PG&E Bankruptcy Underway
As anticipated, PG&E filed for Chapter 11 on January 29, kicking off the reorganization of California’s largest utility.
The bankruptcy proceedings are likely to bring major changes to PG&E. PG&E is attempting to include the cancellation or modification of its power purchase agreements (PPA) with renewable energy providers in this process (Note: PG&E was unsuccessful at this last time around). While a PPA cancellation could negatively affect power providers in the clean energy industry, PPA contract negotiations will not affect funding for the Public Purpose Programs (PPP) financing your energy retrofits. They are separate funds. PPAs are long-term contractual obligations that bankruptcy proceedings are specifically designed to manage, while PPP funds are not a PG&E asset.
PG&E filed a motion to maintain and administer customer programs on the day they filed for bankruptcy. The court recently granted that motion, ensuring PPP funds financing your retrofits will not be leveraged during PG&E’s bankruptcy process.
Since the first Chapter 11 announcement several weeks ago, incentive program administrators have continued to express confidence in the health of PG&E and BayREN programs. We are expecting to enroll a record number of Bright Power projects into both programs this year.
Of course, we are always here to answer any of your energy, water, or incentive program questions! You can contact us here.
Original Post: 1/31/19
PG&E confirms that they “expect to continue incentive programs related to PPPs.”
Earlier this week, PG&E announced their intent to file for Chapter 11 on or around January 29, 2019, due to extensive liabilities resulting from the 2018 California wildfires.
This announcement sparked intense media speculation about the future of the utility, and any commitments they made. You may be wondering specifically about the fate of PG&E’s energy efficiency programs, and any projects that are planning to receive incentives from them. Having completed nearly 100 retrofit projects as part of PG&E’s multifamily energy efficiency programs, and with many more in the pipeline, we are making it our business to stay on top of these concerns.
What We Know So Far
PG&E is not going out of business. In an open letter to customers, Interim CEO Jon Simon said, “A Chapter 11 filing will give PG&E an opportunity to address and resolve its financial situation while providing an ability to maintain ongoing operations.”
Incentive programs are going to remain open. PG&E projects participate in programs that are funded by the Public Purpose Program (PPP), a pool of money completely separate from PG&E’s gas and electric funds and controlled by the California Public Utilities Commission. Because of this, PPP funds will be shielded from bankruptcy proceedings. PG&E confirmed that they “expect to continue incentive programs related to PPPs.” And there is a good precedent: the last time PG&E filed for bankruptcy in 2001, incentive dollars were not affected.
Your Property’s Incentive Program
Most Bright Power clients that are PG&E customers participate in PG&E’s Multifamily Upgrade Program (MUP) or the Bay Area Regional Energy Network (BayREN). Both are funded with PPP dollars. In addition, BayREN is its own entity, separate from PG&E, which further shields it from bankruptcy proceedings.
Bright Power has been in continuous contact with administrators of both programs, and they have indicated no changes to their incentive program funding, staffing, or processes as a result of the bankruptcy proceedings. Both programs continue to reserve project funds through 2020.
What’s Ahead
While we don’t know specifics, we know that significant changes are coming for PG&E. But you can rest assured that incentive program dollars should be safe, and Bright Power is committed to protecting the interests of our clients throughout this reorganization.
We will continue to update you here as we learn more.