Are California’s solar and wind projects at risk in PG&E bankruptcy?
PG&E has asked a bankruptcy judge for the authority to nullify billions of dollars in contracts with solar and wind farms
By PAUL ROGERS | Bay Area News Group
California has the most far-reaching renewable energy laws in United States.
But with the bankruptcy filing Tuesday by the state’s biggest electric utility, PG&E, major questions are arising about whether California will be able to meet its ambitious targets for solar, wind and other types of green electricity in the years ahead.
…
In stacks of court documents, PG&E asked the bankruptcy court to allow it to potentially cancel up to $42 billion in contracts that it signed over the past 15 years to buy electricity from other companies. PG&E has signed 387 such agreements, it said in court papers, and the majority, or 298, commit PG&E to purchasing solar, wind or other renewable energy to meet California’s environmental goals.
Many of those deals, which are called “power purchase agreements,” are for 15- to 20-year periods. They were signed years ago when solar, wind and other renewable electricity was more expensive than it is today. The revenue they delivered help finance construction of large solar and wind farms across the state.
But PG&E is locked in to billions of dollars of high priced-contracts now, and facing staggering debts from wildfires sparked by its power lines. It also sees declining demand for its electricity as more Californians install residential solar systems and buy power from local community non-profits. On Tuesday, PG&E has asked the bankruptcy court to rule that federal regulators should not be allowed to step in and require that its contracts be left intact.
…
Already, however, PG&E’s bankruptcy is making big waves across the renewable energy industry.
Three weeks ago, S&P Global Ratings cut the credit rating of Berkshire Hathaway’s Topaz Solar Farm, a massive, 550-megawatt project in the Carrizo Plain of San Luis Obispo County, to junk status. The ratings company noted that the plant, one of the world’s largest solar facilities, relies on PG&E for all of its revenue.
…
Last year, citing the need to reduce further greenhouse gas emissions and air pollution, former Gov. Jerry Brown signed a new law requiring 60 percent renewable electricity by 2030, with the other 40 percent by 2045 coming from “carbon free” sources like hydroelectric dams, nuclear power or natural gas plants that capture and store their emissions.
White and other renewable energy advocates worry that if PG&E walks away from many of its old renewable power contracts, that could put solar and renewable energy companies in a financial bind, even potentially bankrupting some.
“The contracts represent the base of California’s energy transition and how we are going to minimize climate change,” White said. “We’re worried that our destiny is now largely in the hands of the bankruptcy court judge.”
Clean energy advocates also have concerns about the fate of PG&E programs to build electric car charging stations, provide rebates for energy-efficient homes and other environmental measures.
But some experts say bankruptcy, while disruptive, may not wreck California’s green energy goals.
If the solar and wind contracts are broken, PG&E will have to renegotiate them at a lower cost, and that could help keep prices lower for ratepayers, said Shon Hiatt, an assistant professor of business administration at the University of Southern California.
Full story here
My biggest question: will PG&E also nullify and renegotiate when it comes to the millions of homes and businesses that have invested in solar power?
I invested in solar power for my home, only as a hedge against future power increases. I got compensated for the electricity I sent into the grid at the market wholesale rate, just like any other generation entity. But if PG&E can be allowed to break contracts with major suppliers, who knows what the compensation rate will be for small fish like homeowners if they are able to break those contracts too?
Even if they don’t do that, with the threat of disaster/bankruptcy recovery surcharges being added to power bills, possibly even 5x greater than what they pay now, ratepayers may find that even with solar, they’ll be faced with life-changing catastrophic bills.
It will spur revolts, and mass exodus from California if that happens.
It’s all madness.
Maybe they better hold off on closing Diablo Canyon.
If ‘they’ really cared about CO2, ‘they’ would embrace nuclear. The more I think about it, the more I think we’re being trolled by the left.
Finally a sane mind!!!!
The emissions are zero as long as Uranium tailings dams do not burst and as long as spent nuclear fuel is stored on site while ‘we’ figure out what to do with it all.
Tailings dams are even less radioactive than the original ore, which itself has radiation levels that are barely measurable.
We know what to do with spent fuel. Reprocess it into new fuel. Except those who are afraid of their own shadows won’t let us do that.
Exactly Reprocessing works great for France. Should be a given.
“Affordable energy in ample quantities is the lifeblood of the industrial societies and a prerequisite for the economic development of the others.” — John P. Holdren, Science Adviser to President Obama. Published in Science 9 February 2001
And what the leftist really want is a radical change of society?
No matter what cult/peer group/market campaign/etc one belongs to, there is no such thing as a pollution free, free lunch. Just like extraction of Uranium from ore. the magic wand for reprocessing also includes vast quantities of toxic chemicals, and disposal thereof after allegedly clean new fuel comes out the other end.
http://users.monash.edu.au/~gmudd/files/2000-MAPW-UMillTailings-Aust.pdf
Reprocessing is very dangerous. Mining uranium is called mining rare earths. Same thing. A byproduct of rare earths mining is nuclear waste.
Just about all manufacturing relies on toxic chemicals.
Disposal of toxic chemicals is a mature technology.
Don Kasper,
Every human activity contains risks. So, which risks are more important for you Alarmists? The risk of CO2 destroying the Earth? Or the risk of reprocessing low level, spent fuel – recycling – nuclear waste? (I would expect you to favor recycling.)
In this day and age, you can’t just be a Luddite and encourage a return to the crude human existence of centuries ago, with its early death, malnutrition, high infant mortality, and all the other bad stuff. And, you can’t sanely expect renewables to save the day within your lifetime.
So, what actually are you for?
It is called Yucca Mountain. Built and ready to go.
And don’t forget, paid for by rate-payers (electricity consumers) – even to this day! We are still paying for Yucca Mountain, even though it’s still not licensed for use. The federal government broke their promise on this in a big way; they either need to open it up or refund the power plants billions of dollars for non-perfomance.
Nuclear power is only expensive because people like you scaremonger about its dangers.
It gets expensive because unlike other forms of energy, if left unattended, and not under parental supervision at all times, it can get rather messy. Even something as benign as a spent fuel pool.
The signature radioisotope for the Fukushima disaster was Cesium 134
Cesium has a far lower boiling point than Plutonium which is thousands of degrees C if memory serves me and so the Fukushima disaster saw widespread cesium fallout. In this instance, being water soluble helps i suppose.
Just because something can be detected is not evidence that it is dangerous.
The reason why the rods are stored in pools is because various know nothings have made reprocessing illegal and have shut down every attempt to do something else with the rods.
Reprocessing is a proven technology with a solid record of being safe.
Bury it and cover it with the billions of spent 2170 lithium cells until we work it all out I suppose.
Mike,
It is correct that uranium processing (and reprocessing) requires the use of dangerous chemicals, and I’d never argue we should make light of it. I would argue, however, that it’s disingenuous to suggest this is a unique issue to the nuclear fuel cycle. Many industrial processes require the use of harmful chemicals.
With regards to uranium, nitric acid and flourine are the main chemicals used (that I’m aware of), and of course the chemical processing plants are designed to handle the resultant waste streams. (In point of fact, except for the actual enrichment, uranium processing is just a chemical processing exercise.)
rip
Mike From Au
January 30, 2019 at 5:23 pm
Mike if you’re interested in a solution to nuclear waste you might like to do some research on “Synroc”. This process developed by Prof. Ted Ringwood at ANU in the 1970’s turns high level waste into rock. It’s not cheap but is probably the best solution for waste. Basically you turn the waste into a solid rock and then bury it deep up in the Pilbara where the ground has been earthquake free for several billion (not million) years.
Greenpeace doesn’t like it because it makes nuclear power safe.
“California has the most far-reaching renewable energy laws in United States.”
And now that their far-reaching renewable energy laws are in conflict with the laws of physics, (Father Time) what next? Do they now get all of their clocks stopped?
California dreamin’.
Cali-fornication.
… is becoming a reality.
Madness? PG&E is only doing has to do to survive! The liability the Democratic Socialist government of California has dumped on the PG&E is simply overwhelming. They cannot survive under the current regulatory environment. They absolutely have to go through bankruptcy to wake the people of California to the absolute insanity of the regulatory nightmare in California.
Sorry. PG&E happily kowtowed to EVERY “green initiative” imposed by the leftist State government and the CA PUC. PG&E wasted $ Billions in ratepayer dollars on every virtue-signaling, government-preferred eco-program ever proposed.
PG&E followed the Jerry Brown model of diverting taxpayer/ratepayer funds from their intended purpose. Jerry let our roads deteriorate to the WORST in the nation, and Traffic jamming to the WORST in America … as he siphoned-off gas taxes, tolls, auto registration fees, etc. to fund a moderate-speed train and mass transit projects that MOST Californians don’t want. PG&E WASTED ratepayer funds on nonsensical (economicallyidiotic) “green” eco-virtue-signaling nonsense … instead of properly maintaining their existing infrastructure. This kind of taxpayer/ratepayer THEFT … is right out of Jerry Brown’s Marxist playbook.
The taxpayers and ratepayers will PAY for this idiocy. As we have been for years of leftist management. Say … what happened to PG&E’s FIRST Latinix CEO? Oh yeah … paid a $ gigantic severance and signed a NDA …
Kenji
I absolutely agree PG&E fell in-line with all the green nonsense – but what practical choice did they have? California voters have shown they’re easily mau-maued into inherently dysfunctional eco and financial policies. It is ridiculously easy to get a California rate-payer mob to rant & foam at the mouth about any PG&E practice you care to mention.
It’ll be interesting to watch how you get retail investors (ie: not pension funds or “other people’s money”) to invest in PG&E. The regulatory sh1t sandwich is only going to get thicker.
However, I’m still of the mind that the only worse management scenario is for PG&E to be a government-run utility. Georgetown, Texas being the poster-child of government utility stupidity.
I can pretty much guarantee that the usual suspects will use PG&E’s troubles as “proof”, that the private sector can’t run utilities and that this proves that the utilities need to be taken over lock, stock and barrel by the government.
No matter what the problem, for them the only conceivable solution is more cow bell, err, government.
But Mark! When that fails they’ll say it wasn’t true socialism!!
Because.. Ah…. Reasons!
The majority of taxpayers didn’t want the train to nowhere? Then why did they vote for it? They also vote for every single tax increase that comes along. They asked for this lunacy. They can’t blame Republicans for their mess, so of course they blame the climate change boogieman or some big corporation. I live in the Bay area, and I’ve just become numb to the insanity.
They voted for the train because the advocates lied.
The usuel lie to get voters to waste money on rail is to claim that new transit spending will cut traffic congestion – it does NOT.
Although the voters passed the idiotic so-called “high-speed” train … initially … the subsequent cost overruns, truth about the ACTUAL speed, increased gasoline taxes, and auto registration fees have SOURED most voters … even the “greenest” of our benevolent (with other people’s money) populace.
I would note that the set of taxpayers is only a subset of the set of voters. Also that the set of taxpayers that are aware they are paying taxes is an even smaller subset.
They CAN blame Democrats for this mess, but they won’t. Most are so indoctrinated that they have no idea they’re responsible for voting as they have. A sad mess. I’d leave if my family were not here.
Well said Kenji, not to mention the insanity in the social welfare arena. My central coast power bill will double because of the way the State of California “regulated” PG&E, but that’s OK if it stops this Green nonsense.
Where would PG&E be today if they had resolutely used their money to upgrade their power lines and clear brush and had avoided every single fire they now are responsible for? They would be undergoing a brutal beat down from the State for not being sufficiently Green. They would be being held up as the last word in irresponsible corporate governance. There would be calls to remove the executives and the board and have them replaced by more people more responsible to the pubic “will.”
No, the PG&E management did what was required of them. That it was devastating to the people of CA is not their problem.
If California ratepayers are suffering from high electricity bills, why doesn’t the state adopt Wynn’s Ontario solution? Borrow massive amounts of money with a bond issue and use the proceeds to reduce green-induced high residential electricity rates. Pay the bonds back later with the same ratepayers’ money. They won’t notice.
Kenji,
“Sorry. PG&E happily kowtowed to EVERY “green initiative” imposed by the leftist State government and the CA PUC. PG&E wasted $ Billions in ratepayer dollars on every virtue-signaling, government-preferred eco-program ever proposed.”
Keep in mind that the California Public Utilities Commission determines PG&E’s rates, not PG&E. One of the factors in deciding those rates is how much ‘Green’ stuff they do. That, of course, meant PG&E has to hire a few sincere sounding environmentalist types to provided a front palatable to the CPUC. You can bet the PG&E execs and board of directors never wanted to get into all that. It was simply forced onto them.
I still don’t understand why we can’t rid ourselves of these greedy corporate power companies and run our own electric grids from the power plant to your meter as a socialist system, you know, like the interstate road system President Eisenhower talked us into after WW2. If we, the people, can run the road system for ourselves, we, the people, should be able to nationalize the archaic, 1920’s, overhead wire power system and modernize it without massive profits for the few. While we’re at it, we can nationalize the railroads and bring them out of their 1850’s stupor like Europe has cruising along at 330 km/hr with no railroad crossings across much richer countries than ours like France or Spain or the Benelux super rich nations.
Why do we have to live like this?
Yeah, and then we can nationalize the banks, oil companies, have only state-approved media, and we are on the way Venezutopia.
Just thinking of how things were here in Oz.
Start with banks – we had a multitude of banks in the 1890’s, they all printed ‘bank notes’, they all lied about the amount of gold and silver (wealth) they had in reserve, they all flooded the economy with junk ‘money’ until we saw prices go higher *then* than we’ve ever seen since (think a million pounds for 1890’s Melbourne) – and then it crashed as people figured, there was no money backing the bits of paper – Government stepped in, passed the Currency Act forbidding banks from printing and coining money, all was good.
The government set up a bank, the Commonwealth Bank which dealt with money in a very regulated and controlled manner, depositors were shareholders and earn dividends as interest, loans were hard to get and inflation was absurdly low as a consequence – money WA available and the bank had strict controls over how it could invest it (usually restricted to developing land and housing and selling it at a profit, contributing to housing availability and monetary stability.
Then smaller banks and credit societies had restrictions placed on how they operated, they were a less restrictive and while viewed as less trustworthy, they had a ready market from people willing to take risks – In the 1930’s we had another crash after many of these little independent banks found themselves a workaround and extended credit that they could not back, figuring the sleigh of hand would be fine – lend money they don’t have, customers pay back debt with real money – win! Except no, with a whole bunch of banks doing this it only took the music to stop, insufficient chairs – boom.
Government stepped in again regulating banks and tightened the reins even more – inflation was under control with wealth essentially flowing in from exports and gold and silver mining raising the countries wealth.. then we deregulated in the ’80’s under a Labor government, privatization took hold and the banks, now off the chain and with the added benefit of the shell game that is credit cards, began ‘wealth creation’ schemes pumping ‘money (debt) into the market again until we’re where we are- less than 3% of the ‘money’ in circulation is legal tender cash, the rest is fabricated.. arguably counterfeit. (I’d also add we shareholders of the national bank overnight became ‘customers’ and our interest evaporated, going to the new bank’s overlords, The Investors) -the deregulation certainly made money easier for fly-by-nights and the wild speculators, many who’ll argue that really really needed access to easy money – it’s certainly made things more exciting which apparently is a good thing..
But for many of us the memory of private banks is less than grand and our fondness for the bank virtually every aussie used, ‘our bank’ as we considered .. it was a stabilizing force in our economy.
Our power and telephone Co’s were as as per the Mussolini laid out fascist models, state owned and unable to profit but they’ve been privatized too, This was promised to bring us greater choice and competition*, yet all it’s done is lead to price hikes as competitors spam the heck out of us with advertising trying to get us to switch to them – this substantial cost has not surprisingly been passed onto consumers. (I never understood that argument, if players want to compete with Gov services, why can’t they do so as actual competitors? – why the need to sell off the government (people’s) asset ?? If they think they can offer services cheaper, let them do so)
maybe my perspective is wonky, I just see we have a system in shambles now with no assurance that our ‘money’ has any worth and no idea how high the power bills will be next month.
“I just see we have a system in shambles now with no assurance that our ‘money’ has any worth and no idea how high the power bills will be next month.”
What I think I see is that regardless of what it is and regardless of the kind of system that is put in place, there will be human beings in decision-making positions and then it becomes inevitable and invariable that sooner or later the decisions that are made will run afoul of reality and the system will cease to function as intended.
Human beings, as a collective bunch, are just not very smart. people. And then there’s politics and politicians with the ability to keep things screwed up but who are mostly no-account scoundrels who always are able to shift the blame to someone else.
i remember and agree
when the commonwealth bank really WAS for the common wealth of the people-profits went back into public projects
and when govt owned power water and roads worked and were affordable and answerable TO the people who paid for them.
privatising to OS money leeches has screwed us well n truly
our health funds are another case
not for profit meant no ripoffs now its for max profit and thats owned by OS interests siphoning off cash and making the strain on the public system so bad its going to pull it down .
usa ians confuse a democratic system of privatisation with a dictatorship style
Aus was never and could never end up like the communist nations.
Did you forget the “/s”?
Or the /i tag. The “i” doesn’t stand for italics.
Oh you mean the “I-D-ten-T” tag?
Oh…. you mean the “I-D-ten-T” tag
Melvin, don’t look now, but the road system is a mess. They are building roads where they aren’t needed and not building roads where they are. All over the country roads are falling apart because “we the people” would rather spend money on other things.
As to the railroads, an intelligent person would first examine the many, many differences between the US and Europe. For one thing, first off, Europe has a population density of 120/km**2 while in the US, the number is less than 36.
If you don’t believe that impacts the usage of trains, then you have never studied the issue.
Beyond that, just because Europe is willing to waste money on trains is not evidence that everyone else needs to.
Finally, Europe is much richer than the US? In what reality?
The net worth of the US is about 98 trillion
while Europe despite having about 30% more people has a net worth of only85 trillion.
Both numbers in USD.
https://en.wikipedia.org/wiki/List_of_countries_by_total_wealth
The US is about the only country that uses its railways as they should be used – for carrying freight. In Europe inefficient state-run railways carry a minuscule part of passenger traffic at extreme cost and incidentally largely blocks using the railways for freighting since it is impossible to run passenger trains efficiently on the same tracks.
High speed trains on separate tracks are only economically viable if there is at least 10,000,000 people at each end of the line. Not many such city pairs within a reasonable distance.
Melvin,
You sure have some strange ideas about the interstate road system in the US. It was built by the Federal Government (with many opposed to the project), and to this day is still maintained with Federal funding and planning. Maybe I just don’t know what you mean by “we the people”, but that has never referred to government, let alone at the federal level; it has always meant individuals, i.e. private means. Remember, “we the people” formed the government.
So all this means that “we the people” do not run the interstate road system, nor most road systems. “We the people” created a government to protect us from force and fraud, first and foremost, but secondly out of convenience: to establish and enforce laws and regulations to make use of common resources consistent and fair. Otherwise, since everybody has their own goals and priorities that don’t necessarily align with everybody else’s, population dense civilizations such as ours would not be possible – there would be chaos. Government is like fire, it is a useful tool, but woe be to anyone that lets it get too large and out of control for it will surely burn them.
From lessons learned in Europe during WW 2, the U.S. built the Interstates system to move the military and evacuate civilians if needed.
Countless lives probably been saved by the these highways.
PG&E is esentially run by California regulators, buying over priced Green Energy and no money for maintenance of power lines.
California High-Speed Rail Authority is a government entity wasting tax payer dollars as no private company could ever.
Welcome to democratic California. They will bankrupt this state, as some are talking about doing to the whole country.
In 2020 America has to go 100% RED. MAGA
The Dream Must be Fulfilled:
California aims beyond 100% clean electricity: negative emissions after 2045
“Along with SB100 California Governor Brown has signed an executive order directing the state to achieve carbon neutrality by 2045 and net negative greenhouse gas emissions after that….
Governor Brown put his signature on Executive Order B-55-18 to Achieve Carbon Neutrality (PDF). The document’s stated goal is directing the state to achieve carbon neutrality by 2045 and net negative greenhouse gas emissions after that.
On 10 September, the governor of California signed an executive order calling for state-wide carbon neutrality by no later than 2045. That exceeds by far any of the targets that countries signed up to in the Paris climate agreement. . . .
A new statewide goal is established to achieve carbon neutrality as soon as possible, and no later than 2045, and achieve and maintain net negative emissions thereafter. This goal is in addition to the existing statewide targets of reducing greenhouse gas emissions.”
North America has negative net CO2 emissions, victory! Problem solved!
It Chinese fault making cheap solar panels.
Friend of my tells me that in my ex homeland where they are working on a hi-way they have built in all sorts of monitoring devices ( cameras, cell phones sygnal interceptors etc) all connected to web via wi-fi, must be a bit of a exaggeration so I’ll add /sarc
Never considered solar here in CA because they always change the rules here depending on which way the wind is blowing (see pun here). Our electric rates have skyrocketed the last decade. And it get’s hot here in So Cal. Wish I could leave this mess.
Keep calm. Keep informed.
My hope is that financial reality will finally kick in. Fiat currency (I am looking at you, Uncle Sam) is really the root of this madness.
Oh, yes. Enjoy.
I agree here.
At some time the unsustainable current debt based growth will come to a halt.
A return to facilities based on economic viability will be essential rather then the perceived share price values.
All economic activity is based on perceived value, from the person that thinks an athletic shoe is worth $200 a pair, to the central bankers setting the prime rate. Money based on the perceived total value of the entire national economy is actually not that bad of an idea. It has it’s benefits. The real problem is the size of the federal and (some) state governments and their profligate spending which requires them to introduce huge debt instruments (t-bills and bonds) into the system in order to fund their increasingly grandiose schemes. That is what is really distorting the system.
It gets worse. Topaz solar was sited in an area that the enviros were so concerned about that they forced the project developers to hand over the land to them at the end of the PPA. They cannot afford skip payment years.
https://www.pv-magazine.com/2014/11/26/worlds-largest-solar-plant-in-operation_100017288/
https://en.wikipedia.org/wiki/Topaz_Solar_Farm
Just read about it at wikipedia. Is their capacity factor of 26% considered normal for a solar installation in the desert in CA? If so, that is pathetic. Anybody know why power production varies so much from month to month? Just clouds. Anybody know why power output has fallen over the last few years?
Physics !
The hot desert sun, plus hot desert temperatures have degraded the cells.
Plus blowing sand has scratched the glass covering the cells.
Plus they probably aren’t cleaning the dust off the panels frequently enough, and of course there’s that 50% NIGHT thing…
It takes a lot of water to clean the panels. Not so easy in the desert. And it can’t be salty either. And dry wiping of the panels means even more scratches….
Joel,
Current studies of solar PV installations over the last couple of decades has shown that total power output decreases on average about 1% a year. This is due to a few factors, including early failure of cell interconnects, aging of the cells, and degradation/contamination of the glass covers.
I personally have a hard time justifying suing PG&E for what are essentially Acts of God under any normal scenario. Powerlines are impacted by wind and lightning strikes and always have been . This doesn’t mean that providers of essential services should be held liable for acts of god. And the State of California should have realized that suing PG&E for all the fire costs would have the impact it did. That was entirely predictable by and sane person. So they are either not sane or this was their intended outcome from the beginning. Hard to explain it any other way.
I agree. Who always ends up paying the bills? RATEPAYERS or TAX PAYERS nearly the same in this case.
So they are either not sane or this was their intended outcome from the beginning. Hard to explain it any other way
So they are either not sane (insane)
or
this was their intended outcome from the beginning (insane).
Easy to explain it either way
Sue it into bankruptcy, then have the government take it over for a song.
The the next time it happens sue the government … hmmm where to from there?
Two problems with that.
The first is that you can’t sue the government, unless the government gives you permission to sue it.
The second is that even if you are allowed to sue, and are allowed to win, the government will just raise taxes to cover the cost of the settlement.
You can sue the Californian government happens all the time under the California Tort Claims Act . Public entities in California can also be held liable for anything that are caused by the negligence by them or their independent contractors.
Agree they just raise taxes and then everyone in the state pays .. so it’s heads they lose and tails they lose whichever way this goes.
Incompetence is another explanation. Or perhaps the “tragedy of the commons”.
Dr. Bob, the State of California and I guess the citizens who elected the government also share a burden in this. Poor forestry practices allowed this to get out of hand.
The courts have decided that in the interests of making sure that lawyers always have access to rich payouts, that actually being at fault for something is not necessary for a company to be forced to pay for it.
If you are the only party being sued with lots of money, even if you were only 1% at fault, you can be forced to pay for 100% of the costs, and of course the attorney’s fees.
So many “green” technologies leaving a trail of economic trauma in their wake. Would PG&E have had greater ability to weather the economic impact from the wildfires if it was actually making, rather than losing, money from renewables?
It’s hard to turn the world Green when you’re in the RED.
They are doomed, DOOMED! Glad I moved away from there…
And the State of California should have realized that suing PG&E for all the fire costs would have the impact it did. That was entirely predictable by and sane person. So they are either not sane or this was their intended outcome from the beginning. Hard to explain it any other way.
Given how far left Cali is, I’m guessing it mostly the former. the later requires more intelligence than Cali politicos have shown themselves capable of.
Do most folks have fire insurance in CA? If so, watch for a reversal of liability. That would make insurance companies cover most costs, which would raise insurance costs for everyone in the USA with fire insurance (redistribute the burden). Then the re-insurance racket can skim more money and further raise rates. But CA can walk away, and PG&E be responsible for its own rebuilding. Sounds like that is the only way to “save” the green agenda from collapse – and we can’t have that, now, can we!
You don’t understand how the industry works; fire insurance rates won’t be going up in other states because of California’s issues, because California’s issues are unique to California, and there is no justification for raising rates elsewhere based on California’s “unique” wildfire risks (nor would other state regulators permit rate increases in their own states based on what’s going on in California).
The “madness” is AKA “the market”. We are seeing the beginning of a world revolution in the production and distribution of electricity. As sure as automobiles and aircraft replaced every other prior mode of land transportation, power grids will be replaced by home or district energy systems. Some of those systems will be wind and sun fueled, but the majority of consumers will opt for less expensive, more reliable fossil fuel burners – at least until magic pellets come along.
These high cost long term renewables contracts will almost certainly be cancelled in bankruptcy. The new junk bond rating on Topaz ‘proves’ this—and that happened BEFORE the chapter 11 filing.
An interesting question is whether the California state renewable laws can force PGE to re-enter them as part of a plan of reorganization in probable clear contravention of US bankruptcy law enabled by Constitution A1§8.4. Under most readings of A6§2 probably not. So the California renewbles mandate PGE crash test dummy has just been launched toward a big solid wall.
A further result of the cancellations will likely be ensuing bankruptcy of many of these California renewable projects. Gonna be a big mess.
I advise laying in popcorn supplies for the coming show.
As to bankruptcy law, I would normally agree with your assessment, but after the farce of the GM bankruptcy and the norms and precedents that were tossed out the window, I would be very skeptical of relying on the law to be followed, especially when the stakes and ramifications are this large, and the environazi lobby is so well-organized and well-funded.
Yeah, but Obama is no longer in office. Trump has shown much less tendency to creatively interpret law.
It is not Trump, but the courts, and we are talking about California and a powerful lobby, just as the unions were in the GM case. The only difference it is doubtful that Trump would intervene as I believe Obama did.
Part of the filing of bankruptcy was due to Judge Alsup (remember him) today declaring PG&E was in violation of their probation that was imposed by him after the 2017 fires. Monetary fines to come perhaps.
Sammy Roth of LA Times dug deeper than others into the fallout from PG&E’s wildfire-induced bankrupcy. The article published in The Seattle Times is PG&E bankruptcy could undermine utilities’ efforts against climate change.
“Solar and wind developers depend on creditworthy utilities to buy electricity from their projects under long-term contracts, but that calculus changes in a world where a 30-year purchase agreement doesn’t guarantee 30 years of payments.”
Roth’s article: https://www.seattletimes.com/business/pge-bankruptcy-could-undermine-utilities-efforts-against-climate-change/?utm_source=RSS&utm_medium=Referral&utm_campaign=RSS_seattle-news
My synopsis: https://rclutz.wordpress.com/2019/01/18/california-renewables-to-lose-pge/
“There’s concern in the industry that a bankruptcy court judge could order PG&E to reduce its payments to solar- and wind-project owners to help the company pay off other debts.”
When in 1988 in Los Angles we were surprised to note how like South Australia both the climate and even the design of many of the houses were. .
Perhaps its the Climate that causes the odd thinking common to both places after all.
We did enjoy both the old movie sets an Disneyland.
MJE
How long before some red-leaning city takes a page from the left, and declares themselves a ‘sanctuary city’ for the production of electricity using fossil fuels? Just declare the city exempt from state laws, rules, and regulations, and threaten to secede from the state if their decisions are not honored. Goose, gander etc.
Hmmmn, the cities are where the freeloading liberals all live. The countryside is way to far from all the amenities that they are accustomed to
The bigger the city, the more “Progressive” it is. I suspect scaling factors are at work.
How long before some red-leaning city takes a page from the left
Do such beasts exists? The big cities tend to be deep blue.
Once the Chief Litigating Ofc (who is Acting CEO) and Board dissolve the company and slice up the Pension Fund, the main reason for bankruptcy and to squash the Homicide Complaints of survivors and relatives, they will be … Off To The French Riviera for drinks, drugs, fun and sun.
Ha ha
This might be the “big one”. The capital shock that this probably carries into the energy business is not going to be over soon. Forty-two big B dollars were leverage for a lot more than what we will see play out in the near term. It seems likely this bankruptcy is sufficient to pop the renewables bubble with probably many collateral entities. A renegotiation of the first tier of commitments over the long term were the basis for other commitments down the line that have no visibility yet. The tsunami will follow. Make sure seatbelts are fastened.
Steven I hope you are correct in your assessment. Maybe this will be the trigger that puts some sanity back in to the electrical generation markets.
Thank God that Trump won. I can see Hillary rushing forward to offer unlimited amounts of tax payer dollars to keep all these companies viable.
Who woulda thunk we’d be fondly remembering the days when Enron was in charge?
Yee-ouch, secryn. 😉
Ruh roh
Time for another tax, or may just pay next years taxes now.
Sorry, O/T….but can someone tell me if the term ‘Polar Vortex’ existed before that ridiculous film, The Day After Tomorrow’?
Yes. I was using circumpolar vortex in lectures back in the 70s.
Thanks.
It is one thing to sue the “Evil, Big Tobacco” enterprise when nobody really suffers if a multi-billion dollar company disappears so the lawyers winning a class action suit can collect billions. After all, there are plenty of purveyors of tobacco ready to step in (did I forget to mention weed?)
But when the fellows you are suing happen to provide the Average Joe & Susan (OK, la Juan y la Susanna de la media) with heat, lighting, air conditioning, etc., etc.,… watching the melt down may not be all fun and games.
Civil society could suffer. Perhaps big tech giants could step in and show California the way. Won’t that be fun.
to a certain extent they are already laying the groundwork with those wonderful idiotic “Energy Upgrade California” commercial that all in essence say… do without using electricity and its conveniences is an “Upgrade”. so pretty much “1984” style Orwell … less is more, doing without is prospering, reverting to caveman energy use is advancing to the future….
Cheers!
Joe
Have to agree with the post that PG&E helped bring this on themselves. Like Fannie and Freddie in the mortgage market large corporations have a tendency to become government sponsored entities. When the stuff hits the fan they suddenly find themselves playing the villain to the same politicians who encouraged them down the path to destruction.
If rates get crazy in CA it won’t be the first time.
It is also where the fault lies at the feet of those in CA as they voted for this stuff.
Sure there are a minority in CA that are adversely impacted and did not vote for it but they are in a democracy and that is how it works. If you didn’t like it you should have got out there to rally against it or left the state.