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PG &E Power Outages - Impact on Home Value?

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CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Certified Residential Appraiser
State
California
Yeah, the chaparral biome has nothing to do with it.

I meant,
will the electric company shut off the power this one time as a threat,

Or will you guys go through multiple power outages for the rest of the year as the electric company is claiming?

.
I was typing in a hurry and left out the high deserts and such.

I was thinking the same thing. Payback or threats from PGE. They want to know if people are more afraid of fire from hurricane force dry winds taking down power lines or more inconvenienced by going without power for a few days.
 

DTB

Elite Member
Joined
Jun 11, 2004
Professional Status
Certified Residential Appraiser
State
Illinois
Old growth is the redwoods. That's not where the devastating fires are. They're in the urban forests and the wilderness areas.

* Oh, you must have meant we didn't rake the forests.
Don't always be that guy.

 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
PG&E’s bankruptcy judge opens the door to rival chapter 11 exit plan
Published 2 hours ago

The judge presiding over PG&E’s bankruptcy handed shareholders a loss, opening the door to a competition over the best path out of bankruptcy that pits the troubled utility against bondholders led by Elliott Management Corp.
The bondholders proposed a plan to raise new money and use all but a sliver of PG&E equity to pay off debts.

Wonder who would buy a new stock issue of PG&E after exiting chapter 11 bankruptcy without immunity from inverse condemnation?

Equity Gets Smoked under Bondholder Plan, Even as PG&E Smolders

With PG&E already in bankruptcy, there was fear that Southern California Edison would follow suit, not to mention the threats from credit rating agencies to downgrade all Californian utilities if nothing was done. The new law is a complicated piece of legislation; in essence, it creates a $21 billion insurance fund for future fires, with $10.5 billion paid by electricity consumers, and an equal amount funded by the utilities. The new law will help pay for damages from future fires, but does nothing to pay for losses from the 2017-18 infernos.

The bond plan also calls for an end to exclusivity, or the exclusive right of a debtor (in this case PG&E), to file a reorganization plan. When a firm files for Chapter 11, it temporarily owns the strategically powerful and exclusive right to file its reorganization plan. Here, bondholders allege that PG&E is hopelessly insolvent and, despite six months of bankruptcy, still hasn’t proposed anything.

The proposed bond plan would pay unsecured note-holders between 98-99 cents on the dollar with new, secured debt. Wildfire claims would be deemed unimpaired and estimated at $16 billion, with a maximum cap of 15% more, and paid in full with cash. The plan would raise $31 billion, with up to $19 billion from a consortium of large bondholders. In return, those investors would get up to 95% of PG&E’s newly restructured equity when it emerges.

Separately, the debtor argues that ‘inverse condemnation’ laws, which made utilities strictly liable for wildfires their equipment caused, amount to an unconstitutional ‘taking of property’ which requires state compensation. They assert that this threshold issue must be resolved before PG&E gives anything to wildfire claimants. Thus, equity holders argue that the firm is totally solvent and that the stock should therefore just be reinstated, since all legitimate creditors remain unimpaired. Their argument is admirable, and likely the primary reason for PG&E’s current stock market value of $9.5 billion, even while in Chapter 11. The only other potential explanation is that shareholders expect Californian lawmakers to eventually bail them out. Either way, bondholders will surely join tort claimants to challenge any equity plan that reinstates their debts and they clearly own enough bonds and claims to block any vote, if proffered.

With the debtor’s estate afire, the Court has few options but to terminate the debtor’s exclusivity. Even so, the bond plan only serves as a starting point for negotiations among the many dueling classes of claims and interests. When the smoke finally clears, everyone but existing shareholders should do just fine. The final plan will most likely leave shareholders with nothing, as usually occurs in every Chapter 11. Having said that, a negotiated solution might give them an out-of-the-money right to invest cash into PG&E’s new stock, plus a stake in whatever damages their constitutional suit against California might eventually pay.

 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
Thank you Randolph.

Seems that if you're in the fire prone areas of CA, other problems are cropping up, for property values and investors.





Newsom signs California rent cap bill to protect tenants - Los ...

https://www.latimes.com › california-rent-cap-tenant-protections-signed

1 day ago - California will limit rent increases under bill signed by Gov. ... Had the rent cap been in place this year, rent increases in the Los Angeles area ...



Burt is gonna be working overtime with new algorithms.

Pity we can't say the same thing for CU.

Stip city coming soon.

.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
re-usage of CO2.
plants do that

California is a fire created ecology. Suppression of fire results in a build up of litter, sometimes several feet thick creating extreme fires. Redwoods require fire or the seeds won't even open and grow. It was that observation years ago that led to research that concluded you have to have fires. A healthy forest has less trees per acre than the typical forest now. Fire is much reduced, last year was 4,000,000 acres burned, much of it in Alaska and a lot of that here and elsewhere being controlled burns or natural fires allowed to burn in remote areas as a means to control future fires.

PGE is probably playing some hardball... protect us or we keep up this program of shutting down power. So depopulate a lot of the fire prone areas and take down the power lines, or subsidize PGE to build shorter, stronger lines with bigger poles closer together and subsidize them to clear the ROWs annually.
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
PGE is probably playing some hardball... protect us or we keep up this program of shutting down power.
As long as inverse condemnation can be applied to utility power distribution (substations, power lines, transformers, etc.), the only way NOT to be negligent is to power off, wait until the winds subside, and inspect all power lines, substations, and transformers along with fuel for fires. Then turn on the power.

At some point, politicians and customers of PG&E will see how futile that solution is.
 
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