PG&E cuts deal to pay less for solar, batteries

PG&E Corp., the California utility giant that went bankrupt in January amid crippling wildfire liabilities, has reached a deal with some of its power suppliers that would cut the prices it pays for their electricity.

San Francisco- based PG& E is asking a bankruptcy judge to clear deals with Canadian Solar Inc. unit Recurrent Energy and two energystorage providers to trim contract prices by at least 10%, saving the utility about $ 20 million, according to a court filing. PG& E is also asking state regulators to approve the changes.

The move may foreshadow what’s to come as PG& E’s bankruptcy throws the fate of $42 billion worth of long-term electricity contracts -along with California’s environmental ambitions -- into question. The prospect of the contracts getting killed has already rattled the power industry, which relies on longterm agreements to attract financing.

Judge Dennis Montali, who is overseeing PG&E’s Chapter 11 case, ruled in June that the bankruptcy court has sole determination over the agreements, thwarting an attempt by power generators to give the Federal Energy Regulatory Commission a say.

“The most important aspect here is the negotiation rather than the outright rejection of the power contracts,” said Andy DeVries, a utilities analyst with CreditSights Inc. “The agreement could indicate how PG&E plans to deal with its other power contracts going forward.”

PG&E fell 0.4% to close at $18.05 on Thursday. Canadian Solar rose 4.3% to $22.23.

Recurrent and the battery storage companies -Micronoc Inc. and EsVolta LP -- had asked PG& E to renegotiate their contracts to reduce uncertainty and eliminate financing risks, the utility said.