The saga of PG&E’s bankruptcy has already seen its share of twists and turns, with downgrades of solar projects and filings and counter filings at the Federal Energy Regulatory Commission (FERC).
However, until today PG&E hadn’t even filed, but merely warned that it would. That was rectified this morning, when the California utility officially filed voluntary petitions under Chapter 11.
Well, sort of voluntary. Despite being cleared of fault in the 2017 Tubbs Fire, PG&E is still potentially on the hook for an untold volume of damages for other fires in Northern California.
PG&E is currently seeking bankruptcy court approval of $5.5 billion in debtor-in-possession financing, which it says will allow it to stay afloat during the Chapter 11 process. But it is also seeking for the bankruptcy court to assert its authority over the power contracts that it has signed.
This comes only days after FERC issued an order stating that while the case law was unclear, it has “concurrent jurisdiction” with the bankruptcy court over the power contracts, via its authority under the Federal Power Act. Per PG&E’s filing:
This adversary proceeding arises out of the Debtors’ request that this Court: (i) issue a declaratory judgment confirming its exclusive jurisdiction over the Debtors’ rights to reject certain executory power purchase agreements or other FERC-regulated agreements (collectively “PPAs”) under section 365 of title 11 of the United States Code (the “Bankruptcy Code”), and further declaring that FERC does not have “concurrent” jurisdiction, or any jurisdiction, over the determination of whether the Debtors’ rejection of any of their PPAs should be authorized, and that the Debtors do not need to obtain approval from FERC to reject any of their PPAs;
PG&E is also asking the bankruptcy court to issue an “automatic stay” on the proceedings at FERC. Per the document, PG&E is asking the court to:
issue an order enforcing the automatic stay as to the FERC Proceedings, any entity’s attempt to enforce the FERC Order, and any action by FERC, or any other entity, that would attempt to divest or otherwise nullify or impede this Court’s exclusive authority to approve or deny the Debtors’ requests to assume or reject executory contracts
PG&E says that it has not yet made any decisions regarding whether to assume or reject any power contracts in the Chapter 11 case, but has made it clear that it wants to retain the ability to. The utility currently holds multiple gigawatts of wind and solar contracts, including those with some of the largest power companies in the nation, such as Berkshire Hathaway and NextEra. Additionally, developers and asset owners including D.E. Shaw, EDF Renewables and First Solar have filed to intervene in the case.
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