by Christopher Martin, Bloomberg
PG&E Corp. is seeking court protection to amend or cancel power purchase agreements with suppliers as part of its bankruptcy proceedings.
The company filed for Chapter 11 bankruptcy protection with more than $50 billion in debt Tuesday morning after a series of deadly wildfires scorched hundreds of thousands of acres in California over the past two years.
Suppliers are concerned that their contracts could be voided or renegotiated by the bankruptcy court. NextEra Energy Inc. earlier this month asked the Federal Energy Regulatory Commission to step in and rule that PG&E can’t reject or amend power purchase agreements. At stake is about $42 billion in power sales agreements that PG&E has entered into, mostly for above-market renewable energy supplies that California required the utility to buy.
Fong Wan, PG&E’s senior vice president of energy policy and procurement, asked for court protection to assess which of power contracts — which number at least 387 — can be rejected “without the threat of FERC action during the restructuring,” according to a filing with the U.S. Bankruptcy Court the Northern District of California on Tuesday.
He said no decisions have been made about whether to “assume or reject” any PPAs in the Chapter 11 proceedings.