PG&E Corp.’s US$1.68 billion settlement agreement with California over wildfires sparked by its power lines could save the bankrupt utility about US$470 in million in taxes.

Nearly all the wildfire recovery and prevention work included in the agreement should be deductible from both its state and federal taxes, PG&E said in a regulatory filing late Friday.

The agreement reached with state regulators in December covers Northern California blazes in 2017 and the 2018 Camp Fire, the deadliest in state history. As part of the deal, PG&E agreed not to saddle customers with US$1.63 billion in costs it will incur preventing and responding to fires.

The settlement also directs PG&E to spend an additional US$50 million on system enhancements and community outreach. It’s unclear whether federal officials will allow the company to deduct that expense from its taxes, PG&E said.

The filing also details how much responding to those wildfires has cost San Francisco-based PG&E, which filed for Chapter 11 in January 2019 facing an estimated US$30 billion in liabilities. The company, for example, lists US$719.4 million in expenses related to the November 2018 Camp Fire, which killed 85 people and leveled the town of Paradise.