Energy & Utility Bankruptcy – Who Pays?

This week, PG&E started the process of filing for bankruptcy protection in the fallout of this past summer’s massive California wildfire season. GreenTech Media covers the announcement here…

https://www.greentechmedia.com/articles/read/pge-files-for-bankruptcy-protection-facing-billions-in-wildfire-liabilities?utm_medium=email&utm_source=Daily&utm_campaign=GTMDaily#gs.1m8zMEz0

This raises the important question of how exposed energy & utility infrastructure is to damage from wildfire, flood, earthquake, and other threats. BC has seen escalating wildfire damage over the past few years, so it is a fair question to ask how BC Hydro, Fortis, Enbridge, & others are managing their risks.

In the case of BC Hydro, rates already climb 3-4% every year. As a ratepayer, I have several related concerns…

1. How will the almost certain escalation in insurance costs over the coming years impact the acceleration of electricity rate increases?

2. Will already stretched fire & emergency response teams be asked to prioritize the protection of infrastructure over personal homes & property?

3. How vulnerable is our existing power distribution grid to catastrophes?

This past fall here in BC, we saw how a natural gas pipeline explosion that took a month to sort out, sent ripple effects through the economy. We are told to expect higher food prices & higher winter heating costs as a result. What additional economic & environmental costs would appear on our doorsteps should other resource pipelines & infrastructure get hit with disaster? Prevention is nearly impossible, so the goal has to be mitigation & ultimate responsibility for the known risks associated with the work. Costs of “plan-B” always have a way of getting passed down to the end-user.

GreenTech Media has a follow-up article on PG&E specifically addressing questions regarding the handling of liability costs, ongoing power generation agreements, migration plans to renewables, and development plans for micro grids & energy storage.
A very interesting read…

https://www.greentechmedia.com/articles/read/pge-questions-coming-bankruptcy?utm_medium=email&utm_source=Daily&utm_campaign=GTMDaily#gs.aaP71UCp

So, given that government and private entities will continue to take risks, especially when they have the social safety net of taxpayers, what can the taxpayer or ratepayer do to protect themselves? (ourselves)

One approach is to remove the ‘ratepayer’ status as much as possible. The insurance portion of a public utility is always going to be funded in large part by taxpayer money, and as we all know, death & taxes are a sure thing in life. But we can at least reduce our consumption of their product. This involves taking control of our costs by generating some, or all, of our own energy. Not everyone is able to go completely off-grid, but net-metering programs do work, and actually have the dual purpose of reducing the utility’s need build more infrastructure projects themselves (read this as avoiding the need for more taxpayer-funded boondoggles).

When we have the ability to take personal control, and responsibility, for our choices and consumption, it is important to do so to whatever degree is possible or practical.

  1. Evaluate your consumption – do you know what your bills are?
  2. Look for ways to minimize consumption – what can we change?
  3. Apply the tools available to be your own supplier – how to change the equation?

This is not a test. It’s an exploration and a challenge.

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