Specialist
Former Senior Analyst at California Public Utilities Commission (CPUC)
Agenda
- Damages to utilities caused by the 2018 California wildfires, highlighting the most severely affected players and legal and regulatory ramifications
- Likelihood for PG&E to renegotiate versus reject PPAs, and either scenario's impact on the California renewable effort
- Outlook, exploring what the PPA situation may look like under bankruptcy
Questions
1.
Could you begin with an overview of the market dynamics and the state of renewable procurement in California?
2.
How would you value the PPA [power purchase agreement] contracts that PG&E holds and how are they split between solar and wind?
3.
You mentioned that PG&E is ahead of these RPS [renewable portfolio standard] obligations. How far ahead is it and how does that factor in?
4.
You mentioned that PG&E is ahead or over-procured on renewables. Should the state be concerned that in years where hydro production plummets, it will need to fill about 10-15% more of the state’s power needs with other powers? What do you think it will use?
5.
How difficult do you think it would be for PG&E to negotiate or cancel some of these contracts in the context of bankruptcy and what factors go into that calculation?
6.
If PG&E chooses to reject the long-term PPA, how hard would it then be to replace renewable capacity?
7.
If the new entity post bankruptcy enters new contracts, where do you think that long-term cost would be passed on to? Would it be to the ratepayers? What would the risk premium on those new contracts look like?
8.
How do you think the damage provisions would be treated in the bankruptcy process? Is damage is limited to a few years of payments and what historical precedents are comparable?
9.
How does the political environment factor in and to what extent is the burden to ratepayers considered by legislators?
10.
Do you have any insight on PG&E’s adversary proceeding against FERC [Federal Energy Regulatory Commission] and what the likely outcome of that may be?
11.
How financially stable do you think this type of business is over time and how do you think PG&E can stay competitive with the CCAs [community choice aggregators] without rejecting PPA contracts?
12.
It seems that the PCIA [power charge indifference adjustment] charges at the CCAs don’t totally compensate the PPAs 100% for the procurement. Does it concern you that 100% of the power truly isn’t compensated at pass-through?
13.
What percentage of contracts do you think PG&E will try to reject? Of the disclosed contracts, commitments were around USD 42bn as of year-end 2017. What dollar value or percentage of these commitments do you think will be rejected in the bankruptcy?
14.
Do you have any insight into PG&E’s non-renewable PPAs and what are your expectations of how this will be treated?
15.
What would you estimate is the percentage of contracts that you think PG&E would try to reject?
16.
Is there anything you would like to add that we haven’t touched on today? Do you have any insights into PG&E’s wildfire mitigation plans, what those look like and the expectations from CPUC [California Public Utilities Commission]?
17.
What is your outlook for the space and what do you think we should be looking out for in the next few months?
