Activists demonstrate inside PG&E’s San Francisco headquarters to protest any possible bailouts for the company to cover costs associated with deadly wildfires. Photo: Kevin N. Hume/S.F. Examiner

It’s been a long road for Pacific Gas and Electric, after facing possible murder charges for its role in California’s recent wildfires as well as lawsuits from survivors, the utility has filed for Chapter 11 bankruptcy. As PV Magazine explained, the filing is a financial move that allows PG&E to reorganize its debts, and does not involve liquidation. Along with this, the utility is expected to continue normal operations including supplying power to its customers. As PG&E figures out its plan forward, consumers, wildfire victims, and investors are left with an uncertain future and a likely long legal battle ahead.

The SF Chronicle Editorial Board wrote yesterday that the intervening steps are worth watching. The bankruptcy process has the potential to greatly change the utility’s operations and commitments. Depending on a judge’s rulings, PG&E could be shielded from liability payments to wildfire victims, cancel renewable energy promises vital to clean energy programs or be allowed to raise electric rates. The giant company, California’s largest private utility, might also be chopped into smaller units (or turned into a public utility), a possibility that pleases some consumer groups but angers the labor union representing some 12,000 employees. Another possible scenario is that California’s taxpayers will be forced to bail out the utility to keep power flowing which will raise rates for PG&E’s customers.

Why This Matters: While PG&E has declared bankruptcy before the proceedings for this case may indicate the fate of other utilities in fire-prone states. As climate change increases the likelihood of massive wildfires in Western states, it will become increasingly expensive for utilities to operate. This may spur a big shift to distributed energy, community solar, and rooftop solar plus battery storage as the energy utilities sell to customers becomes too costly.

 

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