Pacific Gas & Electric, California’s largest investor-owned utility is about to declare bankruptcy, which could undermine the state’s climate goals. The utility faces massive liability for potentially causing the recent devastating Northern California wildfires.

If bankruptcy happens, California’s clean energy companies — from solar PV facilities to energy efficiency contractors to electric vehicle charging businesses — could soon lose one of their top customers and potentially see their existing contracts ripped up. And that means the state is losing a major investor in various climate programs.

Buzzfeed and E&E News [paywalled] covered this story in more detail, including some quotes from me.

Going forward, I hope the state and various local governments in PG&E service territory consider the following reforms:

• Break up PG&E’s electricity and gas divisions, with the long-term goal of phasing out natural gas use in the state. We mostly likely need to accomplish this phase-out anyway and move towards all-electric appliances and building. A breakup could hasten that progress.
• Buy out PG&Es assets and form municipal utilities. San Francisco is already exploring purchasing the “sticks and wires” in the city to form its own utility. Municipal utilities in the state tend to have cheaper rates and often more aggressive clean energy policies (such as Sacramento Municipal Utility District), so this could be a good move overall for ratepayers and the environment. Although it’s worth noting that PG&E is one of the cleanest utilities in California already.
• Revamp liability for wildfires going forward. Right now, whichever party is responsible for igniting a blaze is 100% liable for all damages. But what about property owners who failed to maintain and “fire-harden” their buildings? What about local officials that allow development in high-risk fire zones? What about polluting companies that caused climate change, which exacerbated the fires’ intensity? Liability should fall on these parties, too, giving them incentive to correct their actions going forward and hopefully reduce the severity of future wildfires.

These reforms would be a welcome outcome from an otherwise unfortunate situation. In the meantime though, it’s hard to foresee an outcome of PG&E’s death spiral that won’t at least temporarily slow our climate progress in California.