January 18, 2019

PG&E's Ch. 11 Is Climate Change Wake-Up Call For Utilities ($)

Nicholas Institute for Environmental Policy Solutions

A new article in Law360 discusses how Pacific Gas & Electric Co.'s plan to seek bankruptcy protection to address crippling liabilities for California wildfires should ring alarm bells for utilities, regulators and lawmakers in other states and force them to examine whether the current utility business model can accommodate climate change-related risks to energy infrastructure, policy experts say.

Unless utilities want to follow the likes of PG&E into bankruptcy, experts say they might look to cut their climate risks in a different way: getting out of areas that are especially vulnerable. “Utilities may find it doesn't make sense to serve certain territories, they may retreat from fire-prone areas, or coastal areas,” said Kate Konschnik, who directs the climate and energy program at Duke University's Nicholas Institute for Environmental Policy Solutions and focuses on electric regulation. “Society will have to figure out how to balance making the utility pay for damages from downed power lines or infrastructure fires and discouraging utilities from serving certain communities at all.”