California utility Pacific Gas & Electric (PG&E) has asked the judge overseeing its bankruptcy case to support restructured deals with some of the utility’s power suppliers in an effort to reduce the price PG&E pays for those companies’ electricity.

The fate of $ 42 billion worth of long-term power purchase agreements (PPAs) is a key component of PG&E’s bankruptcy and is being closely watched by the power industry, which relies on long-term power contracts to attract financing.

PG&E’s court filing comes just weeks after California Gov. Gavin Newsom signed into law a measure to create a $ 21 billion state wildfire fund, designed to help the state’s three investor-owned utilities pay for damages resulting from wildfires in the state.

Allan Marks, a partner in the Los Angeles office of global law firm Milbank LLP, working in Milbank’s Project, Energy and Infrastructure Finance practice, told POWER, “In general, [the wildfire fund] is designed to provide liquidity if utilities aren’t able to handle wildfire claims without becoming insolvent.”…

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