June 12 (Renewables Now) - A US court has ruled that the Federal Energy Regulatory Commission does not have jurisdiction to prevent bankrupt utility Pacific Gas and Electric Company (PG&E) from scrapping or renegotiating power purchase agreements (PPAs).
The San Francisco-based parent of the debt-laden utility, PG&E Corporation (NYSE:PCG), filed voluntary petitions under Chapter 11 of the US Bankruptcy Code in late January 2019, as it was burdened with liabilities following the 2017 and 2018 Northern California wildfires. This development raised concern among power producers with existing off-take contracts with PG&E.
NextEra Energy Inc (NYSE:NEE) was among PPA counterparties that asked the FERC in January to intervene in PG&E’s possible decision to amend or reject existing off-take contracts. The commission granted this request by issuing two orders, but on June 7 the US Bankruptcy Court for the Northern District of California ruled that the FERC does not have concurrent jurisdiction to authorise such moves.
After PG&E announced its intention to file for bankruptcy protection, Fitch Ratings downgraded certain trust certificates of Genesis Solar LLC, which holds a 250-MW concentrated solar power (CSP) plant in California, in turn owned by NextEra Energy Resources LLC.