Buffett-Backed Solar Farm Cut to Junk as PG&E Crisis Deepens
(Bloomberg) -- S&P Global Ratings cut the credit rating of Berkshire Hathaway Energy’s 550-megawatt Topaz Solar Farms to junk, noting that the plant counts on embattled utility giant PG&E Corp. for all of its revenue.
- S&P lowered ratings on Topaz Solar by five notches to ’B’ from ’BBB-’ and maintained the ratings on CreditWatch, meaning it may make further cuts.
- In downgrading Topaz’s credit, S&P said PG&E faces as much as $30 billion in potential liabilities from wildfires its equipment may have caused. “The downgrades underscore PG&E’s clout in California’s power industry, and any potential threats to the company can have wide-reaching ripple effects,” the rating company said in a statement.
- Fitch has already cut its own ratings for the farm because of PG&E’s fire liabilities.
- The downgrade is just the latest indication that PG&E’s financial woes are spreading to the companies that supply its energy. Banks are also studying whether they’re willing to put assets into a geothermal project that supplies the utility, people familiar with the situation say, and some small natural gas suppliers are restricting sales to the company out of fear that they won’t get paid.
- Earlier on Thursday, Moody’s joined the rating companies downgrading PG&E’s own credit to junk.
- A potential PG&E bankruptcy filing could put at risk a host of power-supply contracts signed by the utility. The company had more than 6 gigawatts of deals to buy wind and solar power from suppliers including Sempra Energy and Consolidated Edison Inc. as of January 2017.
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