By Jeff St. John, Greentech Media
If Pacific Gas & Electric goes bankrupt, who gets final say over whether it can renegotiate its old and expensive solar power-purchase agreements — federal regulators or the bankruptcy court?
This multibillion-dollar question has come to the fore as PG&E, overwhelmed by tens of billions of dollars in potential wildfire liabilities, prepares to file for Chapter 11 bankruptcy protection as early as tomorrow.
Last week, PG&E solar provider NextEra asked the Federal Energy Regulatory Commission to use its authority under the Federal Power Act to order the utility not to “abrogate, amend or reject in bankruptcy any of the rates, terms and conditions of its wholesale power-purchase agreements,” including hundreds of megawatts of decade-old solar farms that are selling power at far above today’s market rates. Consolidated Edison, which counts PG&E as an offtaker for nearly one-third of its renewable energy portfolio, also weighed in last week to ask FERC to expedite NextEra’s request.
Late Friday, FERC offered these companies a lifeline, with an order declaring that it has “concurrent jurisdiction” with federal bankruptcy courts over whether utilities in bankruptcy can breach their contracts. But PG&E, even though it hasn’t filed for bankruptcy yet, maintains that a bankruptcy court, not FERC, should decide which PPAs and other power-purchase contracts it can breach and which it can’t.