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PG&E fails to reach deal with other firms over power contracts

Recently the Pacific Gas and Electric Company’s profits took a significant hit because of its alleged role in causing Californian wildfires and the company’s associated decision to file for bankruptcy protection. Net profits fell by 69 percent to $136 million, down from $442 million a year earlier.

The company also owes billions to other companies for power services. In relation to these contracts, PG&E has been unable to reach a deal with NextEra Energy Inc. and other firms. This relates to a jurisdictional dispute over the PG&E’s ability to walk away from or amend these agreements, and whether these should be heard by the bankruptcy court (which PG&E favor) or the Federal Energy Regulatory Commission (which NextEra Energy favors).

The impact upon the company and the businesses and households it serves is considerable. PG&E provides natural gas and electricity to most of the northern two-thirds of California. This amounts to 5.2 million households.

The current issues affecting the company date to In November 2018 when PG&E was sued in the San Francisco County Superior Court by multiple victims of the Camp Fire, which is the deadliest and most destructive wildfire in California history. The fire caused at least 85 civilian fatalities. Investigations suggest that PG&E powerline failures during high winds caused the fire. The powerlines had various issues relating to their maintenance and one charge leveled at PG&E is that they did not switched off the powerlines good time under conditions of high winds.

Currently the cause of the fire is still under investigation. However, PG&E have acknowledged that they sent an “electric incident report” to the California Public Utilities Commission indicating a power failure on a transmission line on November 8, some 15 minutes before the fire was first reported close to the location where the fire began. Due to its likely liability, in January 2019 PG&E began the process of filing for bankruptcy.

As part of the bankruptcy process PG&E Corp has attempted to reach deals with those companies that it owes considerable sums of money to, like NextEra Energy Inc. These attempts at settlements, which amount to billions of dollars, have not been successful. This means, within the next few weeks, this matter will now be decided by the judge overseeing PG&E’s bankruptcy case. The case is set to continue.

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Dr. Tim Sandle is Digital Journal's Editor-at-Large for science news. Tim specializes in science, technology, environmental, business, and health journalism. He is additionally a practising microbiologist; and an author. He is also interested in history, politics and current affairs.

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