PG&E’s bankruptcy could slow California’s fight against climate change – “This is going to put the entire state of California at risk”

Desdemona Despair

By Sammy Roth
15 January 2019

(Los Angeles Times) – Climate change helped fuel the deadly fires that prompted California’s largest power company to announce Monday that it would file for bankruptcy in the face of $30 billion in potential liabilities.

In a grim twist, the bankruptcy of PG&E Corp. could now slow California’s efforts to fight climate change.

The Golden State has dramatically reduced planet-warming emissions from the electricity sector, largely by requiring utilities to increase their use of solar and wind power and fund energy efficiency upgrades for homes and businesses. Lawmakers recently set a target of 100% climate-friendly electricity by 2045.

But those government mandates have depended on PG&E’s Pacific Gas & Electric unit and other utilities being able to invest tens of billions of dollars in clean energy technologies.

PG&E’s ability to keep making those investments could be in serious jeopardy once it files for Chapter 11 bankruptcy protection, some energy experts say. Even before the company said it would file for bankruptcy, the looming threat of wildfire liabilities had decimated its credit rating, which raises the cost of borrowing capital.

The massive Topaz Solar Farm in California’s San Luis Obispo County, an electricity supplier to PG&E owned by Warren Buffett’s Berkshire Hathaway Energy, also saw its credit rating downgraded to junk status last week amid fears the San Francisco-based utility won’t be able to pay its bills in full.

In the short term, PG&E might stop signing renewable energy contracts, although contracting had already slowed in the last few years as customers departed in droves for newly established local energy providers run by city and county governments. In the long term, renewable energy developers and their lenders may hesitate to do business with PG&E — and, potentially, with other California utilities that could also face significant future wildfire costs.

“If we’re having a couple billion dollars a year of fire damage and insurance losses, quite apart from PG&E, this is going to put the entire state of California at risk,” said V. John White, executive director of the Center for Energy Efficiency and Renewable Technologies, a Sacramento-based trade group. [more]

PG&E’s bankruptcy could slow California’s fight against climate change