FERC claims 'concurrent jurisdiction' in PG&E-NextEra bankruptcy dispute
- The Federal Energy Regulatory Commission (FERC) on Friday said it has "concurrent jurisdiction" with bankruptcy courts over power purchase agreements (PPA) that Pacific Gas & Electric (PG&E) may seek to cancel as part of its bankruptcy proceedings.
- NextEra Energy had asked FERC to block the utility from amending or rejecting PPAs with energy providers, a move the company said PG&E will "undoubtedly" ask the bankruptcy court to take in order to reduce its financial obligations.
- PG&E is expected to file for Chapter 11 bankruptcy protection tomorrow, as the company attempts to deal with up to $30 billion of liabilities associated with the 2017 and 2018 wildfire seasons.
FERC's Friday order could give NextEra and other power producers an avenue to preserve their contracts with PG&E if the utility seeks to invalidate them as part of its bankruptcy proceeding.
"The Commission shares concurrent jurisdiction with bankruptcy courts over wholesale power agreements," FERC said in its order. "These agreements are still subject to the Commission’s jurisdiction and the Commission maintains discretion to exercise its authority."
PG&E has already decided not to renew the federal licenses for two hydroelectric dams, and critics say more than 100 others are also on the chopping block, according to The Sacramento Bee.
The utility could also seek to invalidate some of its older, more expensive wind and solar contracts as it seeks to ease financial liabilities its debt in Chapter 11 proceedings.
NextEra earlier this month asked FERC to block the utility from amending or rejecting PPAs with several providers.
The renewables developer said PG&E "undoubtedly will ... ask the bankruptcy court to enjoin a proceeding by this Commission from exercising its [Federal Power Act] jurisdiction over such contracts or from issuing an order to stay PG&E or the bankruptcy court."
Utility officials had warned its wildfire liabilities outweighed its insurance coverage, and California utility regulators previously indicated they didn't want to see PG&E file for bankruptcy, but feared any bailout was politically untenable.
Regulators have said they would consider a range of options for PG&E going forward — from new management, to breaking up the company. Last week, the utility announced it had secured $5.5 billion in debtor-in-possession financing, to keep operations running while the bankruptcy proceeds.
- Federal Energy Regulatory Commission ORDER ON PETITION FOR DECLARATORY ORDER AND COMPLAINT
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