Guest essay by Larry Hamlin
Pacific Gas & Electric has won a huge legal decision from the bankruptcy court agreeing with its position that in can proceed to renegotiate $42 billion dollars in costly energy power purchase contract commitments including many renewable energy contracts.
This decision will likely be appealed but for the time being the $42 billion dollars in power purchase energy contracts with suppliers including renewable energy projects with NextEra Energy Inc., Consolidated Edison Inc. and Berkshire Hathaway Inc. are under challenge and could be subject to complex and lengthy renegotiations as a part of PG&E’s bankruptcy proceedings which not only might delay these planned renewable contracts but could also significantly jeopardize California’s future renewable energy use time table.
The Wall Street Journal noted the following regarding how this ruling came about and its significance concerning PG&E’s future renewable energy contracts.
“The ruling by Judge Dennis Montali, who is presiding over PG&E’s chapter 11 proceeding, may allow the company to get out of $42 billion in power-purchase agreements, including many pioneering wind and solar deals that are now well above current market prices.”
“PG&E said it was pleased with Friday’s ruling, but appreciates concern that its bankruptcy will slow progress toward promoting clean energy. The company said it has yet to decide which contracts it will keep and which it will reject.
Bankruptcy gives PG&E the freedom to get out of power deals that it considers unfavorable, as long as a judge agrees. But the Federal Energy Regulatory Commission, which regulates interstate power markets, has asserted it also has authority over PG&E’s contract decisions.
In his ruling late Friday, Judge Montali disagreed, finding that FERC overstepped its authority in threatening to overrule his decisions on PG&E’s power-purchase agreements. FERC had sought to have the bankruptcy judge agree to side-by-side jurisdiction, which would have made it tougher for PG&E to get out of deals.
PG&E has $34.5 billion worth of renewable-energy contracts for electricity deliveries between now and 2043, according to a filing with FERC. Rejecting those with above-market prices could save the company $1.4 billion annually, according to Moody’s Investors Service.”
A recent study by the Texas Public Policy Foundation has exposed how the federal renewable energy Production Tax Credit (PTC) schemes cost the U. S. government billions of dollars in revenue subsidies with those benefits provided to a small number of large energy companies which own and operate renewable energy projects.
The study noted the following regarding the huge financial impact to U.S. tax payers regarding this climate alarmist driven subsidy scheme falsely pushing unnecessary demands to increase use of costly and unreliable renewable energy:
“The federal production tax credit (PTC) for wind energy producers has cost the U.S. government billions of dollars in revenues, distorted energy markets, and benefited just a few large corporations, a new study reports.
The federal government imposed the PTC in 1992 in an effort to promote renewable energy. The PTC, currently 1.9 cents per kilowatt hour for the first 10 years of a wind farm’s operations, has been extended several times by Congress. It is scheduled to begin phasing out at the end of 2019. The PTC and tax depreciation allowances cover more than 50 percent of the capital costs of a typical wind facility.”
“The biggest recipient of PTC largesse is NextEra Energy, the nation’s largest wind power producer, with approximately 10,000 wind turbines and annual revenues of $17.5 billion, reports the study by TPPF Senior Fellow Angela Erickson. More than $5.7 billion in taxpayer dollars flowed to NextEra Energy courtesy of the PTC between 2007 and 2016, making NextEra “one of the most subsidized Fortune 500 companies,” writes Erickson.”
“Over the decades, the PTC has caused market distortions, including instances of “negative pricing,” where producers operate wind turbines when the electricity they provide is not needed, simply to receive PTC revenue.
“The PTC’s $24 per megawatt-hour credit sometimes results in wind energy producers paying electricity suppliers to take their energy rather than turning off wind turbines during surplus energy hours (e.g., early mornings when people are sleeping),” the study states. “By keeping wind turbines running, producers will receive the tax credit even though the grid does not need the energy. The resulting low prices may harm the reliability of the grid by reducing the incentives for investing in energies that can supply baseline generation.”
“With the PTC set to be phased out by the end of 2019, companies are in an aggressive race to erect as many wind turbines as possible across the nation. Corporations that start construction of wind facilities before December 31, 2019 will continue to receive PTC tax credit payments until December 2029.
As a result, “the federal government will transfer at least an additional $48 billion in PTC subsidies to owners or financiers of commercial wind farms,” through 2029, Erickson reports.”
NextEra Energy Inc. which had pushed FERC to intervene in the PG&E bankruptcy proceeding along with other renewable energy companies impacted by this ruling could experience significant revenue impacts to their businesses as a consequence of the lost PTC subsidies.
The PG&E bankruptcy situation regarding these PTC renewable energy contracts is providing unwanted visibility exposing the huge multibillion dollar subsidy benefits being provided to large companies building costly and unreliable renewable energy projects which impose huge financial tax burdens upon the public while degrading the reliability, stability and cost effectiveness of the country’s electric system.
How much from the subsidy payments are “looping back” to the politicians and government bureaucrats in the form of kickbacks from the recipients of the subsidy payments?
Cynic! And one does wonder…
Time to tell the Federal Energy Regulatory Commission to go FERC itself.
Perhaps The Donald could play one of his Trump Cards
Just like Hillary got excellent prices on cattle futures that provided great returns in just a few days and as AlGore got founder shares in many Eco-subsidy sumps?
Good question. Berkshire Hathaway (Warren Buffet) may not give give much, but the companies controlled by Berkshire give a lot to re-election campaigns. He will do all he can to make sure PG&E fails. He has said before that subsidies are all that makes renewables pay, but if the rates are cut, the bottom line will suffer.
KaliforniaKook
Actually, probably not. You appear to know as little about how he manages Berkshire Hathaway as you do about the spelling of his last name.
Berkshire owns over 50 companies outright, and invests $100B+ in another 48 public companies.
Buffett is notorious for buying good companies that have good management…and letting them run the companies without corporate micro-management.
Not directly with kickbacks as the is illegal and traceable, but with political contributions and campaign donations. there are limits on that as well, but super-pacs seem to create enormous loop-holes.
Told you so – 17 YEARS AGO!
The four most beautiful words in our common language: “I told you so.”
– Gore Vidal, October 3, 1925 – July 31, 2012
https://wattsupwiththat.com/2018/07/23/irony-can-be-so-ironic-grid-storage-increases-carbon-emissions/#comment-2412177
We published in 2002:
“THE ULTIMATE AGENDA OF PRO-KYOTO ADVOCATES IS TO ELIMINATE FOSSIL FUELS, BUT THIS WOULD RESULT IN A CATASTROPHIC SHORTFALL IN GLOBAL ENERGY SUPPLY – THE WASTEFUL, INEFFICIENT ENERGY SOLUTIONS PROPOSED BY KYOTO ADVOCATES SIMPLY CANNOT REPLACE FOSSIL FUELS.”
Source:
DEBATE ON THE KYOTO ACCORD
PEGG, reprinted in edited form at their request by several other professional journals, the Globe and Mail and La Presse in translation, by Baliunas, Patterson and MacRae.
http://www.friendsofscience.org/assets/documents/KyotoAPEGA2002REV1.pdf
Wind and solar power do NOT contribute significant economic (dispatchable) electric power to the grid.
This is a simple, proved hypothesis, yet tens of trillions of dollars have been wasted globally on this green energy nonsense.
So next time, good people, please listen to your Uncle Allan, who cares for your well-being, and does not want you to waste trillions on foolish green energy schemes/scams – just to drive up energy costs, reduce grid reliability, and needlessly increase Winter Deaths – that is the job of our idiot leftist politicians – if you ever voted for any of these leftist idiots, please just do not vote anymore because you are ‘way too stupid to vote – thank you for your kind consideration!
To try to get this message across to the lower-end of the intellectual spectrum, especially our politicians, I rephrased the message about a decade ago:
“WIND POWER – IT DOESN’T JUST BLOW – IT SUCKS!”
“SOLAR POWER – STICK IT WHERE THE SUN DON’T SHINE!”
It seems to s-l-o-w-l-y be working! 🙂
____________________________
The PG&E bankruptcy situation regarding these PTC renewable energy contracts is providing unwanted visibility exposing the huge multibillion dollar subsidy benefits being provided to large companies building costly and unreliable renewable energy projects which impose huge financial tax burdens upon the public while degrading the reliability, stability and cost effectiveness of the country’s electric system
Huh … ? And here I thought “transparency” was the loftiest “morality” of leftist politicians. Oh, yeah … transparency only applies to the Orangeman’s taxes … not the THEFT of your tax dollars by BIG GREEN
Oh, no! It is only the intent of the person getting the subsidies and such that matters to a leftist or green. One must remember that their intent is to save the world, so the minor little fact that they are rent seekers is of no concern to you plebes.
Kenji you beat me to it. I’d picked up the exact same quote, to comment. Trouble is, the problem has been very very visible for many years, but the MSM has chosen not to see it.
I loved Larry Hamlin’s concluding paragraph, err … sentence.
regarding: “And here I thought “transparency” was the loftiest “morality” of leftist politicians.”
response: “But not when it’s *my* (green) kimono.”
.
.
.
per the web “Open kimono” means to reveal what is being planned or to share important information freely. Similar to ”open the books” or an “open door policy,” opening the kimono means revealing the inner workings of a project or company to an outside party.
Now you’ve gotten me all hot and bothered speaking of open kimonos …
Ouch.
That’s gonna hurt.
😉
Couldn’t happen to a more deserving bunch!
Buffett himself has said that the wind energy business is not economic. He has said publicly that the Production Tax Credits are the only reason Berkshire is in the business.
Buffet was suckered …… $350M worth …… into a renewable energy scam that just went bankrupt. He was only into it for the tax credits and now not only will he be losing his investment but the credits as well …. that he already took advantage of.
If true, couldn’t happen to a nicer, more deserving guy.
Chapter 11 allows a business to continue in operation. If enforcing the renewable energy contracts makes PG&E non viable, then a few things can happen. It could become viable by having huge increases in electricity prices and thereby stay in chapter 11. Otherwise, it could be forced into chapter 7. It could cease operations. If a buyer couldn’t be found, California might have to nationalize it.
Either California has to admit that its renewable energy plans are not going to work, or the citizens of California suffer financially. That should cause a lot of lukewarm CAGW supporters to reevaluate their stance.
“That should cause a lot of lukewarm CAGW supporters to reevaluate their stance.”
They’ll blame it on Trump and middle-aged white men, and they’ll all be happy.
The dedicated fanatics will never be changed.
Everyone else will feel the pain and put the blame in the right place.
The people advocating renewable energy assumed that all technology obeys Moore’s Law. ie. once there was a small market for renewable energy, it would get cheaper and cheaper until it was practically free. Most technology doesn’t work that way.
We’re seeing the physical limits to renewable energy. Fully implementing it would require massive, and very unpleasant, changes to society. People notice that kind of thing.
Well Bill Gates was only looking at one side of the equation of computer vs car industry comparison.
He is correct that the $25,000 car could be getting 1,000 miles to the gallon. But the computer analogy would require that the car be smaller than a dinky toy size, just as the computer size shrank from roomsize to a smart phone..
25 dollar car.
I’m willing to bet that Bill Gates didn’t receive a driver’s license till his late 20’s if not later … unlike most of his contemporaries who got theirs at age 16. So he doesn’t understand the profound differences in automobiles manufactured in the late 70’s -vs- the highly technological autos of today. He probably thinks 1970’s autos had ECU computers running the fuel injection system? Or computerized ABS systems. Or airbags, etc. etc.
Or … Bill Gates is a psychotic nut-job automobile hater who “believes” that BIG OIL is secretly hiding a patent for water-fueled autos … because they want to MAKE us pay for their dirty petrol. All in collusion with the BIG AUTO manufacturers.
It’s this kind of degenerate thinking that leads a gullible public to “believe” we can all have a “clean, green” future … with no loss of our standard of living. Yet, here I stand at my kitchen counter … reading a letter from PG&E telling me they will be SHUTTING OFF my power anytime they want … due to fire fear. Yeah … some technological improvement … eh Billy?
Funny, they never mind Big Wind ripping everyone off…..
The other things Bill neglected to mention in his comparison:
You car won’t catch viruses that slow or stop it just because you drive it around town; that Nigerian prince and banker have yet to use your car to steal your mone and you car won’t tell hackers your bank account password.
One of Gates legacies will be his operating system gave the world functioning PCs; too bad he couldn’t make it safe & functioning PCs.
That’s hardly fair, the computer industry started more than two thousand years ago with the Antikythera device. Automobiles seem to be doing pretty well in their 200 year evolution from steam powered trains compared to that.
There was an evidently not sufficiently well-known retort to Mr Gates, attributed to sources within G.M. Here it is:
At a recent computer expo (COMDEX), Bill Gates reportedly compared the computer industry with the auto industry and stated “if GM had kept up with the technology like the computer industry has, we would all be driving $25.00 cars that got 1,000 miles to the gallon.”
In response to Bill’s comments, General Motors issued the following press release –
If GM had developed technology like Microsoft, we would all be driving cars with the following characteristics –
1. For no reason whatsoever, your car would crash twice a day.
2. Every time they repainted the lines in the road, you would have to buy a new car.
3. Occasionally your car would die on the freeway for no reason. You would have to pull over to the side of the road, close all of the windows, shut off the car, restart it, and reopen the windows before you could continue. For some reason you would simply accept this.
4. Occasionally, executing a maneuver such as a left turn would cause your car to shut down and refuse to restart, in which case you would have to reinstall the engine.
5. Only one person at a time could use the car unless you bought “car NT”, but then you would have to buy more seats.
6. Macintosh would make a car that was powered by the sun, was reliable, five times as fast and twice as easy to drive – but would only run on five percent of the roads.
7. The oil, water temperature, and alternator warning lights would all be replaced by a single “General Protection Fault” warning light.
10. The airbag system would ask “are you sure?” before deploying.
11. Occasionally, for no reason whatsoever, your car would lock you out and refuse to let you in until you simultaneously lifted the door handle, turned the key and grabbed hold of the radio antenna.
12. GM would require all car buyers to also purchase a deluxe set of Rand McNally road maps (now a GM subsidiary), even though they neither need nor want them. Attempting to delete this option would immediately cause the cars performance to diminish by 50% or more. Moreover, GM would become a target for investigation by the Justice Dept.
13. Every time GM introduced a new car, car buyers would have to learn to drive all over again because none of the controls would operate in the same manner as the old car.
14. You’d have to press the “Start” button to turn the engine off.
commieBob You may have encountered this from the Manhattan Institute: https://www.manhattan-institute.org/green-energy-revolution-near-impossible
It’s a recent deeper dive into exactly the point you raise.
Because I waited so long, you probably won’t see this. Sorry.
Thank you very much for pointing me to that most excellent article.
One of the things that ensured the success of the early American space program was NASA’s insistence on using off the shelf parts rather than gambling on the development of new technology.
You’re welcome, commieBob. I signed up for alerts on this story (very helpful if one comments, which I usually do not), so I did see your reply. I tell all my friends about this very informative blog up here in Vancouver. I keep wondering how I went from completely believing the climate emergency narrative to having a completely opposite perspective today; that is, since discovering WattsUpWithThat. I guess, reading critically what is presented here caused me to get the sinking feeling at some point that I’d been duped.
Legal question: Supposing that PG&E get out of the crippling ruinables contracts and get back on their financial feet. Would other utilities be able to ditch their ruinables contracts too? If not, it would seem to me that PG&E would have an unfair competitive advantage. (NB. I’m not arguing against the judge’s decision. It looks very reasonable to me. Just that it should apply equally to all, shouldn’t it?).
IF they file for bankruptcy….
It only takes one to be successful before others will try the same tactic.
Unless you are filing suit against the Fossil Fuel Industry, then it only takes one filing to see others follow suit
This whole scenario happened in the natural gas pipeline industry in the late 80’s and early 90’s. Most people didn’t realize it at the time, and only a few industry people even remember it now. But, basically a whole bunch of transmission companies started to go bankrupt because they were locked into take or pay contracts that were fatally uneconomic. Those that were able to manipulate the legal system were the big winners.
Perhaps the most famous of them was Jerry Jones, who bought the Dallas Cowboys with his winnings from a lawsuit against Arkla gas based on this entire mess.
The ENRON conglomerate grew out from those 80-90’s pipeline company mergers as well.
There may be a spate of bankruptcies following this decision.
This decision applies only to PG&E. It is by the bankruptcy judge that is supervising PG&E’s bankruptcy.
Lots of things (including renegotiating contracts) happen under the supervision of a bankruptcy court that don’t apply to non-bankrupt petitioners.
However, lots of publicity about expensive, egregious, poorly performing and deliberately vague disclosures of taxpayer-provided subsidies can’t hurt…
https://www.bbc.co.uk/news/uk-northern-ireland-38301428
The renewable energy fraud along with carbon credit fraud costs tax payers, in many countries, billions in subsidy (often paid to millionaires).
It caused the collapse of the Northern Ireland Government in 2017. One person reportedly was set to earn over £1 million for heating an empty shed! The scheme allegedly cost tax payers and other energy users (often in fuel poverty) over £700 million in subsidy to heat empty farm buildings and swimming pools for millionaires.
Don’t take my word for it, read the report from the religiously green zealots at the BBC.
There’s a wiki article on the scandal that makes my head spin.
At the bottom of the wiki article on the scandal is a link to the cobra effect. The British put a bounty on Cobras in India to reduce the number of cobras. That promoted some enterprising folks to start breeding cobras.
No matter what the government does, someone will find a way to make money off it and render it useless or worse.
Maybe I missed it. If California has law requiring renewables, how does bankruptcy eliminate the requirement? Seems like withdrawal from contracts simply results in renegotiation of price or possibly buying energy from a Texas wind farm at a market price. Either way under the renewable requirement, the U.S. taxpayers pay some money to a subsidy farmer to prop up a mandate that still allows multiple governments to run a utility stuck in the middle right into the ground. I’m guessing once that is done, California will establish a government agency to replace PG&E. Mission fully accomplished.
@Coach Springer
If California has a law requiring renewables, how does bankruptcy eliminate the requirement?
If the government of California passed a law that required that the boiling point of water was lowered to 90ºC to save energy would it work? Regulators can demand more renewables but the only way to get it through higher prices for consumers. When utilities go under, the providers will have to accept lower prices or go under themselves and sell the assets at liquidation prices to people who could offer lower prices because they no longer have to worry about paying interest on the bonds sold to fund the production in the first place.
See “Atlas Shrugged”.
The sales won’t be taking place from Texas; the needed HV transmission facilities don’t exist.
Not yet anyway.
There are/will be some not insubstantial costs associated with construction of such facilities, too.
“President Trump Delivers Remarks on Renewable Energy”
LIVE @ 4:20 PM EDT
https://www.youtube.com/watch?v=u4JarXcJdYI
This should be interesting….
Or……
https://www.whitehouse.gov/live/
“The PG&E bankruptcy situation regarding these PTC renewable energy contracts is providing unwanted visibility exposing the huge multibillion dollar subsidy benefits being provided to large companies building costly and unreliable renewable energy projects which impose huge financial tax burdens upon the public while degrading the reliability, stability and cost effectiveness of the country’s electric system.”
GOOD! Shine the lights on this brightly and don’t allow it to scurry back under the rug!
It’s high time for the SCAM to be exposed!
Ivanpah can kiss its @$$ goodbye!
It will soon be depicted in an episode of “Mysteries of the Abandoned” along withe all of the British “big ear” listening devices from WW II
Buffett is getting what he deserves. After decades of making a virtue of investing in companies where governments keep away competition or overpay and guarantee profits, he may discover that betting on bankrupt governments and inefficient companies that need constant protection may be riskier than imagined.
The last paragraph
“The PG&E bankruptcy situation regarding these PTC renewable energy contracts is providing unwanted visibility exposing the huge multibillion dollar subsidy benefits being provided to large companies building costly and unreliable renewable energy projects which impose huge financial tax burdens upon the public while degrading the reliability, stability and cost effectiveness of the country’s electric system.”
includes a lot of obvious editorializing, but is dead-on-accurate at the same time.
Imagine if the mainstream news slanted in the same direction. The entire boondoggle would end overnight, or would never have gotten a foothold at the start.
When a product or service is provided, it should fulfil a need or want of the prospective consumer. This must be supplied at a cost that is reasonable for the aforesaid consumer and must fulfil the required expected results from the outlay of agreed money by the consumer.
If some fabricated element is introduced to facilitate a sale to the consumer at artificially low market costs, the cost differential has to be paid by someone. In this case the provider has been suckered in, along with the taxpayers.
This provider fortunately has the resources to protest and so jeopardize the giant globalist ‘renewable’ energy use agenda.
But where are the compensations for the taxpayer suckers?
This is normal. It means only that the holders of these green energy contracts have to stand in line with every other creditor in bankruptcy court.
Tom,
Exactly! In bankruptcy, PG&E can shed unprofitable aspects of their business, including contractual commitments that are liabilities. In a nutshell, the expensive, inefficient renewable energy contracts may be non-renewable, within the restructuring shelter of bankruptcy.
Government subsidies for oil companies bad, subsidies that go straight into green bandits pockets fine!!
DayHay what are the subsidies for oil companies that you referenced?
Many people claim that tax deductions, such as those allowed for depreciation and research and development of an asset, are subsidies.
The logic is that an entity would otherwise have to pay a certain amount, but for these deductions, which make them subsidies. It’s a little easier to see if there were a corporate flat tax; then any additional exemptions would be a form of special treatment.
What people making the claim in this context miss, of course, is that all companies get this deduction, including solar, wind, hydro, and geothermal corporations.
There’s an argument that the relative (not absolute, though that’s also true) magnitude of the depreciation and R&D deductions is higher for fossil fuel companies because they have to continually find new reserves and so have to continually invest lots of money, which they then get to deduct, as compared to wind and solar which have only initial construction costs. It’s a bad argument, in part because fossil fuel companies are vertically integrated, so they’re in both the production and R&D business, unlike Ivanpah, who did not build their own equipment, and does not continually research new and more efficient panels.
But the argument is there, it has some merit, and it should be understood so that it can be discounted accordingly, not just ignored outright.
It may have been poor maintenance that sparked the fires, but it was the incompetence of the state that made them so destructive. But someone has to pay and the politicians don’t think it should be them.
Now, as part of the fallout, a lot of these other uneconomical projects may go bankrupt. Maybe, instead of putting money into uneconomical infrastructure, the state should have combined rational forestry management policy with investment in maintenance of transmission lines.
Californians are getting what they deserve.
If only the government would keep the f*ck out of the means of energy production, everything would be simpler and more efficient.
If only all governments would keep out of what they don’t understand (i.e. virtually everything), everything would be simpler and more efficient!
$34 Billion, do you know how much good we could do with $34 billion? The waste and misallocation of resources regarding this issue are astronomical. Here are some far better ideas on how to send this money.
https://youtu.be/i0aUIzH6mto
https://youtu.be/fQw_FB_9q4Y
To me, the best way to address this issue is to put everything in terms of opportunity cost. We can either fight climate change or build roads, bridges, hospitals, schools etc etc.
But since we have very little to do with ‘climate change’ we can’t ‘fight’ it either.
Buy three Ford class carriers, or 10, TEN! Queen Elizabeth class carriers…….decisions, decisions…..
Did it really take a Texas Public Policy Foundation study to see that subsidies distort markets, cost taxpayers and benefit only a few large corporations? Why would this be anything other than obvious? This scam has been running for almost 30 years and now has unwanted visibility. I can hardly wait for single payer healthcare.
This will be interesting. Bankruptcy courts have considerably authority, including revising or canceling pension plans.
I believe FERC would have to be represented in court by the Solicitor General, so the Trump administration could simply decline to contest the bankruptcy court’s decision and that would be the end of it.
The real costs of renewables coming home to roast.
Link below worth reading in relation to head post. 40,000 German jobs vulnerable. Green was once the great new employment growth area.
It would be interesting to know what the total government, States and Federal, subsidies total each year in the USA to the green energy industry. I am surprised that Trump, the head US negotiator, has not challenged these subsidies on behalf of the tax payer as being a really bad deal in homage to the CO2.
Does anyone know the total subsidies to all green energy, farming and industry in the USA. The head negotiator should broaden his scope from not good for America, to include not good for the US taxpayer.
I wonder if the court ruling and outcome will soften Bloomberg,s approach to green energy.
https://notrickszone.com/2019/06/11/wind-energy-woes-german-expansion-collapses-to-near-zero-2019-threatens-to-be-a-disaster/
It’s subsidies all the way down.
The bad news just keeps on coming for the ‘renewable’ energy subsidy scammers.
I know I have beaten this horse to death and it’s almost a shame that I still have to do this but where is the cheapest energy on the planet now? I mean, the renewable acolytes never tire telling us that their energy is cheaper than anything else and that this is the only power production capacity that should ever be installed again. But if they are so very cheap, how comes that PG&E needs to unload first of all those expensive renewable contracts? If renewable would really be as cheap as their proponents claim, PG&E should try to unload all other contracts and keep all the renewable contracts. But that’s not what they do. Do me a favor – next time one of those renewable types talks about cheap renewable energy, rub this article under his nose. Know what – I know just how they will react. That’s just one more mean spirited ploy by the fossil industry. But here, it’s renewables that look like fossils.
“the renewable acolytes never tire telling us that their energy is cheaper than anything else and that this is the only power production capacity that should ever be installed again. But if they are so very cheap, how comes …”
… most developing countries are investing in coal power plants instead? Surely they’ve done the cost studies and wouldn’t overspend their limited resources.
We seem to live in strange times.
Companies providing essential services like energy supply and air transport are kept afloat by the bankruptcy courts. Yet it was court-enforced decisions of government that destroyed the ability of these companies to make profits.
If California is the trend setter it has been the last 40-50 years for renewables, this would be the beginning of the end for the massively subsidized renewable energy market, at least in the USA South West. It is coming anyway, as evidenced by the messaging that these subsidies will be phased out within 10 years which would mean not being able to replace themselves due to horrible economic returns if not subsidized. The uselessness of wind power when their effective limited life span for many of these projects also expires if it isn’t economical to be able to pay for their own eventual replacement.
This bankruptcy should accelerate that by allowing the renegotiation of the original contract to a lower price which would in large part cause any newer projects to accept the lower price that has just been agreed to. Investors like Warren Buffet would bail on putting any new money in if the wholesale price is reset especially knowing the subsidy is coming off eventually. Which is good, especially for wind since it is junk electricity anyway, and just causes a lot of disruption on the grid every time the wind gusts. Priority access to the grid for this garbage power and the premium price it commands should collapse, and hopefully sets the real price paid for a non dispatchable junk power product. Same for solar, while a bit more predictable for its energy profile, is still a junk power that can’t lead the utility like the synchronized spinning reserve that it requires for its own generation. Maybe the world is now unfolding like it should, and starting in California where much of this renewable nonsense started anyway. This will be a real chill over the renewable energy market, and a deserving one at that. As someone else commented upthread, couldn’t have happened to a nicer bunch of people. But it’s a shame it has to take a bankrupt private utility to do so, which was bankrupted on a fake claim of CAGW causing the fires in the first place.
NextEra Energy NYSE: NEE.
$201.98/shr, $98 Billion market cap. Down ~1% today. Expect further downward pressure due to this ruling.
AQR Finance is a hedge fund holding about $500million in stock on NEE.
Harvesting tax dollars, not wind.
institutional investors own 79% of NextEra Energy.
Far past time to end the PTC.
Per wiki:
NextEra Energy, Inc. is a Fortune 200 energy company with about 45,900 megawatts of generating capacity, revenues of over $17 billion in 2017, and about 14,000 employees throughout the United States and Canada.
“Big Wind” indeed.
Renewable energy as the sole means of electricity will be a disaster. Stop this insanity!!
Does this mean we get the tax credits/revenue back in the Treasury for social spending needs?
Question: Lets say that PG&E do pay the $42 billion fine, or some part thereof.
Who gets that money? is it:
1. The government.
2. The people who lost family members.
3. The people who suffered material loss due to the fire.
4. The lawyers who filed suit.
The government.
Only the government can issue fines, all other need judgements.
And since the BK will discharge any liability for the fire, that’s not going to happen.
Legal judgements ate generally not dischargeable, although if a plaintiff filed bankruptcy then the lawsuit is an asset that the bankruptcy court can take to help make the creditors whole.
One wonders if the Greens organization, whatever that is, is Communist, or Capitalistic . Perhaps a bit of both.
MJE VK5ELL
When all these wind farms reach EOL what’s going to cost to remove them and who’s going to pay for it? Did the original permits include a removal performance bond?
It won’t be EOL that necessarily does them in, if the owning companies fail to ‘pay up’ for normal preventative maintenance, or won’t ‘pay up’ for repair work their end of “life” will arrive just that much sooner!
Which green shoot firms are most exposed to PG&E renegotiating their contracts?
When I heard that lawyers were planning to sue PG&E into bankruptcy, I expected this to happen.
PG&E could not remove the fuel build up under their power lines because of misguided environmental regulations. This is a California problem.
Because of the fuel buildup, there were fires. Lawyers decided to sue PG&E rather than the environmental groups which are responsible for preventing the clearing fuel buildup.
The lawsuits forced PG&E into bankruptcy and all contracts they held prior to bankruptcy are subject to renegotiation. This includes the rooftop solar contracts which have PG&E paying for PV power which they then have pay the grid to take during the peak PV production times during the early afternoon. Then PG&E has to pay for more ex-Cali grid power in the evening when usage is highest and PV production is very low.
The renegotiation of PG&E”s renewables contracts could blow the lid off of the renewables fallacy. A system that overproduces power 6 hours before peak usage is not sustainable. This unsustainability is made even worse when the system produces almost no power during peak usage.
The beneficiaries of this $billion dollar tax payer heist , including bought California politicians are running out of runway . It’s about time . How much $$ did the newspaper owners and writers get for pumping the tires of the scam ?
Amber
Well, Hillary spent over 1 billion dollars last primary season and election losing her coronation to “her” dictator-in-chief position. And EVERY dollar of that went to local press outlets, national press outlets, campaign events that went to local and national press attendees, and for actual political ads in local and national press sales accounts.
Those “renewable ” contracts will be tied up in the courts for a decade .
The crooks who made off with the bribes could care less so someone else will be holding the bag . Taxpayers ….again .