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PG&E – Near the Finish Line?

image credit: Napa Valley Register

As I’m starting to write this paper (Feb 2), proposals and counter-proposals have been flying back and forth between PG&E and Governor Newsom. Late on Friday PG&E filed a new Plan of Reorganization It appears that PG&E and the Governor are getting much closer to a resolution that will allow the former to emerge from bankruptcy (or not).

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John Benson's picture

Thank John for the Post!

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Matt Chester's picture
Matt Chester on Feb 4, 2020 2:23 pm GMT

Thanks for the updates, John-- definitely helps to have someone with your expertise dig through the legalese for us!

It appears that PG&E and the Governor are getting much closer to a resolution that will allow the former to emerge from bankruptcy. PG&E has made an additional proposal back to the Governor that will reduce its lending costs (for funds to cover its liabilities resulting from the wildfires) and thus allow it to avoid increasing customer rates.

In terms of these negotiations/back-and-forths, what sort of leverage does PG&E really have? Do they have much standing to push back on what the governor wants?

John Benson's picture
John Benson on Feb 4, 2020 7:24 pm GMT

Thanks for the comment, Matt.

PG&E does have the nuclear option - tie up any attempt to turn it into a public utility for multiple decades it court. Also their (mostly unionized) employees have come out strongly against the public utility option - when Sen Wiener publically announced his proposal there was a big gang of them there creating counter-chaos.

Note the Sen Wiener represents San Francisco, and note the primary thesis of my “New / Old Major Municipal Utility” paper.

-John

Matt Chester's picture
Matt Chester on Feb 4, 2020 10:57 pm GMT

Appreciate the response, John!

For anyone following along, here's the 'New / Old Major Municipal Utility' paper John's referring to: https://www.energycentral.com/c/pip/new-old-major-municipal-utility

Patrick McGarry's picture
Patrick McGarry on Mar 19, 2020 2:51 pm GMT

John-

Thanks for the post. Extremely concise and to the point.

Do you happen to know of the "game plan" to replace the decaying transmission towers & lines? I read a report that stated it could take PG&E decades to complete the repairs. As I understand, much of the existing infrastructure is 60 to 70 years old and past replacement milestones.

Thanks

Patrick McGarry

John Benson's picture
John Benson on Mar 20, 2020 2:07 am GMT

Hi Patrick:

Although this would need to start with a detailed project plan (several phases and interactions with the CPUC and other stake-holders), then an RFP followed by an RFQ, I believe the CPUC would allow these expenses to be charged to the rate-payers.

PG&E has done similar major work in their distribution system - see the link to an earlier series below: Note that this is a two part series (both links below), but the PG&E Project is described near the end of of the first part -  the second part mainly deals with metrics and applications.

https://www.energycentral.com/c/pip/squirrel-no-good-%E2%80%93-part-1

https://www.energycentral.com/c/pip/squirrel-no-good-%E2%80%93-part-2

-John

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