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Man-made US bushfires caused by PG&E, being sued for $30b: may take down some renewables too

Everyone “knows” fires are caused by climate change, but how many Australians know that when it comes to the huge Californian fires of October 2017 as many as 750 civil suits have been filed against  Pacific Gas & Electric  (PG&E),the 150 year old utility in California? The fire bill is running at around $30 billion dollars. PG&E are facing financial ruin, calling in a Chapter 11, and going broke.

That’s bad news for people filing the claims, but it is also bad news for renewable energy.PG&E are a major holder of some $35 billion dollars in long term green energy contracts many of which are at above market rates. PG&E may not have to pay out those high prices which means the Green industry will be hurt too.

What goes around comes around. Bad science begets bad business. The Green Industry could have cared enough about the environment to speak out about reducing fire risks through managing fuel loads, and the fires would have been less damaging. Instead they were busy putting up windfarms to stop bushfires instead.

Meanwhile their friends are still doing their best to increase fuel loads in order to reduce CO2 (and stop bushfires).

PG&E Bankruptcy Threatens California Wildfire Suits, Green-Power Contracts

California fire investigators have determined that PG&E power lines sparked 18 wildfires in October 2017 that burned nearly 200,000 acres, destroyed 3,256 structures and killed 22 people.

California’s largest utility said Monday it was preparing to file for Chapter 11 protection before the end of the month as it faces more than $30 billion in potential liability costs related to its role in sparking wildfires in recent years. Electricity and natural gas would continue to flow to homes and businesses, PG&E said.

PG&E Corp.’s plan to file for bankruptcy protection has enormous repercussions for everyone from the homeowners suing the utility for California wildfire damages to the companies that furnish it with green energy. — WSJ

If only green energy was actually competitive, they could have just renegotiated with some other buyer.

….some of the long-term contracts PG&E struck to buy electricity from wholesale power providers could be dissolved in a bankruptcy. Many of the contracts to buy power from wind and solar farms are well above current market rates because PG&E was among the first utilities to buy large quantities of green power, when it was far more costly than it is today.

Jan Smutny-Jones, head of the Independent Energy Producers Association, a California trade group that represents power suppliers, said he expects a significant percentage of PG&E’s renewable energy contracts could be torn up because they are expensive. He expressed frustration with California’s response to the crisis. — WSJ

How overpriced were those contracts — $197/MWh?

PG&E is the largest offtaker for Con Ed’s renewable energy portfolio, at about 29 percent of contracts. And the average PPA rate for those projects is about $197 per megawatt-hour, “significantly above market rates for new solar” that are closer to $25-$30 per megawatt-hour, the analysts noted. Other companies that could be impacted include NextEra and NextEra Energy Partners, the analysts wrote. — GreenTechMedia

Too big to fail?

Regulators are going to enormous lengths to stop PG&E from going bankrupt. PG&E serves 16 million people and employs 20,000. The customers may yet get hit with the bill:

2. Will customer bills go up?

Probably, but it’s impossible to say until the bankruptcy process is well underway. And for once, the decision to raise rates won’t rest solely with regulators at the California Public Utilities Commission. Rate increases will be tied to whatever reorganization plan the bankruptcy court judge overseeing the proceeding approves. California passed a law last year allowing PG&E to pass on to ratepayers some of the costs of wildfires for which it had been blamed in 2017, but it’s not clear how the law’s provisions will apply to a company that’s already in bankruptcy. Indeed, some of those provisions were designed to prevent utilities from going bankrupt. — GreenTechMedia

A report from late November mentioned another set of fires:

Then, two weeks ago, another deadly fire — the Camp Fire, which has claimed 79 lives with more than 600 people still missing — broke out in PG&E territory. Two days later, PG&E disclosed that it had experienced a transmission system failure near the time and location of the fire’s origin, indicating it may have been the cause of the blaze. PG&E also disclosed that it had considered de-energizing its power lines that day, but decided not to shut them down despite the risk of high winds and dry conditions.

Shares of PG&E took a nosedive…

h/t A Swiss friend, Pat.

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