Whether those people rebuild in Paradise, CA or move somewhere else with the money they received from the settlement is an entirely different proposition. This is not "subsidizing people in the country side". PG&E fucked up and now they have to pay. PG&E is choosing to pass the cost to its customers rather than eating into its profits, which is a decision that California allowed them to make.
EDIT: You and the GP I originally replied to seem to be making the argument that after PG&E burned all these people's homes down they should have been allowed to just tell them to get bent so your utility bill wouldn't go up in the city? What happens when it's /your/ home that gets burnt down? "Sorry bucko, but your house is worth $0 as it's just now a smoldering ruin. No soup for you. - Thanks PG&E"