Goldman Sachs Becomes Solar Supplier to California CCAs as Its Acquisition Spree Continues

Canadian Solar subsidiary Recurrent Energy has sold its remaining equity stake in the 100-megawatt Mustang solar project, a key resource for California’s flagship community-choice aggregators, to the Renewable Power Group of Goldman Sachs Asset Management.

Thursday’s deal completes Recurrent’s sale of equity stakes in the 973 megawatts of solar it brought online in 2016 in California. Financial terms were not disclosed, but Canadian Solar will report sales revenue from Mustang in the second quarter of 2019.

The deal, approved by federal regulators in late March, will include the sale of Recurrent’s Class B ownership interests in the 30-megawatt Mustang, 40-megawatt Mustang 3 and 30-megawatt Mustang 4 facilities, while passive tax equity investors will continue to own all noncontrolling Class A membership interests, according to S&P Global Market Intelligence.

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San Francisco eyes PG&E utility’s grid assets for ‘total power independence’

As Pacific Gas and Electric Co. and its parent company PG&E Corp. struggle to formulate a plan of reorganization in their joint Chapter 11 bankruptcy proceeding, their hometown of San Francisco is advancing a plan of escape.

San Francisco’s exploration of full independence from the utility through the possible purchase of its electric distribution assets serving the city is entering the next phase, according to a preliminary report released May 13.

“While any sort of acquisition of [Pacific Gas and Electric, or PG&E] property would be a lengthy process, the preliminary report shows that public ownership of San Francisco’s electric grid has the potential for significant long-term benefits relative to investment costs and risks,” Harlan Kelly, general manager of the San Francisco Public Utilities Commission, said in a letter to Mayor London Breed accompanying the report.

“Initial research shows total power independence would make meeting the city’s goal of being 100% carbon neutral by 2030 much less difficult,” Kelly added, while also leading to “more stable rates and more transparency for customers.”

The report follows a March 14 letter from Breed and City Attorney Dennis Herrera to top executives at PG&E Corp. underscoring the city’s “seriousness” of a possible takeover offer for PG&E power lines that serve the city and county of San Francisco, where the utility is based.

The San Francisco Public Utilities Commission already supplies power to the city’s municipal operations from hydroelectric power plants within its Hetch Hetchy Power System, as well as solar facilities on city property, and also procures power for retail electric customers through CleanPowerSF, a local power agency set up under California’s community choice aggregation model. But San Francisco still relies on PG&E to deliver the vast majority of power derived from Hetch Hetchy and CleanPowerSF.

SCENARIOS

Scenarios explored in the report game out three options for San Francisco’s future relationship with the embattled utility, ranging from a continuation of the status quo to San Francisco’s “full independence from PG&E.” Under the latter, the public utility would purchase PG&E’s physical assets in and near San Francisco for a roughly estimated “few billion dollars” to serve some 400,000 accounts with a collective peak power demand of 1,000 MW, according to the preliminary report. The asset purchase would be funded by revenue bonds.

Under the full independence model, San Francisco would also offer employment to PG&E’s union and other employees that currently manage the local grid, the report said.

“The next phase of the analysis will go deeper,” Kelly added in his letter to the mayor, by exploring the impacts of acquiring PG&E’s distribution assets on affordability, safety, reliability, workforce, environmental justice, neighborhood revitalization and community engagement. “This analysis will also include the impact of San Francisco’s departure from the larger PG&E system on other ratepayers across California,” he said.

— Garrett Hering, S&P Global Market Intelligence, newsdesk@spglobal.com

— Edited by Pankti Mehta, newsdesk@spglobal.com

 

San Francisco eyes PG&E utility’s grid assets for ‘total power independence’, by Garrett Hering, S&P Global, May 14, 2019.

Power companies want to dodge clean energy goals by counting in old dams

California power companies have an appealing but flawed argument with the state’s goal of 100% clean energy by 2045. They want existing dams that churn out carbon-free electricity to count toward that mark, making it easier and cheaper to meet their climate-friendly obligations.

A pending bill, SB386, sounds narrow and focused, but it’s not. It would allow the Modesto irrigation district that operates Don Pedro Dam astride the Tuolumne River to total the cranked out electricity toward its renewable energy quota. That exemption would mean less need to buy juice from solar, wind and other green sources and save money for ratepayers.

It’s a pitch that power companies have made for years but without success. Why? Because such an exemption would hamstring the growth of renewables in a state with the nation’s dirtiest air. Green sources need to expand, not stall out. A loophole for dam operators will chip away at the overall goal. Regulations also soften the financial pressure on power firms by limiting the expense of buying clean energy.

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CalCCA Statement on Moody’s Assigning Investment-Grade Credit Rating to PCE

The California Community Choice Association (CalCCA) congratulates Peninsula Clean Energy (PCE) onobtaining a Baa2 Issuer Rating from Moody’s Investors Service.

PCE’s achievement of an investmentgrade credit rating speaks to the inherent strengths of the CCA business model in California, and the leadership role CCAs are playing in the state’s efforts to lower greenhouse gas emissions and transition to cleaner energy resources,” said Beth Vaughan, executive director of CalCCA.

The benefits of a credit rating include the potential to negotiate lower energy prices and improved creditterms for future power purchasing needs, PCE noted in a May 6 news release. “This credit rating assures regulators and legislators that PCE’s financial strength is sound and, in light of PG&E’s bankruptcy filing, the CCA business model provides a stable framework for serving customers and advancing the state’s low carbon energy future,” PCE said.

PCE provides Community Choice Aggregation (CCA) service to all cities and unincorporated areas in San Mateo County and is the second aggregator in California to be assigned a credit rating by Moody’s in the past year. MCE, which serves 34 communities across four Bay Area counties (Napa, Marin, Contra Costa, and Solano), obtained a Baa2 Issuer Rating in May 2018. Moody’s Issuer Rating is an independent assessment of the ability of entities to honor senior unsecured financial obligations and contracts.

###

About CalCCA
Launched in 2016, the California Community Choice Association (CalCCA) represents California’s community choice electricity providers before the state Legislature and at regulatory agencies, advocating for a level playing field and opposing policies that unfairly discriminate against CCAs and their customers. There are currently 19 operational CCA programs in California serving approximately 10 million customers.

For more information about CalCCA visit www.cal-cca.org.

San Francisco May Make PG&E a Multibillion-Dollar Offer in Weeks

(Bloomberg) — San Francisco may make a multibillion-dollar bid within months for some assets owned by California power giant PG&E Corp.

Mayor London Breed told the utility owner in March that the city may submit a formal offer for its electric distribution system in San Francisco “within the coming months” if the acquisition proves feasible, the San Francisco Public Utilities Commission said in the report Monday. The agency estimated that the fair market value of the assets is “in the range of a few billion dollars.”

The report takes San Francisco one step closer to an offer that city officials have been talking about since PG&E filed for bankruptcy in January under the weight of an estimated $30 billion in liabilities from wildfires. In light of the Chapter 11 filing, Breed asked the utilities commission to evaluate how the city could ensure its power supplies remained affordable, reliable and in compliance with climate goals.

“This preliminary report demonstrates that public ownership of San Francisco’s electric grid has the potential for significant long‐term benefits,” the agency said, noting that an acquisition would also “eliminate the roadblocks, delays, and costs” that the city faces in working with PG&E.

PG&E shares fell 2 percent to close at $18.23 on Monday after rising to as high as $18.37 on the news. The company said in a statement that it is committed to working with San Francisco, where its roots date back more than a century. “We look forward to reviewing the city’s analysis, and appreciate the city’s open and transparent dialogue on the subject,” PG&E said.

The office of Governor Gavin Newsom didn’t respond to requests for comment. In April, Newsom raised the prospect of a government takeover if the company continued to be “bad actors.”

Breed said in a statement that it’s “in the long-term interest of our city to continue down this path,” describing it as a “unique opportunity.”

The utilities commission would sell revenue bonds to buy the assets, pointing in the report to past successful offerings backed by its water systems. While the necessary capital “would be significant,” the report said it’s comparable to the city’s $4.8 billion overhaul of its water system. Bonds backed by the utility’s power revenue are rated AA, third highest, by S&P Global Ratings.

Working with PG&E in the past has led to delays and cost overruns for city projects, the report showed. For example, PG&E once tried to require the city to install electrical equipment for a transit restroom that cost ten times more than the bathroom itself.

Overall, the report estimates that about $360 million flows annually from San Francisco to PG&E for power delivery services and other public purpose programs.

To contact the reporters on this story: Romy Varghese in San Francisco at rvarghese8@bloomberg.net;David R. Baker in San Francisco at dbaker116@bloomberg.net;Mark Chediak in San Francisco at mchediak@bloomberg.net

To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Joe Ryan, Will Wade

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

San Francisco May Make PG&E a Multibillion-Dollar Offer in Weeks, by Romy Varghese, David R. Baker and Mark Chediak, Bloomberg, May 14, 2019.

Storage Star to Break Ground on New Smart-tech, Solar-Powered Storage Facility in Napa

NAPA, Calif.–(BUSINESS WIRE)–May 8, 2019–Storage Star announced today that a brand new, state-of-the-art, smart technology self-storage facility, powered by 100% renewable energy, is set to break ground on Friday, May 10, 2019. The 10:00 a.m. groundbreaking will take place at the new site at 300 Devlin Rd. in Napa, launching the region’s first new storage facility in 20 years.

The new Storage Star facility – owned by Sacramento and Napa-based FollettUSA / Storage Star, constructed by Roseville-based Thomastown Builders, and conveniently located next to the Napa Regional Airport – is set to be the North Bay’s most high-tech and secure self-storage facility with the latest smart technology advancements, making it the premier storage offering in the North Bay.

With features unrivaled in the Napa market such as unit monitoring and unlocking from your smartphone, 24/7 access, climate-control and top-grade surveillance, Storage Star’s new facility looks to improve the storage offering in a growing region.

Matt Garibaldi, President of FollettUSA and Storage Star said, “Napa Valley is a vibrant, growing community that deserves modern, high quality self-storage at a reasonable price. Our new facility – Storage Star Napa Airport – will provide the most technologically advanced security features available in the market today. When combined with our solar installation, we believe our new facility provides an excellent example of quality and stewardship that new real estate developments should bring to the Valley. We are fortunate to partner with such a talented construction company Thomastown Builders, who has led the planning and development of this world class project.”

In addition to making a commitment to security and convenience, Storage Star has partnered with Marin Clean Energy to provide 100% clean solar power from a rooftop, nearly 1-megawatt, solar installation.

With the continued construction of apartments and homes in the Napa and American Canyon area, Storage Star is meeting the increased demand for self-storage in a growing market. The facility is scheduled to break ground on May 10, 2019 and open July 1, 2020 with 618 state-of-the-art units providing ideal secure space for small businesses, families, and the community.

Storage Star’s new Napa location will be the region’s top storage option for customers of any need with units ranging in size from 25ft 2 to 900ft 2 offered at competitive rates.

About Storage Star

Storage Star is a leading owner and operator of self-storage assets in the Western U.S., Rocky Mountain Region, and Texas currently operating 20 self-storage properties with more than 12,000 units and 1.6 million rentable square feet. Storage Star are a vibrant, growing company with ambitions to be one of the leading self-storage operators in the United States. For more information please visit our website: www.storagestar.com.

About FollettUSA

FollettUSA is a California-based boutique real estate firm investing in high quality income-producing properties with the goal of generating tax-efficient income, long-term equity capital appreciation, wealth preservation, and estate planning efficiency. Since its founding in 1989, high net worth families and institutional investors have entrusted FollettUSA to develop, acquire, manage and maintain institutional quality residential communities, self-storage facilities, and investment properties for their private portfolios. For more information please visit FollettUSA’s website: www.follettusa.com

About Thomastown Builders Inc.

Thomastown Builders Inc. have been constructing and managing boutique style self-storage facilities across Northern California for 30 years. They are family owned and operated, and headquartered in Roseville, CA. Learn more about Thomastown Builders Inc. at https://www.norcalselfstorages.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190508005677/en/

 

CONTACT: Larry Kamer

lkamer@kamergroup.com

415-290-7240

In New Challenge for California’s Utilities, Rating Agency Warms to Community Aggregators

The community-choice aggregators disrupting California’s electricity market have come a long way in a short time, and the credit rating agencies are taking notice.

Peninsula Clean Energy, which procures electricity for around 300,000 accounts in the San Francisco Bay Area, obtained an investment-grade credit rating this week from Moody’s, along with a stable outlook. It’s the second community-choice aggregator (CCA) to secure such a rating, after Marin Clean Energy did so last year.

With investment-grade ratings in hand, CCAs may be able to negotiate better credit terms and lower energy prices, making them more competitive suppliers of renewable power. The implications for California’s market are potentially big, particularly given the bankruptcy of utility PG&E, whose own credit rating has been lowered to junk territory.

“Right now, we have a better credit rating than the incumbent investor-owned utility [PG&E],” Jan Pepper, CEO of two-year-old Peninsula Clean Energy, said in an interview. “If someone wants to take a risk in doing a deal with us versus them, as far as the credit rating agency is concerned we are more stable financially.”

The ratings are “really positive news for renewables,” said Britta von Oesen, managing director and head of the San Francisco office at CohnReznick Capital.

CohnReznick has worked with CCAs to finance projects with and without credit ratings, von Oesen said. “By achieving an investment-grade credit rating, those financing options will be even more competitive, allowing for additional deployments of renewables and growth of renewable energy offerings to consumers.”

Peninsula Clean Energy’s new rating will give it an immediate boost in its renewable procurements, Pepper said.

The CCA has a contract in place for a 200-megawatt (AC) solar project under construction in California’s Central Valley that’s owned by developer Centaurus Renewable Energy, due online by the end of the year. Another 100-megawatt solar project will follow in 2020.

Meanwhile, “we’ll be finalizing a couple more PPAs in the next few months,” likely for projects in the 100 MW ballpark, Pepper said.

“Since we haven’t finalized those deals yet, we anticipate the credit rating should have a positive impact on the pricing and terms we’ll be getting for those contracts.”

Existential questions

From a relatively slow start after the launch of Marin Clean Energy in 2010, CCAs have rapidly gained momentum in recent years, as more California communities seize responsibility for procuring their own power.

The CCA model sees nonprofits like Peninsula Clean Energy buying or generating renewable power, typically along a more aggressive schedule than the utilities themselves are on. The utilities, meanwhile, are left to operate the grid and collect the bills, paying the CCAs what they are owed for their power.

When it comes to procuring renewables, CCAs have an advantage in lacking expensive legacy power-purchase agreements signed at an earlier stage of the renewables industry’s development. While renewables operators historically may have preferred to sign PPAs with big and well-known utilities, that could change in the wake of PG&E’s bankruptcy.

Views differ on whether CCAs pose an existential threat to California’s big utilities, although CCAs insist the two can coexist.

Regardless, the proliferation of CCAs in the largest U.S. state economy has been remarkable, with 19 programs now in place serving more than 10 million customers — and many more in the pipeline. The model is now spreading in Southern California, where it was slower to take off than in counties around San Francisco.

“Over the past two to three years, CCAs have positioned themselves as the de facto energy buyers for California,” said Colin Smith, senior analyst for U.S. utility solar at Wood Mackenzie Power & Renewables.

CCAs are already having a significant impact in the country’s biggest solar market, Smith said, “and we expect a lot more in the future.”

California CCAs are also making waves in the wind market, including for the growing list of out-of-state projects looking to sell into California via new transmission lines. Last year Pattern Development signed 15-year PPAs with Silicon Valley Clean Energy and Monterey Bay Community Power for its Duran Mesa wind project, set to enter construction this year in New Mexico.

Tip of the spear?

The question is whether more CCAs — like the recently launched East Bay Community Energy, based in Oakland and already with more than half a million accounts — can follow in obtaining an investment-grade credit rating.

Moody’s cited a number of factors specific to Peninsula Clean Energy in announcing its Baaa2 rating, including the CCA’s “conservative management strategy” and its business-minded board of directors.

As of March 2019, Peninsula Clean Energy had unrestricted cash of $108 million and steady internal cash flow generation.

“From the very beginning, we’ve been very conservative in our financial policies,” Pepper said. “Before rolling out any other programs, anything beyond the basic goal of providing electricity, we wanted to make sure we were financially stable, and put in place policies to ensure we had sufficient funds to weather ups and downs in the market.”

Much of Moody’s decision on Peninsula Clean Energy would also seem to apply to other CCAs as well.

The ratings agency notes the “inherent strengths of the California CCA model,” which is based on state legislation, and the fact that the court overseeing PG&E’s bankruptcy proceedings has acknowledged that the money the utility collects for Peninsula Clean Energy is “not a part of PG&E’s estate.”

Beth Vaughan, executive director of the California Community Choice Association trade group, said in an email that other CCAs are already pursuing credit ratings “and we expect more will do so in the future.”

“While we cannot speculate on future determinations by credit rating agencies, the assessments to date by Moody’s present a bullish view of the CCA business model in California,” Vaughan said.

Pepper, too, thinks more credit ratings are coming.

“As other CCAs start to have a couple of years of operating history like we do, I see no reason why they won’t be able to get a credit rating,” she said.

 

In New Challenge for California’s Utilities, Rating Agency Warms to Community Aggregators, by Karl-Erik Stromsta, Greentech Media, May 8, 2019.

CalCCA Statement on Moody’s Assigning Investment-Grade Credit Rating to PCE

The California Community Choice Association (CalCCA) congratulates Peninsula Clean Energy (PCE) on obtaining a Baa2 Issuer Rating from Moody’s Investors Service.

“PCE’s achievement of an investment-grade credit rating speaks to the inherent strengths of the CCA business model in California, and the leadership role CCAs are playing in the state’s efforts to lower greenhouse gas emissions and transition to cleaner energy resources,” said Beth Vaughan, executive director of CalCCA.

The benefits of a credit rating include the potential to negotiate lower energy prices and improved credit terms for future power purchasing needs, PCE noted in a May 6 news release. “This credit rating assures regulators and legislators that PCE’s financial strength is sound and, in light of PG&E’s bankruptcy filing, the CCA business model provides a stable framework for serving customers and advancing the state’s low carbon energy future,” PCE said.

PCE provides Community Choice Aggregation (CCA) service to all cities and unincorporated areas in San Mateo County and is the second aggregator in California to be assigned a credit rating by Moody’s in the past year. MCE, which serves 34 communities across four Bay Area counties (Napa, Marin, Contra Costa, and Solano), obtained a Baa2 Issuer Rating in May 2018. Moody’s Issuer Rating is an independent assessment of the ability of entities to honor senior unsecured financial obligations and contracts.

###

About CalCCA
Launched in 2016, the California Community Choice Association (CalCCA) represents California’s community choice electricity providers before the state Legislature and at regulatory agencies, advocating for a level playing field and opposing policies that unfairly discriminate against CCAs and their customers. There are currently 19 operational CCA programs in California serving approximately 10 million customers.

For more information about CalCCA visit www.cal-cca.org.

Paradise Lost: Reimagining the California Dream With Community Microgrids

The firestorm disaster that wiped out an entire town last year has made it clear that the paradise that once was California is in serious jeopardy. However, the horrific Camp Fire in the community of Paradise presents an opportunity to reimagine the California dream as a highly resilient and sustainable community system.

In fact, we can go beyond imagining. We have the technology now to rebuild with renewables-driven community microgrids that incorporate electric vehicles and efficient all-electric buildings.

Most state and local governments are currently operating under a reactive scenario, responding to crises of lost homes, communities, human lives and livelihoods. Moving forward, we need a coordinated plan for rebuilding with resilience in these communities, as the North Bay Community Resilience Initiative is helping to develop for Napa and Sonoma Counties in California. This should be a mandate for all communities as we look ahead to an uncertain climate future.

We can create a secure energy paradigm based on community microgrids even more cost-effectively than rebuilding existing outdated infrastructure. That’s especially true when we consider the long-term resilience and greenhouse gas reduction benefits of a modern energy system.

For some time now, microgrids have been advancing technologically, while the cost of the associated technology has been dropping dramatically. In the extreme-weather reality we now face, we all can benefit from this revolutionary technology.

The Clean Coalition has already designed a number of community microgrids and is staging others to bring resilience to disaster-prone areas. These include the Long Island community microgrid, the Montecito community microgrid, and the Goleta Load Pocket community microgrid. These systems are designed to provide indefinite renewables-driven backup power to critical facilities, and they also provide a standard methodology that can be replicated in any community.

When mobility is part of the equation, we’re looking at a real game-changer.

How EVs support the community microgrid vision

A fleet of 20 EVs carries enough energy to power 100 high-efficiency all-electric homes for an entire day. One of today’s high-range EVs can provide an efficient home with emergency power for over a week, and capacities are increasing while costs decrease.

Mitsubishi recently announced its new Dendo Drive House, a platform that combines solar-plus-storage and bidirectional EV charging with the company’s Outlander plug-in hybrid. The system allows for generating, storing and sharing energy between the Outlander and the home.

Volkswagen is going further with its plans to “become a power supplier”; its vehicle-to-building energy technology allows vehicles to not just power buildings but also send energy through those buildings to the grid.

The rapid deployment of EVs by Volkswagen and others will put thousands of gigawatts of mobile energy storage on the roads globally in the near future. These mobile assets can be used to help power our cities and towns.

Imagine a town where any type of EV can easily be ordered and shared for use at any time. Those vehicles can also be powering the town through the night. For those who choose to own a vehicle, that ownership includes owning part of the community’s energy infrastructure, or using that energy privately for their homes and businesses.

Who will own the remaining mobile energy assets to balance the system? The local utility or another load-serving entity. An LSE could lease a fleet of EVs to residents who choose not to own a vehicle, probably at about the cost of a monthly energy bill.

The LSE could use those EVs as assets for storing solar, wind and hydro energy produced locally, thereby providing power through the night, and could use those same EVs to balance energy on the local grid. Some stationary-site and community-level storage assets would also be integrated, to avoid relying entirely on the mobile assets.

Mobile energy would greatly reduce the need for traditional infrastructure costs. The ideal energy scenario is likely to be a hybrid approach, with some traditional wires-based infrastructure and both stationary and mobile energy storage.

Mobile energy assets provide four important benefits:

  1. They do not require transmission wires.
  2. The assets can be moved out of harm’s way in the event of a catastrophic event and immediately brought back afterward for arbitrage.
  3. When combined with solar, mobile energy assets reduce the need for traditional energy infrastructure development.
  4. They allow a freedom similar to that provided by mobile phones. Just as you can now take your mobile phone anywhere, soon you will also be able to take your energy anywhere to power anything: your home, your cabin in the woods or your business.

Rebuilding with resilience

Buildings are also an important part of the equation. Most building codes were not conceived with the high-fire-danger climate we are currently experiencing. Therefore, new standards need to be created.

A few simple measures can provide resilience, efficiency, safety and security to our built environments:

  1. Non-vented attics and crawl spaces. A properly located and designed air-sealed thermal and moisture barrier for attics does not require venting. Move that barrier to the outermost limits of the envelope, and you’ve dealt with the No. 1 source of house fires in wildfire situations.
  2. Air sealing and heat recovery ventilators. Air sealing can be simple and cost-effective, with costs offset by savings over the life of the (superior and longer-lasting) structure. HRVs filter the interior air, which results in vastly superior indoor air quality and greater energy efficiency.
  3. Exterior mineral-wool fiber insulation under fireproof siding. Mineral-wool fiber does not burn. It creates a fire barrier on the exterior of a building that can add hours of fire resistance, while greatly enhancing energy efficiency and lowering energy costs — thereby paying for itself quickly.
  4. Tempered glass, air-sealed windows. These measures make a structure more fire-resistant and boost energy efficiency and healthy indoor air quality, allowing people to more safely shelter in place during disasters if needed.

Many of these elements were incorporated in the first Advanced Energy Rebuild in Santa Rosa, California, after that area’s devastating 2017 Tubbs Fire — an example that illustrates how rebuilding for resilience can be surprisingly cost-effective.

***

John Sarter is program manager for the Clean Coalition’s North Bay Community Resilience Initiative.

 

Paradise Lost: Reimagining the California Dream With Community Microgrids, by John Sarter, Greentech Media, May 6, 2019.

PG&E unable to strike deal over renewable power contracts: court documents

(Reuters) – PG&E Corp was unable to reach a deal with NextEra Energy Inc and other companies with which it has billions of dollars in power contracts in a jurisdictional dispute over the bankrupt utility’s ability to walk away from or amend those agreements, according to court documents.

The matter will now be decided by the judge overseeing PG&E’s bankruptcy “in the coming weeks,” according to the documents filed in U.S. Bankruptcy Court on Friday.

At issue is whether the bankruptcy court or the Federal Energy Regulatory Commission has jurisdiction over the power purchase contracts, which are worth up to $42 billion.

San Francisco-based PG&E wants the matter resolved in bankruptcy court, while NextEra and others want FERC involved. FERC has said it has “concurrent jurisdiction” with the bankruptcy court in such matters.

The contracts have emerged as one of the most contentious issues in PG&E’s bankruptcy, which the company launched in January in the face of tens of billions of dollars in potential liability stemming from wildfires in California in recent years that may be traced to its equipment.

The question of what will happen to the power contracts is critical for California’s goal to source 60% of its power from sources of renewable energy by 2030. Most of the power contracts in question are for solar or wind resources to fulfill the state mandate.

“PG&E recognizes its important role in supporting the state’s commitment to clean energy initiatives and remains committed to continuing to help California achieve its bold clean energy goals,” the company said in an emailed statement.

“We appreciate the concerns from stakeholders across the state concerning the impact that Chapter 11 filing could have on the state’s clean energy progress. PG&E has made no decisions as to whether to assume or reject contracts as part of filing for Chapter 11.”

Officials from NextEra were not immediately available for comment.Last month, U.S. Bankruptcy Judge Dennis Montali urged the companies and PG&E to try to reach an agreement by a May 3 deadline. In the court papers made public on Friday, they said they were unable to reach an agreement.

 

PG&E unable to strike deal over renewable power contracts: court documents, by Nichola Groom and Jim Christie, Reuters, May 3, 2019.