PG&E’s Bankruptcy Was Predictable And Could Have Been Prevented With Distributed Assets
When PG&E Corp. said that it would declare bankruptcy on Monday, no one was surprised given the damages from wildfires. But what is less recognizable is that a “straight line” can be drawn from Pacific Gas & Electric’s bankruptcy filing in 2001 to its parent’s current financial and legal troubles.
The San Francisco-based utility failed to maintain its infrastructure and allowed unwieldy trees to interfere with power lines. But there’s also a systemic problem, which is that California has yet to find its sweet spot between the regulation of electric generation companies and the deregulation of them — or building the right landscape to get businesses to invest in “distributed” assets that can feed clean power to specific locations.
“The current PG&E bankruptcy is another bullet point in the timeline of both the company and California’s structural issues,” says Brian Curtis, chief executive of Concentric Power, in an interview. “It’s a combination of California’s political system and aggressive clean energy policies. Utilities don’t have an easy job keeping up with pricing, safety and reliability.”