Facing billions of dollars in potential liabilities from both the Camp Fire last November and the 2017 fires in the wine country, PG&E faces bankruptcy, but the utility is vowing to continue to provide electricity.
In an email to the city, John Costa told the mayor, council and staff, “Today, PG&E announced that it currently intends to file for reorganization under Chapter 11 on or about January 29. We do not expect any impact to electric or natural gas service for our customers as a result of the Chapter 11 process.
“Importantly, we are not going out of business. Chapter 11 is a court-supervised proceeding that allows companies to reorganize their finances and resolve liabilities while continuing to operate their businesses.”
In a press release, they stated that “the Company is also committed to continuing to make investments in system safety as it works with regulators, policymakers and other key stakeholders to consider a range of alternatives to provide for the safe delivery of natural gas and electric service for the long-term in an environment that continues to be challenged by climate change.”
In a statement from Valley Clean Energy, they state, “Customers of Valley Clean Energy… need not fear an interruption in service following PG&E’s announcement Monday that it intends to seek bankruptcy protection.
“We’re watching these developments very closely,” said Mitch Sears, VCE’s interim general manager. “But PG&E has said it does not expect any impact to electric or natural gas service for its customers as a result of the Chapter 11 bankruptcy process. That is good news for our customers.”
But in other ways, this announcement could be a game-changer, particularly if PG&E were to decide to sell off assets in order to meet its financial obligation.
Of keen interest to many in Davis for years has been the 27.49 acres Service Center cite located on the southeast corner of Fifth and L Streets. While long considered unattainable, it has often been cited as an ideal location for high density housing, mixed use development, or possibly a business park.
The city has engaged with PG&E over the years regarding an interest to re-use the site, but PG&E has already declined interest. During the 2007 Housing Element Update process, the citizen-based steering community ranked the site No. 8 for potential re-purposing and re-development as housing. It might have ranked even more highly had the site been viewed as possible.
There are some concerns about contamination of groundwater, although sources suggest that would probably be easily solvable should the site become available. There are also questions as to whether the city would be able to purchase the site or it would have to be a private party – there are advantages and disadvantages to both.
Councilmember Will Arnold told the Vanguard, “Some compelling opportunities may indeed present themselves as PG&E proceeds down the path of bankruptcy. We at the City are closely monitoring the situation as it unfolds.”
Meanwhile, Dan Carson told the Vanguard, “Speaking only for myself, I do think we would want to explore whether PG&E is planning to dispose of or consolidate its operations, including its land next to our downtown.”
He noted, “If that were the case, it would also make sense to understand both the opportunities and any liabilities posed by acquisition of this key site as well as if there were any interest in private third parties in doing so, which could also benefit the city.”
He added, “It sounds like it will take some time for PG&E to emerge from the process of reorganization of its assets and that the Legislature and the PUC will also be involved. I suspect it will be some time before the path forward for the utility is clear.”
The prospects for purchasing or repurposing this property are not clear, but the door is now clearly open to that possibility, whereas in previous inquiries PG&E has not been interested in disposal of this asset.
—David M. Greenwald reporting