PG&E Wildfire Bankruptcy Doubles Down on Environmental Setbacks for the Golden State
In what the Wall Street Journal touted as “(t)he First Climate Change Bankruptcy,” Pacific Gas & Electric (PG&E) filed for federal bankruptcy protection last month after claiming that it faced $30 billion dollars in liability for wildfires that ravaged California over the last several years.
Investigators have determined that the California utility company caused at least 17 of 21 major Northern California wildfires that occurred in 2017, and inquiries into PG&E’s culpability for 2018 fires that killed scores of people and destroyed towns remain ongoing. While the company appears to acknowledge that they bear some responsibility for damages related to the fires, they are also singling out climate change as an additional cause. As support, the company points to rising temperatures and increased drought conditions that are causing longer burning, more intense, and more destructive wildfires.
Pundits are theorizing that as the primary electricity supplier to Northern California, PG&E’s bankruptcy filing will be a major road block in the state’s clean-energy goals that aim for 100 percent of electricity to be powered by renewable or zero-carbon resources by 2045. PG&E has at least $34 billion of renewable energy contracts on its books to date. With the pending bankruptcy, they may be permitted to renegotiate these contracts with electricity suppliers that may hurt solar and wind producers forced to bear lower prices. Further, the company may shelve ongoing clean energy projects that include integration of distributed energy resources and mainstreaming electric vehicle charging capabilities. The utility’s fire preventative efforts to trim back forest overgrowth and to bury power lines may also take a back seat to paying off creditors, leading to more fires and environmental damage. Finally, consumers will likely be forced to bear the costs of increased rates for years. Estimates are that PG&E’s prior 2001 bankruptcy cost each of the utility’s customers $1300 to $1700 over 10 years.
The pressure’s clearly on in Sacramento to balance the needs of fire victims, utility customers, environmental activists, and PG&E shareholders. We’ll be monitoring this bankruptcy as it unfolds.