Tag Archives: Daily Rundown

This is your SolarWakeup for January 29th, 2019

Inside The Board Room. When a $50billion corporation goes down to $5billion and that corporation has captured customers through a monopoly, there are billionaires that chomp at the bit to get involved. Read the tick tock on the funds that are trying to get in and get out without catching the falling knife (and get stuck in a regulatory change of heart). This comes while one hedge fund is arguing hard against the bankruptcy filing even as the CPUC approved the $6billion DIP finance plan late yesterday and a PG&E spokesperson confirmed to ABC that the company still intends to file for chapter 11 on or about today, the 29th. 

Exhibit A. Just in case you were wondering who is missing in the above conversation, it is the consumer. This shows the need for Governor Newsom to protect Californians from letting the financial interests be the sole driver of the process. Like it or not, this remains a political problem for Newsom and every other Governor that has an IOU in their State. 

Auto OEMs Need New Blood. I understand that the Cadillac Chief Marketing Officer needs to say that they are committed to both EV and ICE cars in the future. But they know, I hope, that the future is all EV except for non-standard use cases. The CMO should be secure enough to tell the story of the vision and excite consumers about the electric Cadillac Escalade. 

EIA Needs To Wake Up. EIA is out with a report about electric cars that says internal combustion will be the dominant vehicle mid-century. I am sure that EIA serves an important function but the estimating of future uses of electric vehicles is way off base for them. More importantly, how can they accurately forecast energy consumption if they view the future where transportation is still dominated by oil powered vehicles, not self driving electric drones?

Good Points. On the topic of environmental justice and why we need more Patagonias. Both worth a read this morning. 

Opinion

Have a great day!

Yann

 

This is your SolarWakeup for January 28th, 2019

PG&E Monday Update. Late last week, PG&E was cleared from last year’s Tubb Fire by Cal Fire’s investigation. This should clear much of the potential financial liability and is the reason behind the bump in the stock price. Note that much of the buying of the stock is by short term investors looking for the volatility, not the usual institutional investors seeking stable returns typical in utilities. Almost two weeks ago, PG&E notified the State that it would file for chapter 11 on the 29th of January. Whether this still happens is up in the air. Here’s a sidenote, this is a symptom of the monopoly utility model problem. IOUs were given monopolies by the States to access low cost private capital. If the IOU relies on their credit rating to provide a service to consumers, an IOU with junk credit isn’t deserving of the monopoly. For another option to utility business model, listen to my conversation with the CEO of Connexus Energy, a cooperative utility where the shareholder is the customer. 

The Joint Jurisdiction. Prior to the chapter 11 filing, NextEra asked FERC to get involved in case that PG&E were to try and cancel contracts with power producers, solar included. FERC responded by saying that those contracts are under the joint jurisdiction with the bankruptcy court. This bankruptcy isn’t a standard financial and legal because of the regulatory oversight at every level, keep that in mind when you read the headlines. 

Newsom’s Next Move? Newsom should look towards FERC as the precedent for increasing his seat at the table. I realize that this is a political problem that was not planned for (or warranted some might say) and may be an issue that his administration would rather leave in the bankruptcy courts and at the CPUC. However, with the future of decarbonization in play, a worried set of labor unions and lives at stake, Newsom can still appoint a special cabinet position to ensure that the State of California and the consumers have a say in the process. Who will brief the governor and the legislature about the internal process? Who will ensure that consumers don’t get the short end of the stick? This week I will outline how I see this playing out, not just for PG&E but every integrated IOU in the Country. 

If You Know Robo. You know that the following statement, said during the NextEra earnings call, would have gotten you banned from the executive building if said out loud just ten years ago. But this is a direct quote from NEE CEO Jim Robo, “We continue to believe that this [solar plus storage} will be massively disruptive to the nations generation fleet and create significant opportunities for renewable growth well into the next decade.” 

Thank You Solar and Senator Reid. The US is exporting oil, which is solely due to the removal of the oil export embargo. And for that, you have to thank Senator Reid and solar because that was the trade for the ITC extension.

Opinion

Have a great day!

Yann

 

This is your SolarWakeup for January 25th, 2019

Back For More Solar News Monday. Have a great weekend! 

  1. Catch my conversation with PVEL CEO about module reliability
  2. Get your tickets for SolarWakeup Live! Boston at solarwakeuplive.com

Opinion

Have a great day!

Yann

 

This is your SolarWakeup for January 24th, 2019

Sunedison! Sunedison is back on the New York Times pages with a story about fees paid to McKinsey in relation to the restructuring at the end of the corporation’s life. Reading between the lines it looks like a bit of PR battling by the solar restructuring firms and I wouldn’t be surprised if shareholders and debt holders were taken for a bit of a ride. 

Finance Woes? The US is going to build around 10GW this year and there will continue to be more capital than solar projects. A balance between finding the deals and paying the right price goes agains the need to deploy capital and at times that means making deals work just to get money out the door. Moreover, the PG&E situation and lack of some long term contracts will increase the cost of debt and equity in the solar space as developers look for capital to take bigger risks. The solar market will remain hot and projects will get done but at this very moment the cost of capital will bend the wrong direction, momentarily. 

Pipeline Wins Again. Cubico is a renewable IPP that is part bankers and backed by tremendous pension fund capital. The mandate was to deploy hundreds of millions per year and get good return in stable investments and Cubico looks to have found that in the Cypress Creek pipeline. 

Save Us. A new poll is out with interesting data on Americans support for a carbon tax. 44% of the respondents said they support the tax/dividend. While the group of economists that are supporting the initiative are looking for the tax to be returned to taxpayers as a refund, most Americans prefer the money to be used to fund initiatives that invest in nature and eco-restoration. Second in line comes renewable energy R&D at 59%. 

Water Plays. Is there a point when water consumption comes in play for power players and gas drilling? If so, when and where is it most likely to create a regulatory barrier for market participants? 

Opinion

Have a great day!

Yann