes to survivors.
If FEMA must collect duplication of benefits from wildfire survivors, how would it? We will not know the outcome of the case until the bankruptcy court reaches a final verdict. Yet, direct reimbursement for federal disaster assistance from PG&E would be least impactful to wildfire survivors.