PG&E Will File For Bankruptcy. PG&E announced yesterday, behind a wall of barricades, that it would file for chapter 11 protection by the end of the month. In terms of process, the advance notice was required per the legislation that passed last year during the bailout. You can expect PG&E to seek DIP (debtor in possession) financing over the next few weeks and the stock price and corporate bonds to crater. Just yesterday the stock price was down 50%, leaving the company’s valuation under $5billion. PG&E needs a new leader that is more of a restructuring officer than a traditional CEO, but more importantly the customers need a representative at the table on a daily basis as well. While PG&E is a private utility, and this fact is true for most IOUs around the Country, they serve the public as a monopoly under regulator oversight. In bankruptcy and matters that impact the health of the public, like this one, Governor Newsom should appoint a consumer advocate to oversee the restructuring and make recommendations to the Governor, legislature and the CPUC. I don’t know if there is a legal precedent for this but the consumers need to know that the next steps are not simply for the benefit of the DIP lenders or shareholders but the greater good as well.
Does Anything Change, Yet? The short answer is no, not yet. I do expect to see the impact stop some financings in the short term while investment committees try to understand the credit scenarios going forward. My hope is that the CCAs come to Sacramento with a legislative support proposal to back the CCA counterparty risk while also fixing the community solar rules in California. Community solar allows the off taker to be changed in a default scenario, which by definition will always be a partial default of the solar asset since many off takers are sitting side by side. Now is the time for industry to put forth strong proposals and show that clean energy including solar is ready to lead California forward.
My Proposal. I mentioned yesterday that I was asked by a legislator what I would do if I were in a situation to write one rule for solar. My answer was to lock in uncapped net metering away at retail rates without time of use restrictions. If the future of includes one or more EVs in every driveway and monopolies serving as wire companies, then distributed energy needs a simple and efficient way to do its part, which will be a necessary component of 100% renewable energy. Other States have this rule written and should be preserved. Those that do not need to take the leverage provided by monopolies looking for a handout to get back to where we came from.
Crossing the EV Chasm. EVs need mass market SUVs and pickup trucks to really make a dent in american transportation numbers. Like I said last week, An electric Ford Explorer or Chevy pickup would change the game and that can’t happen fast enough.
- Vox: California’s largest utility just declared bankruptcy. Hello, climate change.
- San Jose Mercury News: PG&E bankruptcy Q&A – What does it mean for me?
- Axios: SUVs and trucks will drive the electric vehicle revolution
- Quartz: Solar plus batteries aim to retire natural gas plants in 2019
- Scientific American: Solar Farms Shine a Ray of Hope on Bees and Butterflies
- Renew Economy: Booming solar market triples in 2018, set to deliver “Hazelwood + Liddell” by 2020
- PV-Tech: Astronergy ends manufacturing at former Conergy factory
Opinion
Have a great day!
Yann