Author Topic: PG&E - Potential Bankruptcy  (Read 16255 times)

Cigarbutt

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Re: PG&E - Potential Bankruptcy
« Reply #120 on: April 13, 2019, 05:26:54 AM »
In case some are following or interested.

This bankruptcy so far is like a walk in the park.

The legislators have come up with a somewhat predictable plan and it seems that concerned parties (despite diverging interests) may be able to get their act together.

https://www.gov.ca.gov/wp-content/uploads/2019/04/Wildfires-and-Climate-Change-Californiaís-Energy-Future.pdf

Relevant background data and analysis:
https://riskcenter.wharton.upenn.edu/wp-content/uploads/2018/08/Wildfire-Cost-in-CA-Role-of-Utilities-1.pdf
https://riskcenter.wharton.upenn.edu/wp-content/uploads/2019/02/Financing-Third-Party-Wildfire-Damages-1.pdf

The future remains unknowable but this may become interesting with the smell of smoke and when the threat of utility breakdown to municipals is no longer a footnote.
« Last Edit: April 13, 2019, 05:30:19 AM by Cigarbutt »


Cigarbutt

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Re: PG&E - Potential Bankruptcy
« Reply #121 on: April 29, 2019, 05:57:22 AM »
PG&E just obtained a regulatory rate hike to pay some of the company's costs for rain and wind events in 2016 and 2017.

There is realization (recent government documentation) that home building in high-risk areas should be curtailed and that the recent trend in higher wildfire activity may be due, in large part, to a natural reversion to the mean due to excessive previous fire suppression and poor forest management. Here's a reference that captures the spirit of data and analysis that has been out there for at least 20 years:
https://fee.org/articles/let-forests-burn-if-you-truly-love-them/?utm_campaign=FEE%20Daily&utm_source=hs_email&utm_medium=email&utm_content=72148453&_hsenc=p2ANqtz--rLO-JA3sNMQ3amNwGBYs1khAwfty71tl5tNIl8_jZFlcPl3OuCJ1d6Qvp3YWvySMLbwOQA9_Bgc7qIO-rbqe7

A few days ago, there was a rumor that Berkshire Hathaway was looking to buy PG&E, which Mr. Buffett nipped in the bud. I would say there is value in a continuing entity but further wildfire losses this year and the next may have a catastrophic impact on residual value. Interesting to follow.