PG&E’s Bankruptcy Declaration Could Pave the Way for Higher Energy Costs


On January 29th, 2019, Pacific Gas & Electric, one of the largest utility companies in California, formally declared Chapter 11 bankruptcy. This was hardly a surprise; the move was expected after the company was served a massive volume of lawsuits after they were found to be liable for damages caused by the devastating Camp Fire. Those lawsuits total an estimated $30 billion in liabilities.

The utility company has been blamed for the damages after the cause of the fire was found to be a 100 year old PG&E electrical transmission tower. A hook on that tower which supported a high-voltage line failed, sending the line tumbling to the ground, where the ensuing sparks ignited the fire.

Now, as PG&E’s bankruptcy proceedings have begun, it’s widely expected that PG&E customers will be seeing sharp increases in their energy costs each month to compensate. Chapter 11 bankruptcy does allow the company to continue doing business, so PG&E customers will continue to receive their energy from the utility giant, but it should come as no surprise that the costs are expected to increase.

And that’s not just concerning for much of Northern and Central California, where PG&E services, it’s also concerning for customers around the rest of the state who could also see their rates rise to compensate.

What This Means to California Power Customers

If you’re a California utility customer, you’re going to feel some effects of this decision. This is true even if you’re not a PG&E customer. Some people expect electricity rates to rise across the state, particularly while PG&E undergoes their restructuring. PG&E has already purchased a month’s advance of natural gas shipments, but creditors have begun to scrutinize the company and demand cash payments. This will likely cause disruptions and delays in supply channels, and could even result in PG&E not being able to meet demands on some occasions.

As the company restructures, some fear interruptions of service may be possible. When there’s a shortage, what will most likely happen is that other utility companies in the state will likely be called in to fill in the gap. That means more demand on companies like Southern California Edison and San Diego Gas & Electric. That could mean increased demand and increased prices from these companies for their customers as well.

While other utility companies have held steady at their pricing for now, there’s no guarantee things will stay that way.

Grid Updates & Safety Improvements

This also opens up another distinct possibility: the time may be here for PG&E as well as other utility companies to start taking a closer look at existing infrastructure and starting to update it to reduce the chances of a disaster like this ever happening again. This is no small feat—the tower which failed was 100 years old, and many others across the state are of similar age. Updates could take months or even years and cost millions of dollars to complete. With PG&E likely unable to receive credit with which to begin this monumental project, they’re probably going to have to undertake this project with cash financing, which means added difficulty.

While nothing is in the works yet, history would suggest that this cost will be passed on to customers through new fees attached to electric bills that would only make grid power even more expensive.

Why Switch to Solar

What does all this mean? It means that now’s the perfect time to switch to solar. With such a large chunk of California’s public electrical grid in flux, there’s a lot of uncertainty as to how things will affect pricing. And if history suggests one thing, it’s that prices don’t usually go down.

By switching to solar now, you could remove a good chunk of that uncertainty. A solar energy system from SunPower produces an abundance of clean, renewable energy that you can use to power your own home, keeping your lights on and appliances running, all without being dependent on the electrical grid. Power you don’t use is sold back to the grid at retail rates, which means your will likely only rise.

California is the perfect place for solar as well. With well over 300 sunlight-filled days per year on average, that’s a lot of energy you could be producing and enjoying without having to purchase it from your local utility company. That means more control over your expenses, more money saved every month, and less reliance on environmentally-polluting fossil fuels!

Take control of your energy costs today! Contact the Southern California solar installers from SunPower by Sea Bright Solar at (909) 480-3783 to request more information.

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There’s No Better Time to Go Solar

Switch to solar and begin saving money and the planet! Call us today at (909) 480-3783 or fill out the form to schedule your free solar analysis.

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