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
Added:
I’m wondering, in their bid for cash in bankruptcy, will PG&E suspend credits for homeowner solar generation? It’s a possibility.
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The bankruptcy filing may merely be a legal maneuver.
I wonder if the bankruptcy filing has anything to do with automatic suspensions of all legal proceedings during bankruptcy transitions?
Just closing all the rural power-lines would seem to be the simple solution. You want to live in an isolated location, you figure out how to get electricity.
Solar panels plus battery? should work a treat in sunny California.
Right Mr. Griffin, the economics of that simply don’t work, especially when you have to replace and properly dispose of the batteries every couple of years. That doesn’t even consider the capital outlay.
I know from experience, something you probably don’t have as a birding specialist. I helped install a solar-battery system for our local observatory because ecotards wouldn’t allow extension of a power line about 500 feet from the shooting range in the hallowed sacred ground known as Bidwell Park. The system routinely fails to provide enough power, because efficiency deteriorates.
But you go on keep dreaming that green dream with flowers, unicorns, and happy land.
Meanwhile, I’m going to accelerate my plans to get the hell out of this green state of madness.
My Dearest Mr. Watts – Thank-you for that bit of insight into that enigmatic troll-like figure we all know (and love? Loathe?) of as Griff (old Griffy-Pooh, eh?). While I am (somewhat) ever amused at his constant/incessant touting of all things ‘green’, it still chafes my hide when he bellows from his perch Under The Bridge that proven archaic and therefore inadequate-in-a-modern-context energy technologies are the wave of the future, when they have proven out (again) to be utter failures in providing as-needed electrical energy for our modern industrial/commercial society. Also, regarding your plans to vacate Cali – where might you be considering as your new Land of Fortune? Texas, perhaps? I wish you nothing but Good Wishes as you sell your holdings and venture forth to Greener (pun intended) Pastures….here’s hoping that your Real property values will not soon be sinking before you are able to list and sell!
All the best,
MCR
Speaking as a Texan, I welcome Anthony!
Birder? Isn’t griff a climate scientist?
Nope some solar panel installer or reseller or like from what I remember. So your basic corrupt salesman speal when he types.
I know the answer to this question griff, but I wonder if you know how much a battery storage facility costs? I’ll give you a hint: for a few days worth of storage, you could build another fossil fuel plant instead.
Batteries are coming down in price so fast that in a few years they will be paying you to take them.
At least what I’m told.
Wake me up when they get there.
I guess you have never been to northern California Griff. The north coast is famous for fogginess. San Francisco has more than 100 foggy days per year and Eureka has about 30 fewer sunny days than the US average.
“The coldest winter I ever saw was the summer I spent in San Francisco.”
Samuel Clemens (Mark Twain)
I thought that comment was by Rudyard Kipling, who grew up in India. Missouri is quite a lot colder than SF.
At least Missouri manages to keep it’s cold confined to winter, where it belongs.
The permit costs in California are greater than the panel component costs themselves.
Sunny California isn’t sunny for much of the year.
Places like SanFran and parts of N. CA, it’s cloudy more than it’s sunny.
I like this idea, but how about extending it state wide?
The expansion of housing in an area surrounded by woodlands with no adequate evacuation routes and not even cleaned up from the fire that occurred 10 years earlier wasn’t a sound plan and was advised against by the grand jury ten years ago. It wasn’t so much the electricity supply to the town of Paradise that was the problem, it was the high voltage power lines running from the hydroelectric generators in the region.
With the price of electricity up and gas down I have one word for the people of California: Generac.
Yes if these rate increase happen, it will in fact be cheaper to run your own generator.
..unless a bidding war starts for generators. That’s another price term left out of the equation.
I have often wondered about the feasibility of onsite installation of small/suitably sized diesel or natural gas generators with heat capture on the exhaust for heating requirements. There are many applications especially in heating seasons where the efficiency and thermal storage (in H20 or physical mass) of the exhaust heat could lessen overall grid electricity costs paid by the user and utilize the associated generation and transmission losses by the provider. There are many applications where the need for electrical power and thermal heating would come close to balancing out. Power companies would likely balk at the idea and push for legislation to stop it.
How can PG&E be liable for wildfires when the government in california has clearly said the problem was caused by global warming?
Heck of a good point
Probably part of the defense already
Not negligent, not liable does not apply here. The California courts have ruled that even if PGE was not negligent, if their equipment caused the fire, then PG&E customers are liable. If, or the other hand, they were negligent, as was the case with the gas pipeline explosions, the shareholders are liable.
An unholy union of “joint and several” liability with “strict” liability.
“And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?”
if they really believed in AGW why then did they not even try to manage forests effectively and ensure private holdings did the same?
Can WUWT be an intervenor?
True, but no so fast as NextERA got the FERC to claim concurrent jurisdiction with the bankruptcy court, hoping to stop PGE from doing exactly that.
We are watching as a parasitical class are taking over. Using the law as a weapon they can nationalize companies, utilities. Increase regulations, control, health and safety, health care.
Hitler said “why should I nationalize the fabric when I can national the owner”
Is the reason for pushing electric vehicles really a way for electric companies to transfer paying customers from oil companies to themselves thus increasing their revenue with very little capital expenditure? Doesn’t the government have more control over utilities than private companies? ( if they don’t now they certainly will)
Five times the current rate… hmmm… like beloved green Denmark. How proud Californians will be.
GW: Until you actually understand what they intend to do to us. Get over yourself please. Brett
PGandE is a creature of the California political environment.
They bring their rate case to the PUC, the PUC says “Okay we/the legislature wants this ” and PGandE says “Okay, we’ll support that but our guaranteed rate of return is X so we’ll either have to take money out of or raise rates ”
The PUC looks around and says “Okay, we want and you can take money out of to meet your rate of return.”
Caly allows suing PG&E for wildfires, PG&E files bankruptcy. Easy come, easy go.
Obviously power generation is too big to fail. It will require a shed load of money to keep going.
Remember, Governments don’t have money, they spend the money entrusted to them by the tax payers wisely.
I’m thankful that I don’t live in California or Germany. Mind you, over here we have the same lunacy with shipping wood pellets from the US to burnt in UK.
The result would not have been any different IF the high voltage through those overhead wires that sparked against dry trees had been generated by wind or solar rather than fossil fuel.
Actually, if a higher percentage of the electrical power was wind and solar, there would have been more fires. Wind and solar are far more diffuse than fossil fuel power plants, so more power lines would have been installed. More lines = more potential ignition sources.
Here is a very interesting story about PG&E from the DC. The thrust of the story is that PG&E wants to get away from 40 billion dollars worth of renewable energy contracts. …https://dailycaller.com/2019/01/30/bankrupt-california-pge-green-energy/
When I lived in So Cal years ago, SoCalEdison was on a tiered service scheme – look like it still is.
https://www.sce.com/residential/rates/Standard-Residential-Rate-Plan
PG&E rates
https://www.pge.com/tariffs/assets/pdf/tariffbook/ELEC_SCHEDS_E-1.pdf
The catch is the allowance they give you per day. Ridiculously low.
Times 4? LOL