Energy producers holding power purchase agreements with Pacific Gas & Electric appealed U.S. Bankruptcy Judge Dennis Montali’s decision that federal regulators don’t share jurisdiction over the contracts, which the utility might be authorized to cancel as part of its reorganization process.
In a series of filings on June 13 through June 17, the producers notified the bankruptcy court of their escalation of the legal battle over jurisdiction of PG&E’s contracts to the U.S. Court of Appeals. They include NextEra Energy, Mojave Solar LLC, Exelon, Consolidated Edison Development, Clearway Energy, MC Shiloh IV Holdings LLC, NRG Energy and TerraForm Power.
The filings follow a June 7 decision by Montali, the judge overseeing PG&E’s Chapter 11 reorganization proceeding, that denied the Federal Energy Regulatory Commission’s claim that it holds “concurrent jurisdiction” over the fate of the contracts as PG&E emerges from bankruptcy. Montali’s decision would give him sole authority over PG&E’s decisions to nullify the contracts, a scenario that federal energy regulators argued could have public interest implications (See CEM No. 1543 ).
Montali also issued a June 12 certification for direct appeal, allowing parties to take the matter directly to the U.S. Court of Appeals for the Ninth Circuit. In an accompanying filing, he noted that the central issue in question is whether the court may alone rule on a motion to reject a PPA, or whether FERC has a say in the matter.
“If FERC has a say in the rejection decision because its authority is upheld as “concurrent” with this court’s, an extremely complicated situation will be rendered all the more complicated and time-consuming, possibly delaying further the ultimate resolution, settlement and payment of those wildfire and contractual claims,” Montali said.
PG&E has identified about 400 wholesale power contracts amounting to more than $42 billion—making it the largest public utility bankruptcy ever—and certain rejections are expected, Montali said. He added that the company’s eventual reorganization plan would have to weigh these contracts against claims filed by victims of the 2017 and 2018 wildfires. PG&E has said it has made no decisions on whether it will seek to cancel any of the contracts
PG&E spokesman James Noonan reiterated a previous statement from the utility, acknowledging concerns about how its bankruptcy proceeding could impact California’s clean energy progress. However, he declined to comment specifically on the notices of appeal. NextEra spokeswoman Debra Larsson also declined to comment.