California regulators approved a $1.9 billion penalty for PG&E Corp. for its role in sparking some of the worst wildfires in state history.

The penalty is the largest ever assessed by the California Public Utilities Commission, whose investigators determined PG&E failed to properly maintain and operate power lines, resulting in blazes that destroyed thousands of homes and killed more than 100 people in 2017 and 2018. The fires led to an estimated US$30 billion in claims against PG&E, pushing the company into bankruptcy.

PG&E is racing to gain regulatory and bankruptcy court approval of its Chapter 11 plan ahead of a June 30 state deadline so it can participate in a state insurance fund to help cover any future fire liabilities. As part of its reorganization, PG&E has already agreed to pay more than US$25 billion to resolve claims from fire victims, insurers and local government agencies.

In its ruling Thursday, the commission backed off plans for the penalty to include a US$200-million cash fine after PG&E said it could threaten agreements it reached with investors to buy US$9 billion in shares of the reorganized company. The Utility Reform Network, a consumer advocacy group, said the agency was letting PG&E off the hook for suspending the cash fine portion of the penalty.

The commission’s penalty is higher than the US$1.7 billion PG&E agreed to pay last year through a settlement with parties including the commission’s safety division. But it’s lower than the US$2.1 billion recommended by an administrative law judge in February. Under the terms, PG&E shareholders will pay for about US$1.8 billion in fire-related safety work and US$114 million for corrective actions and other measures. PG&E is barred from realizing any tax benefits from operational expenses related to the penalty, the commission said.

In March, PG&E agreed to plead guilty to 84 counts of involuntary manslaughter in connection with the Camp fire, the deadliest wildfire in California history that destroyed the town of Paradise. The utility said it will also pay US$4 million in fines for its role in that blaze.