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Valley Clean Energy offers $300 million for PG&E infrastructure in Yolo County

The electricity provider joins the list of agencies seeking energy independence in the wake of wildfires and power shutoffs.

YOLO COUNTY, Calif. — The board of clean power agency Valley Clean Energy (VCE) has submitted a bid to purchase Pacific Gas and Electric's (PG&E) power lines, poles, and other assets within Yolo County.

VCE currently provides power to more than 150,000 residential and commercial electricity customers in Yolo County but relies on PG&E to distribute that power. The $300 million bid would enable VCE to create Yolo County's own locally owned and operated public utility.

This is not the first time Yolo County energy customers have seemed poised to leave PG&E behind. In 2006, Sacramento and Yolo County voters nixed a proposal to have Sacramento Municipal Utility District (SMUD) annex territory in Yolo County. The annexation would have meant 70,000 customers in Davis, West Sacramento, Woodland, and other parts of Yolo County would have dropped PG&E's service and switched to SMUD.

RELATED: Gov. Newsom wants to 'broker' bankruptcy deal for PG&E, a campaign donor

PG&E spent $10 million to successfully quash the takeover in 2006, but it seems that the utility company is once again on the chopping block for Yolo County residents.

The combination of deadly wildfires caused by PG&E equipment, power outages and shutoffs, and a Chapter 11 bankruptcy filing in January 2019 has not only sparked outrage among customers wanting to hold PG&E responsible, but has also opened avenues for companies like VCE to create their own locally-based public utilities.

In fact, VCE is just one of several groups to direct its energy towards purchasing electricity distribution assets from one of the largest combined natural gas and electric energy companies in the U.S. The city of San Francisco proposed a $2.5 billion offer on Sept. 9 to purchase PG&E infrastructure within the entire San Francisco County area, but PG&E rejected the offer.

On Sept. 3, the South San Joaquin Irrigation District (SSJID) also tried to buy PG&E electric assets to the tune of $113 million. For the South San Joaquin agency, this is just the most recent offer in a 15-year attempt to takeover PG&E. 

A similar 2016 offer was previously rejected and the entities are now tangled in two active court cases as SSJID continues to seek energy independence.

READ ALSO: Northern California families define their 'new normal' amid power shutoffs, fires

Like the City of San Francisco and SSJID, VCE hopes to create a safer, more efficient electricity system should the bid be accepted.

In a press release announcing the offer, the company wrote, "Purchase of the local PG&E power poles and lines would allow for the creation of a Yolo County-based public utility similar in nature to those found in Lodi, Roseville, Sacramento (SMUD), and other communities across the state."

Efforts to break from PG&E are also supported by recent statements from Gov. Gavin Newsom, encouraging local jurisdictions to acquire PG&E's local electric lines and infrastructure.

However, PG&E has been reluctant to sell any portion of its system.

In an Oct. 7 letter to San Francisco officials after rejecting their offer, PG&E CEO Bill Johnson wrote, "Our financing strategy to emerge from bankruptcy does not envision selling off company assets. We believe we can resolve and fairly fund all claims and other items through conventional financial markets."

Even if VCE's offer were accepted, there would be even more hoops to jump through. The proposal would ultimately need approval from the federal court handling the PG&E bankruptcy case. Then, VCE would have to smoothly transition customers from the investor-owned PG&E model to a municipally-owned utility.

Still, VCE is optimistic that acquiring PG&E's infrastructure would mean positive changes for Yolo County electricity customers.

“The transfer of PG&E’s electricity assets will aid PG&E’s financial stability and contribute to fire victim recovery settlements while helping Valley Clean Energy expand upon its efforts to provide reliable, safe, clean and affordable electricity to the residents and businesses of Yolo County,” VCE Vice Chair and Yolo County Board of Supervisors member Gary Sandy said in the press release. “Bottom line, our offer makes financial and environmental sense.”


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