While officials and residents continue unraveling potential repercussions from Pacific Gas & Electric’s planned bankruptcy, it’s clear the state will play a significant role on the matter and that consumers will likely see impacts, too.
PG&E on Monday announced plans to file for Chapter 11 bankruptcy due to billions of dollars in liability stemming from its role in the cause of California wildfires over the past two years. Stockholders in the company took a massive hit on the news, as the publicly traded utility’s value dropped by more than 50 percent in one day. But consumers could pay a price as well through higher rates, and legislators like Assemblyman Robert Rivas will be busy dealing with the issue for the foreseeable future.
Rivas in an interview with San Benito Live noted how it was a “huge issue” for the Legislature last year before his recent arrival and that the threat of a PG&E bankruptcy had been looming. Rivas said it’s too early in the process to know exactly how it could play out, but the San Benito County representative underscored the importance of ensuring protections for various parties.
“My thoughts and prayers will be with the victims of these wildfires,” Rivas said. “My main concern about this bankruptcy is we have to ensure the final solution, any kind of outcome, any solutions adequately protect the workers, the environment and the ratepayers. But we also have to make sure those being affected are treated fairly.”
He said state legislators must “take every step we can” to prevent future tragedies from occurring. Part of the equation is “remaining steadfast” on addressing impacts from climate change. He plans to sit down with PG&E and colleagues to get caught up on the progress that’s been made at the state level and will study possible solutions.
He noted how PG&E is one of the largest utilities in the nation and serves about 16 million customers.
“Ultimately, it is really discouraging that we are at this point,” Rivas said. “As ratepayers, I think we should all be concerned.”
He acknowledged there has been a lot of speculation on prospective outcomes – such as the state bailing out PG&E or taking over the utility – and said he has to get caught up to speed quickly.
San Juan Bautista City Councilman John Freeman will be in the middle of the issue as well because he’s on the executive board for Monterey Bay Community Power, which is one of 18 community choice aggregators in the state that give consumers a clean-power alternative to PG&E.
“We buy and provide power to customers,” Freeman said, “and the power we provide is carbon-free power.”
Like other officials, Freeman isn’t certain how this might play out but he does expect one consequence for consumers.
“I’m guessing it’s going to be higher prices all the way around,” Freeman said.
Last year, former Gov. Jerry Brown signed legislation that allows the utility to spread some costs of California wildfires, such as the Paradise blaze in 2018 or the Napa fires in 2017, onto consumers.
He believes the state Public Utilities Commission will play a huge role going forward and will have more power on the matter than the bankruptcy court. He also expects the community choice customers will experience the same rate increases as the PG&E users.
“The PUC has the ultimate say in that,” he said. “Their policy is to try and spread it out as much as possible.”
PG&E in a statement released Monday, meanwhile, said the bankruptcy matter won’t affect services.
“During this process, the Company is also committed to continuing to make investments in system safety as it works with regulators, policymakers and other key stakeholders to consider a range of alternatives to provide for the safe delivery of natural gas and electric service for the long-term in an environment that continues to be challenged by climate change,” PG&E said in a statement.
