ORIGINAL REPORTING: Utility Bankruptcy In A Time Of Climate Change
Bailout doubt – PG&E faces bankruptcy amid California's 'first climate change-caused emergency'; Stakeholders say few will benefit from bankruptcy, but alternatives have been dubbed "politically too hot to touch."
Herman K. Trabish, Jan. 22, 2019 (Utility Dive)
Editor’s note: PG&E’s bankruptcy has become a way of life in California and the power sector is determined to achieve state goals despite it.
As Pacific Gas and Electric (PG&E), California's biggest electricity provider, filed for bankruptcy at the end of January, the state and the utility laid the groundwork for better options. PG&E wants lawmakers to authorize a financial tool called securitization to raise capital. But many equate that to a bailout for a company they say should not be saved without complete corporate restructuring, considering its safety record. PG&E's preliminary Jan. 14 Securities and Exchange Commission (SEC) filing said bankruptcy is "the only viable option" after its stock value and credit rating plummeted. Settlement talks among the utility, wildfire victims, insurers, ratepayer advocates, power sector stakeholders and lawmakers, including just-inaugurated Gov. Gavin Newsom, were to no avail. PG&E's controversial history of safety violations and the rapidly rising costs from the past two years of wildfires made bankruptcy unavoidable, stakeholders told Utility Dive.
The bankruptcy process, now underway for nearly six months, is unlikely to greatly benefit any of the involved parties. Bankruptcy makes victims' claims subordinate to other utility obligations and is a gamble for PG&E because a bankruptcy court could judge the company harshly, McCallum Group President Patrick McCallum told Utility Dive. McCallum, who barely survived the 2017 Wine Country wildfire, leads a coalition of victims' groups. It is also likely to fail to address the bigger challenge of climate change, Center for Energy Efficiency and Renewable Technologies Executive Director V. John White told Utility Dive. "The wildfire threat has to be treated as California's first climate change-caused emergency, or losses on this scale will keep happening, quite apart from what happens to PG&E." The 2018 Camp Fire was the deadliest and most destructive in California history. It destroyed 18,661 structures and killed 86 people. When it started on Nov. 8, PG&E's stock price was $47.80. A day after the utility filed for bankruptcy, it was $6.19… click here for more