A few days ago, California utility company, Pacific Gas & Electric (PG&E) filed for bankruptcy protection. The company filed for bankruptcy in order to save itself from the lawsuits that are expected as a result of those awful wildfires in California late last year. Observers believe that those lawsuits could hand PG&E an additional $30 billion in liabilities.
As most of you know, one of the “advantages”, if you will, of filing for bankruptcy, is that the company can restructure and possibly shed some of its debt load or other long-term liabilities.
And this is exactly what PG&E seems to be doing.
PG&E wants the U.S. Bankruptcy Court in San Francisco to rule whether the company must honor $42 billion worth of contracts with about 350 different energy suppliers, mostly solar and wind plants.
$42 BILLION!! That’s a lot of solar panels!
What this might do to the renewables industry, particularly in California, is potentially troubling. Many of the solar and wind suppliers do business solely with PG&E because they are the biggest utility company in the state.
Uh oh. If PG&E backs out of their contracts, guess what’s going to happen to the wind and solar farms?
It’s likely there will be another wave of smaller, less notable, bankruptcies. And, it’s likely that the state of California itself will be in violation of the law. You see, before he left office, Governor Jerry “Moonbeam” Brown signed legislation that that mandated the state run on 100 percent green energy by 2045. It also bumped a previous target of 50 percent by 2030 to 60 percent.
Another reason that PG&E wants to shed its green contracts? It has to PAY surrounding states to take off the power that these green companies produce. Yep. States like Nevada and Arizona are happy to get paid for taking the power that California produces.
Let me put this another way—generating electricity from renewable sources costs more than generating electricity from fossil fuels or nuclear. PG&E was losing money on its green contracts even BEFORE having to file for bankruptcy. Not only was it required to buy the power, but it had to pay people to take the excess.
I don’t know about you, but that doesn’t seem like a sustainable business model to me.