Clearway Energy Inc., among the largest publicly-traded owners of US renewables capacity, is moving to diversify its portfolio away from California as it braces for a potential hit from the bankruptcy of utility PG&E.

Two weeks ago Clearway slashed its dividend, lowered its 2019 guidance, and warned investors of a potentially bumpy road ahead, as it waits to see whether PG&E will try to renegotiate or wiggle out of its power-purchase agreements as part of its bankruptcy proceedings.

A number of major US renewables operators face the same uncertainty, NextEra Energy and Consolidated Edison among them, but few have more exposure to PG&E and to California more broadly than Clearway.

While Clearway and other companies have said they expect PG&E to stand behind its PPAs, unanswered questions about market structures and where liability will fall for future climate change-related wildfires threaten to cast a pall over California’s enormous renewables market.

Clearway has 1.2GW of generating assets under contract with PG&E, including gas-fired facilities. The utility’s bankruptcy has already triggered defaults for some of Clearway’s project-level financing arrangements.

Going forward, “if [the development team has] the ability to look outside of California on an equivalent basis, they would tend to do so”, Clearway chief financial officer Chad Plotkin told analysts this week.

Given the size of the state’s electricity market and its ambitious renewables targets, “it’s a little bit tough to say you don’t want to be in California”, Plotkin added, noting it’s “where a lot of the assets and PPAs are”.

That said, “if there’s a project outside of California that has identical PPA tenures, identical risk and IRR, we would tend to want to invest that dollar outside of California versus within it”.

Clearway, formerly known as NRG Yield, has the right of first offer (ROFO) on projects coming out of its sponsor company – the similarly named but privately owned Clearway Energy Group, itself backed by Global Infrastructure Partners.

Clearway’s current ROFO list skews towards Texas wind projects, including the 419MW Mesquite Star wind farm due for completion next year and a 283MW repowering of the Wildorado and Elbow Creek wind facilities.

Nearly half of Clearway’s more than 3GW renewables portfolio is today located in California, including the 947MW Alta wind project – the largest US wind farm in operation – and the 250MW California Valley Solar Ranch.

Clearway put up solid growth numbers in 2018, including boosting cash available for distribution by 8% to $291m. CAFD is a critical metric for yieldcos, which return much of their cash flow to investors through dividends.

But the company issued a lower 2019 CAFD guidance of $270m, and has reduced its dividend at least temporarily, as it waits to see how PG&E’s bankruptcy plays out – a potentially years-long process.

Clearway shares are trading near a multi-year low, at around $14.67.