If only they’d spent more money on keeping their infrastructure maintained instead of chasing green dreams.
From Zero Hedge late yesterday:
Confirming earlier reports that distressed California utility PG&E had rejected a proposal by some of the world’s most prominent investors that would keep it out of bankruptcy, moments ago Bloomberg reported that the board of the embattled utility which is facing $30 billion in wildfire liabilities, voted late Monday to file for bankruptcy protection as soon as midnight.
In pursuing a Chapter 11 bankruptcy filing, PG&E is declining a proposal by an investing group led by Paul Singer’s Elliott Management that would’ve been backed by $4 billion in bonds and given the company enough cash to stay avoid bankruptcy while working through its liabilities. A second group of investors including Ken Griffin’s Citadel and Leon Black’s Apollo who had pitched a rival plan, were also rebuffed.
By rejecting the last minute rescue bids, PG&E – which was rated investment grade as recently as a few weeks ago by both S&P and Moody’s- is set to file one of the biggest U.S. utility bankruptcies of all time, with over $30 billion in debt about to be in default. The company which serves 16 million customers, said a Chapter 11 filing is the only way it can handle the crippling costs of 2017 and 2018 wildfires that its equipment has been blamed for igniting. Since November, when California was hit by the deadliest fire in its history, the company has seen its shares plunge by 75 percent and its credit rating cut to junk.
By going from investment grade to bankruptcy within one year, PG&E will be what BofA recently dubbed not a “fallen angel” but a “failing angel”, representing a singular event: when it files for bankruptcy some time in the next 12 hours, PG&E will become the third largest IG default since 1999, behind Lehman and Worldcom, with $17.5bn of index eligible debt.
Full story here
In another story, we have this:
PG&E files for bankruptcy as possible rate spike looms
PG&E is also answering to federal judge William Alsup, who is overseeing its probation following the 2010 San Bruno pipeline explosion. Earlier this month, Alsup asked the utility to invest in electrical infrastructure renovations costing up to $150 billion to “reduce to zero the number of wildfires caused by PG&E in the 2019 wildfire season,” according to the San Francisco Chronicle.
PG&E said it’s possible that paying $150 billion could result in “an estimated one-year increase of more than five times current rates.”
Questions still remain regarding what the bankruptcy could mean for rising energy rates, California’s climate goals, how the utility will be operated, and the future of PG&E’s San Francisco landmark headquarters, which includes 1.4 million square feet of office space in SoMa that could be worth $1.25 billion in a sale.
From Bizjournals, here
Source of graphics here
I’m wondering, in their bid for cash in bankruptcy, will PG&E suspend credits for homeowner solar generation? It’s a possibility.