“California’s largest power company faces an existential crisis as it confronts the looming possibility of billions of dollars in wildfire liability.Shares of PG&E Corp. — which owns Pacific Gas & Electric Co. — sank 22.3 percent to $18.95 on Monday after reports the utility could face at least $30 billion in liability related to fires and has considered filing for bankruptcy protection or unloading its natural gas operations. The consequences of bankruptcy or an asset sale could ripple far beyond the utility’s shareholders, some experts say, affecting 16 million Californians who depend on PG&E for energy and potentially threatening the state’s ability to meet its climate-change goals.The utility has faced tremendous scrutiny over the last decade, starting with a 2010 gas explosion that killed eight people in San Bruno and continuing with among the deadliest and most destructive fires in state history, some of which may have been sparked by PG&E’s infrastructure.The California Public Utilities Commission is considering breaking up the company as part of an investigation into PG&E’s safety culture.”
“The Public Utilities Commission is eager to avoid a Bankruptcy Court proceeding, in which a federal judge would control the company’s fate and the interests of creditors would be placed above those of ratepayers.Commission President Michael Picker has said California won’t let PG&E go bankrupt. He compared the process of reforming the troubled company to “repairing a jetliner while it’s in flight.”A bankruptcy could lead to higher rates for PG&E customers.The company filed for bankruptcy once before, in the midst of the early-2000s energy crisis that stemmed from a failed deregulation scheme and led to rolling power outages in much of the state.The crisis made California a riskier place to invest, which led to higher borrowing costs for PG&E and the state’s second-largest investor-owned utility, Southern California Edison.Those costs were passed on to utility customers in the form of higher rates, said Michael Colvin, a former top official at the Public Utilities Commission.“It probably took 5 to 10 years for California to shake that risk premium that happened after the energy crisis,” said Colvin, who now works as a senior manager for the Environmental Defense Fund, a nonprofit advocacy group.Renewable energy developers are worried a bankruptcy filing would make it more difficult for California to meet its environmental goals.California law requires the state to get 60 percent of its electricity from climate-friendly sources by 2030 and 100 percent by 2045. Developers say meeting those targets depends on financially viable utility companies that can buy electricity from solar and wind farms or from other clean energy facilities. Those long-term utility contracts allow developers to secure financing to get their projects built.‘We have tens of billions of dollars worth of contracts with PG&E to meet the state’s climate change goals and its renewable energy goals. A bankruptcy would be very disruptive,’ said Jan Smutny-Jones, chief executive of the Independent Energy Producers Assn., a trade group that represents renewable energy and natural gas developers.Mark Toney, executive director of the Utility Reform Network, a ratepayer watchdog group, has a different worry.He’s afraid PG&E might play up the risk of bankruptcy as a scare tactic, to persuade state lawmakers to shield the company’s shareholders from potential liability from Northern California’s 2017 Tubbs Fire, which killed 22 people, and the 2018 Camp Fire, which killed 86 people.He pointed to the Legislature’s approval last year of Senate Bill 901, which allows PG&E and other investor-owned utilities to charge ratepayers for some of the costs they may incur from 2017’s deadly fires.‘PG&E threatened bankruptcy last year and got their bailout. And they are threatening bankruptcy again and are asking for another bailout. That’s not sustainable,’ Toney said.”
In a nutshell, Pacific Gas & Electric is in dire straits. They face a possible billion dollar liability for the fires of late, and could be forced to pay that, dissolve entirely, or sell. There’s a whole host of potential outcomes, with none being particularly attractive or beneficial to a large number of Californians.
We’re not sure where they go from here, but what we do know is that a brighter horizon lays ahead for those who own their power through solar. One of our personal favorite aspects of being in the solar industry, apart from our positive environmental impact, is ridding consumer’s dependance on traditional utilities. That peace of mind and the day one cost savings makes our job of getting the word out every day a breeze and an absolute joy.