(KRON) — Governor Gavin Newsom has rejected PG&E’s reorganization plan, saying it doesn’t comply with the terms of a recently passed wildfire liability law.

The governor released a statement Friday evening, responding to the new bankruptcy exit plan.

“I have determined that the Amended Plan and the restructuring transactions contemplated therein do not comply with AB 1054,” Newsom wrote. “In my judgment, the Amended Plan and the restructuring transactions do not result in a reorganized company positioned to provide safe, reliable, and affordable service to its customers, as required by AB 1054.”

Newsom says the new plan isn’t feasible without access to the wildfire fund established under AB 1054. He said the utility’s board of directors and management have a responsibility to develop a feasible plan, and that anything else is “irresponsible” and a clear violation of the public trust.

PG&E released a statement following the governor’s rejection.

They said their plan meets the requirements of AB 1054 and is the best course forward for all stakeholders, despite what Newsom said.

“Looking ahead, we are committed to getting victims paid, continuing to implement changes across our business to improve our operations for the long term and emerging from Chapter 11 as a financially sound utility,” the statement read.

“In the meantime, we remain focused on delivering safe electric and gas to service 16 million people in Northern and Central California,” the statement continued. “And working hard every day to reduce the ever-growing threat of catastrophic wildfires.”

Senator Bill Dodd released the following statement Friday evening following Gov. Newsom’s rejection of the plan:

“We all know that we can’t trust PG&E to do the right thing or even follow the law. Governor Newsom has been standing up for the interests of ratepayers, victims and communities from day one, so his continued support is no surprise. We need to achieve systemic change in the structure and governance of PG&E to ensure safe, reliable power. The stakes for California are too high to leave it to PG&E executives and their narrow self interests.”

On the other side of things, the woman made famous for building a case against PG&E nearly 30 years ago said she’s pleased with the company’s reorganization plan.

“We can’t just say we’re going to throw up our hands and PG&E is going to burn us all down,” Erin Brockovich said. “There has to be exactly this plan that’s in front of us, now let’s implement it.”

As the company aims to exit bankruptcy as soon as possible, Brockovich likes PG&E’s proposal that satisfies the state legislature’s demands to ensure victims are fairly compensated and a $40 billion commitment over the next four years to make its equipment safer. 

By fulfilling the state’s demands, PG&E will have access to a multi-billion dollar wildfire fund for future fires its equipment causes. The fund is made up of money from the state’s investor owned utilities and a tax California already collects. 

“In this current situation, with this reorganization and this judge that I think is clearly going to move it along, the governor has to hold his ground here.” 

PG&E is confident its plan is the best for constituents and puts them on track ahead of their deadline to be out of bankruptcy by June 30.