NextEra Energy (NEE +0.9%) moves to protect its contracts to sell power to PG&E Corp. (PCG +1.9%) before the California utility files for bankruptcy protection, asking the Federal Energy Regulatory Commission to step in and rule that PG&E cannot “abrogate, amend or reject” any of the terms of its power purchase agreements.
PG&E counters with a filing that says FERC should reject NEE's request because doing so would “violate both the Federal Power Act and the Bankruptcy Code and also would contravene the terms of the agreements.”
“The legal history is mixed on FERC’s priority over bankruptcy courts,” says Bloomberg analyst Stephen Munro.
NEE's filing is a preemptive move that has been noted across the U.S. power industry; a who’s who of energy companies have filed comments about the issue with FERC, including BP, Consolidated Edison (NYSE:ED), Dominion Energy (NYSE:D), Exelon (NYSE:EXC) and NRG Energy (NYSE:NRG).
NEE and NextEra Energy Partners (NEP -0.9%) sell solar and wind power to PG&E through eight subsidiaries.
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