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Victims of the Camp Fire could in theory use PG&E’s guilty plea to bolster their claims against the company.The Associated Press

Pacific Gas & Electric, California’s largest utility, said Monday that it had agreed to plead guilty to involuntary manslaughter in connection with the Camp Fire, the state’s deadliest wildfire.

California regulators determined last year that PG&E’s equipment caused the fire, which in 2018 engulfed the town of Paradise and led to the deaths of 85 people.

Facing tens of billions of dollars in wildfire claims, PG&E has been in bankruptcy reorganization since early last year. The company is racing to emerge from bankruptcy by June so it can qualify for inclusion in a new state wildfire fund that could cover the costs of future fires.

The plea agreement, struck with the district attorney in the county where the Camp Fire occurred, followed the announcement Friday that Gov. Gavin Newsom was willing to approve PG&E’s plan to emerge from bankruptcy. Under the plan, victims of the wildfires have agreed to a payment of $13.5-billion.

“Today’s charges underscore the reality of all that was lost,” Bill Johnson, PG&E’s chief executive, said, “and we hope that accepting those charges helps bring more certainty to the path forward so we can get victims paid fairly and quickly.”

The plea agreement, announced in a securities filing, said PG&E had accepted a maximum penalty of $3.5 million and “no other or additional sentence will be imposed on the utility in the criminal action in connection with the 2018 Camp Fire.” The agreement must be approved by a state court and the bankruptcy court.

The Camp Fire started after a hook holding a PG&E transmission line broke from a nearly 100-year-old tower near Paradise. The company repeatedly failed to maintain that line even though it cut through a forested and mountainous area known to experience strong winds, the California Public Utilities Commission concluded in a report last year.

The company’s stock was up about 8 per cent, to $7.84, on Monday afternoon but still far from the nearly $18 it hit a month ago.