If PG&E determines in bankruptcy that they can cancel the large scale solar and wind power purchase agreements does that mean that the high priced net metering “feed-in tariffs” for small renewable generation are cancelable too?
The CPUC and the people of California must be careful what the wish for. Your high priced electricity will become more so as PG&E’s ability to access capital in the financial markets gets even more expensive.
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Two bankruptcies in 15 years? Doesn’t sound like investor owned utilities are working out that well for the people of California.
You would think that electricity, like water, is something we, as a society, would say should be a zero profit service.
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The use by PG&E and others of devices called automatic reclosers (similar to automated circuit breakers) may be the likely culpret of this fire. Reclosers automatically restart power after the power is tripped off. If conditions on the line seem normal, reclosers can automatically restart power multiple times. If the power lines are in contact with branches or brush, those pulses of electricity can start major fires. The Kilmore East fire that killed 119 people in Australia probably would not have started were it not for a recloser’s three attempts to revive a wind-felled line. Experts testified that the recloser’s attempts delivered 3.4 seconds of 5,000 °C electrical arcing that likely started the fire.
California regulators know about this problem. It's been the culprit in the past, but has not been dealt with effectively with PG&E.
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"The solar energy companies that supply the utility could suffer, which could in turn jeopardize California’s ambitious climate goals."
Or, the oversold benefits of solar in California, which has sent rates skyrocketing and fostered reliance on climate-killing natural gas (the sun, it turns out, doesn't shine at night) might induce legislators to offer PG&E a zero-emissions credit to continue operating their state-of-the-art nuclear facility, Diablo Canyon Power Plant. PG&E has yet to come up with other sources of clean electricity to replace the plant after its scheduled shutdown in 2025 - leading analysts to conclude it would likely be replaced by burning gas, adding 8 million tons of CO2 emissions to California's total.
The company's unexplained insistence on destroying their $11-billion asset could trigger a forced liquidation, under Chapter 11 rules, to help compensate Camp Fire victims. Sale to a third party would offer a ticket to California's lucrative energy market at a bargain-basement price. More importantly, it would keep California's largest point-source of clean electricity open for another 40 years.
Though fossil fuel companies supplying the utility could suffer, environmental groups Californians for Green Nuclear Power, Environmental Progress, and Mothers for Nuclear believe that's maybe not the worst outcome.
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@BobMeinetz Diablo Canyon is hardly "state-of-the-art" - it's 40 years old, the only nuke left in the state, and scheduled to be decommissioned in 2025.
It sits near several earthquake fault lines. One of these—discovered in late 2008—is a mere 2,000 feet from Diablo Canyon's two reactors, and could cause more ground motion during an earthquake than the reactors were designed to withstand.
Despite enforcing seismic regulations in similar situations elsewhere, the Nuclear Regulatory Commission (NRC) hasn't enforced them at Diablo Canyon—exposing Americans to undue risk. The potential consequences of inaction are severe.
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@Mark Tele, how do you know Diablo Canyon isn't state of the art? Do you think nuclear engineers have let the plant run down for the last 40 years; that it's a creaking, rusting, leaky mess? Then you've never toured the plant, considered by the engineers in the nuclear community one of the best operated plants in the country, if not the world.
I have toured the plant. I know several engineers who work there, they are among the most conscientious people I know. They're proud of the work they do at Diablo Canyon, and ashamed of PG&E for deliberately destroying a perfectly functional plant for the chance to profit on sales of natural gas to ratepayers.
Now, about those scary "earthquake fault lines" - there isn't a spot in California which doesn't sit near several earthquake fault lines. The land under Diablo Canyon has been subjected to more seismic study than any parcel in the world, and NRC regulators, in a probabilistic risk assessment, assign the possibility of a seismic event causing damage at the plant "capable of endangering human health" at once every 21,360 reactor years - for both reactors, once every 10,680 years.
Yes, there are very smart people who have already considered seismicity at Diablo Canyon. So if you consider those odds "undue risk", you must be afraid of your own shadow.
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@BobMeinetz very smart people also designed and managed every nuclear plant, and yet we’ve had catastrophic loss of life, health, and property haven’t we. Tell those in Russia or Japan about statistical odds! In fact, if start buying lottery tickets with odds of 1 in 10 or 20 thousand of winning and if I can assume a statistical breach of a nuclear plant in that time period I’d pass and I have no fear of my shadow. It’s called risk adversity! Feel free to expose yourself and your loved ones to your degree of risk assumption, but I’m sure you’ll find yourself in the minority. 40
Years ago when built, there had been no prior “accidents” and the “experts” assured the public the risk/odds were even less, yet.....
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The basic question is ultimately who pays ... higher rates for PG+E customers, taxpayers for possible government bailout, creditors taking " haircuts " on their outstanding loans, power generation suppliers?
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PG&E is a government-protected monopoly. It is no more a “company” than the Postal Service, and it is equally incompetent.
The US Postal Service delivers at a lower cost (same time frame) than private shippers. It’s one of the best deals around, which is why Amazon uses the USPS to deliver.
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@R.B. And the USPS is subsidized by taxpayers as it is unprofitable!!!! Amazon uses USPS because they can take advantage of the subsidized government run operation. Watch the operations at the USPS vs Fedex or UPS and see the difference between productivity and it will quickly become apparent why the USPS needs subsidies!
Solar power? From the article: "PG&E pays Con Edison an average $197 per megawatt-hour for its electricity, compared with the $25 to $30 per megawatt-hour cost of power from new solar plants, the Credit Suisse analysts said."
So, solar power costs PG&E 6 times what other power costs them? I would understand environmental activists' fascination with solar power a lot more if the price of solar was even in the same ballpark as the price of electricity from other sources.
@rcrigazio Six times what NEW solar power costs them, is what the article says. That's what excites people, that solar has become cheap. The problem here is the legacy costs of the investments that helped build an industry and drove prices down.
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@Pete
And pray tell, what does gas or nuclear power cost per Kw hour?
@James According to the latest Lazard Levelized Cost of Energy report, gas is $41-74/MWh. Coal is $60-143/MWh, and nuclear is $112-189/MWh. https://www.lazard.com/perspective/levelized-cost-of-energy-and-levelized-cost-of-storage-2018/
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So, the solar suppliers are going to be shortchanged to give money to the fire victims?
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It's a common problem that bankruptcy allows companies and executives to be shielded from the consequences of negligence. It's a missive problem in many consumer products and transportation, particularly acute in truck transportation, for example, where a tiny company's are bizarrely allowed to exist that are capable of doing damage that is in excess, often by several multiples, of the company's value.
That's a broken system.
Imagine if decision makers were held *criminally* liable for the consequences of their actions. Not murder, but negligent homicide.
First of all, the incentive to cut corners in a way that puts the public at harm would be drastically reduced. Second, corporations have more leeway to hold rogue workers accountable, rather than the corporation as a whole symbolically bear responsibility via its CEO or something. Staff will take things more seriously and be better disciplined. It was rather pointless for the PG&E CEO to resign.
I could be wrong, but it sounds like you can zero in on people who's decisions led to the Camp Fire.
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@Joe Schmoe
So who is at fault when high winds cause power lines to fail sending sparks to fall on the tinder dry scrub below them? I guess you'll have to put God in jail.
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The government essentially lies when it claims that utilities are private, even if it regulates the hell out of them. They're not de facto private because we need the lights to stay on and we the public need to have a clear say in how power gets generated. The company should not be allowed to play with bankruptcy court. The execs at PG&E are playing by rules written by California's legislature, which is right now abdicating responsibility to organize power creation and distribution in the public interest. It remains to be seen if the legislature will 1) come to understand what's going on, and 2) do something to maintain green energy production.
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PG&E directly caused innocent people to die via neglect of equipment. This includes the gas explosion that destroyed many homes in a neighborhood, not just the fires.
If corporations are people and have a voice in elections, then shouldn't they also be criminally prosecuted when they kill people? But how?
The executives who made the decisions to skimp on equipment maintenance should face criminal charges and prison time, not walk away with millions in bonuses and severance. Fines are merely a cost of doing business, paid by rate payers, while the executives become obscenely wealthy.
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Interesting...
Get beyond the hype and glitz – the technology, maintenance, and operation of our Left Coast power production and distribution ecosystem looks to be on par with the NYC subway system...
So, after about forty years of wandering through the metaphorical desert of nation-scale renewables, nuclear energy is steadily sneaking back onto the front burner...
From the cheap seats, looks like we’ve been more concerned about militarizing and monopolizing the fuel-production aspect, which has held the technology back – including design of inherently safe reactor and fuel module geometries, and coolants and fuel-mixtures themselves – for at least twenty years...
In a market vacuum, that’d be recoverable...
But what was once a substantial US/Euro technological lead is looking more like a substantial technology lag these days...
A shining exception on the distribution side is HVDC – which was pioneered by Siemens, with whom the Chinese have jumped headlong into deep partnership...
Advantage will accrue to both of them, for advancing on this...
PS
There’re still nonsensical “scientific” points of view being put forth – like nuclear power could be a “placeholder” till mid-century...
By when, all of the things that haven’t been made to work over the last half-century – magically will...
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@W in the Middle: Your comment has nothing to do with this news story. You need to educate yourself. PG&E gets almost all of its power from hydroelectric. The remainder is from oil fired generation, solar, geothermal and wind. Over the last decade it has decommissioned almost all of its nuclear energy plants. SoCal Edison is doing the same.
Our problem is that PG&E put its shareholders first by giving big dividends when it should have been spending the money on their power lines to ensure that they are cleared of trees and brush.
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Didn’t say CA is bringing back nuclear - yet...
But – much of the rest of the world is...
Your flywheel has you all heading in the direction of unsustainable take-or-pay agreements on "renewables" – along with mandated increases in share of production...
Quietly keeping hydro in as the go-to “renewable” or “carbon-free” power – even as construction of new dams (in the US) is obstructed – doesn’t fool anyone, but when you see things like...
> Ivanpah’s exemption for gas-burning
*ttps://www.pe.com/2017/01/23/ivanpah-solar-plant-built-to-limit-greenhouse-gases-is-burning-more-natural-gas/
> Gigascale pumped storage proposals – along with claims of ”>90%” efficiency
*ttps://www.utilitydive.com/news/los-angeles-considers-3b-pumped-storage-project-at-hoover-dam/528699/
> The glib purported ease with which wind, solar, gas, and hydro can be mixed “on the fly” – let alone all the magic batteries coming – when the reality is that the hydro and gas baseline capacity need to equal the peak demand rate, and the wastage is much higher than projected, because the wind/solar production is much more erratic than projected
> The complete silence on HVDC distribution or residential scale gas-fired co-generation – where the energy grid is already in place
The level of gaming is looking asymptotically Enronesque...
Including future extortionate spot-shortage pricing...
@Jeff - No, you need to educate yourself and not look like such a fool. Read up on where PG&E gets its power mix from and about decommissioned nuke plants in California.
Renewables - 33%
Nuclear - 24%
Natural Gas - 17%
Unspecified - 14%
Hydro - 12%
PG&E has only decommissioned one nuke unit, located at Humboldt Bay. Diablo Canyon is their only other nuke site, and both reactors are still functional.
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After the bankruptcy is resolved I expect all California utilities to ask for large rate increases to pay for capital improvements to assure more reliable, safer distribution systems. Will regulators really claim that safety and reliability is not that important? But ideally California will find a way to have someone else pay for it.
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@Robert Winchester - This. This is the key to the problem. PG&E doesn't have unlimited funds. They are paid out of the electricity consumers' bills. And the rates are controlled by the public service commission.
If you want every line in California underground, power will cost 3x as much. Do you think consumers will stand for it? Do you think the regulators will allow the rate increases?
If not, who will pay for the upgrades?
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The climate scam appears to be a bit globally snake bit; definitely in a slump, as they say.
“PG&E pays Con Edison an average $197 per megawatt-hour for its electricity, compared with the $25 to $30 per megawatt-hour cost of power ...“
“Gov. Gavin Newsom, a Democrat ... has pledged to ... producing 100 percent of California’s electricity from carbon-free sources by 2045. But the state’s efforts have been complicated by the complexity and wide-ranging impact of” --- reality.
“Con Edison, the New York utility, is also exposed because it supplies power to PG&E through a subsidiary that has operations in California and neighboring states.“
Remember the words of President Ford!
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@Jabin You "conveniently" left of the last 4 words of the quote “PG&E pays Con Edison an average $197 per megawatt-hour for its electricity, compared with the $25 to $30 per megawatt-hour cost of power ... from NEW SOLAR PLANTS" Now why would you do that?
"Remember the words of President Ford"; "I have granted a full, free, and absolute pardon ..."
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I do not understand why the fires were not considered Acts of God. Today it seems everybody needs to sue. Probably in this case class action lawsuits, where the law firm representing the class will makes millions, maybe billions and the claimants will make chump change. Property owners should have fire insurance that covers their loss.
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PG&E lobbied CPUC, to allow large reductions in line maintenance costs by decreasing the distance between lines and nearby vegetation which triggered required maintenance. As a result, PG&E became directly culpable and therefore liable (even criminally so) for the 2017 fires, over 40 deaths, and massive destruction. It is becoming apparent that similar behavior, at the instruction of high level management, triggered the 2018 fires, over 80 dead, and even greater destruction.
Not acts of God. Acts rather of humans.
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@Rod
Now, the Democrats want God!
@Rod I agree. The problem is with the way the law was structured. It imposed strict liability on PGE whether or not it was negligent This pretty much means any fire that was caused by something hitting a power line was automatically going to make PGE liable. It makes no sense when you consider a number of things. First there are thousands of miles of lines in forested areas that can be impacted by extreme weather. Second, people choose to build in heavily forested areas and then demand electricity and fail to maintain safe underbrush standards by clearing and burning . Third the Dept of Forestry and Fire Protection that likes to call itself CalFire only, fails to do its forestry part of the job. Finally, sometimes Calfire sits and waits for fires to hit critical before putting sufficient resources on it. About 3 years ago we had a fire start. CalFire put in minimal resources and we ended up with a month of dangerous fires and hundreds of homes destroyed.
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