PG&E Declines San Francisco's Offer to Buy Power Lines

Doug Sovern
September 09, 2019 - 1:50 pm

Matt Bigler

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PG&E says it isn't interested in selling its power lines in San Francisco to the city, which is offering the utility $2.5 billion as the gas and electric provider tries crawling out of bankruptcy.

PG&E is trying to emerge from federal bankruptcy proceedings and has massive liabilities looming from wildfdires possibly linked to its equipment. San Francisco officials think that such conditions create an opportunity to take over the company's local electricity grid. The city would run it and sell the power instead, under such a plan. 

“The city’s goal is to own the whole thing, and also I think more importantly, to distance itself from what it perceives as poor management at PG&E and kind of the disastrous consequences for rate-payers that flow from that core management,” Michael Wara, head of the climate and energy policy program at Stanford’s Woods Institute, said. 

Related: PG&E Weather Site Predicts Possible Power Outages

Wara calls the city's $2.5 billion opening bid a lowball offer, which may be why PG&E has issued a statement saying such a sale is not in the best interest of its customers or stakeholders. 

It is presenting its initial reorganization plan to a bankruptcy judge, banking on at least $14 billion in new investment from selling more stock. 

But PG&E can't know yet how much it will have to pay to victims of the Tubbs wildfire, with a trial on that still to come. 

Wara says the bankruptcy plan is full of blanks and question marks.

“I don’t think by any stretch this is the end of the process,” he said. “This is really just a waypoint.”