Friday April 6 12:40 PM ET Pacific Gas & Electric Seeks Bankruptcy

NEW YORK (Reuters) - Pacific Gas & Electric Co., which is California's largest investor-owned utility and has been struggling with that state's power crisis, said on Friday it filed a voluntary petition for bankruptcy protection with the U.S. Bankruptcy Court for the Northern District of California.

Trading was halted in PG&E shares on the New York Stock Exchange (news - web sites) before the filing. They last traded at $11.36, down 2 cents.

The Chapter 11 filing was disclosed in mirror filings by the utility and its parent, San Francisco-based PG&E Corp. (NYSE:PCG - news), with the Securities and Exchange Commission (news - web sites).

The utility said in the filing that it ``retains control of its assets and is authorized to operate its business as a debtor in possession while being subject to the jurisdiction of the Bankruptcy Court.''

A 1996 state utility law deregulated wholesale prices but capped retail prices. Pacific G&E has said it accumulated more than $8.9 billion of back debts because a rate freeze prevents it from passing on its soaring wholesale power costs to consumers. http://dailynews.yahoo.com/h/nm/20010406/bs/pge_bankruptcy_dc_1.html

-- Carl Jenkins (somewherepress@aol.com), April 06, 2001

Answers

It was inevitable. The question is how soon the other shoe will drop- SoCal-Edison. Swissrose.

-- Swissrose (cellier3@mindspring.com), April 06, 2001.

Edison Execs Meet On Options After PG&E Filing

By Jason Leopold Of DOW JONES NEWSWIRES LOS ANGELES (Dow Jones)--Edison International (EIX) executives are in a closed door meeting Friday to discuss the utility's options following PG&E Corp. (PCG) unit Pacific Gas & Electric's decision to file for bankruptcy protection.

A spokesman wouldn't say whether Southern California Edison would also seek the protection of bankruptcy law. But the spokesman said the prospects of a negotiated settlement with the state now appeared to be lost following PG&E's filing.

The company should have a statement shortly after the meeting on steps its utility unit, Southern California Edison, will take regarding its negotiations with the state, the spokesman said.

-By Jason Leopold, Dow Jones Newswire; 323-658-3874; jason.leopold@dowjones.com (END) DOW JONES NEWS 04-06-01 01:15 PM

-- PHO (owennos@bigfoot.com), April 06, 2001.

So I guess this means that all the money they owe the suppliers (who were forced to supply them by the feds) does not have to be paid and the suppliers are screwed. Or does the new bankruptcy laws change this scenario? I think under the new law they still have to pay but can make a long time payment plan. Either way I smell big trouble ahead in the not so distant future. This could cause a major domino effect of closures. What do the suppliers do when THEY run out of money? Reliant Energy is my natural gas supplier here in Texas and also supplies or supplied the big guys in California and is why I think my gas bill is up around a 1000% of last year. We may be o.k. through the summer but I think this next winter will be hell for the suppliers AND the consumers. Like there may not be anyone to supply the bigwigs after the suppliers are broke. Even IF you can afford a 2000% increase there may not be anyone left for you to buy it from. I guess we'll find out NdewTyme.

-- NdewTyme (NdewTyme@NdewT.com), April 06, 2001.

As I see it, the consumers of the supplier states around California just got screwed. They're going to have to pay for California's fiasco now.

The residents of California just got screwed because now the utilities won't have to pay back billions of dollars from the state.

The residents in California are going to get screwed again when other states won't sell to them again, the bail out fails, business starts abandoning the state, S & P reduces their rating, and so on.

All this because voters thought they could could control cost the same way the Federal Reserve controls money. By this time next year California will add new meaning to the phrase "welfare state"

-- Tom Flook (tflook@earthlink.net), April 06, 2001.