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Utilityís bankruptcy could affect stateís energy-conservation plan

The Associated Press

April 29th, 2001

-------------------------------------------------------------------------------- SACRAMENTO -- Pacific Gas and Electricís bankruptcy filing could hurt the stateís efforts to encourage conservation with energy-efficiency rebates.

Some building contractors were supposed to be paid by the utility for things like installing energy-efficient windows. However, those rebate checks are now among $37 million in utility rebates and vouchers tied up in bankruptcy court.

The utility says the delay involves only payments that were pending when PG&E filed for bankruptcy protection April 6. Rebate applications and vouchers submitted after that date will be honored as before.

Cause for concern:But the California Public Utilities Commission says the issue is causing uncertainty over existing rebates as the state prepares to spend $110 million to encourage consumers to buy energy-efficient appliances, windows, lights, furnaces and air conditioners.

Bob Grandinetti, owner of Hallís Window Center in Sacramento, said the utility owes his company about $80,000.

"I have to front this money, wait for this money," Grandinetti said. "I canít demand 30-day payment; I have to accept their terms. And if I donít offer (the discount), Iím not competitive."

Hallís Windows is requiring its customers to agree to forfeit the discount if PG&E doesnít pay.

The Window Outlet in Woodland wonít provide the utility discount upfront at all -- but will reimburse the customer if and when PG&E pays.

Losing support:Office manager Gail Burton said six PG&E checks bounced April 17. Though the utility is advising businesses to keep offering the discounts, she labeled the program "a farce."

Home Depot salesman Devin Rachac said customers at his Folsom store are lured by the rebate offer to consider costly but high-efficiency appliances, but some worry theyíll never see the money.

PG&E gives rebates directly to consumers for buying Energy Star-labeled refrigerators, dishwashers and clothes dryers.

It gives consumers discount vouchers to take to any of 296 participating contractors who install energy-efficient windows, exterior doors with glass, and heating and air conditioning systems. Those contractors then send the vouchers to PG&E to be reimbursed.

That drums up business while helping the state and consumers during the energy shortage, contractors said.

"The consumer doesnít care what PG&E owes me," said Ed Atkins, owner of Comfort Master of Sacramento. "Why broadcast your bad laundry?"

He and other contractors said theyíll keep offering the discounts, hoping theyíll be paid eventually.

PG&E processed 14,283 vouchers the first three months of this year, compared to 30,417 all of last year. It has received applications for 1,383 appliance rebates in the first two weeks of the program that began in late March, but some of those rebates, like the contractor vouchers, are tied up in the bankruptcy proceedings.

Customers pay for the rebates and vouchers with a surcharge on their electricity bills, but PG&E lawyer Bob McLennan said the money has been frozen by the bankruptcy filing.

The utility will ask the bankruptcy judge at a May 16 hearing to pay the rebates and vouchers, McLennan said, but the judge could opt to make the money available to other creditors.

The uncertainty has left the California Public Utilities Commission unsure how to distribute $110 million in taxpayer money now available for energy-efficiency incentives, said Barbara Hale, the commissionís director of strategic planning.

-- Martin Thompson (, April 29, 2001


Response to PG&E bankruptcy could affect state’s energy-conservation plan

And the dominoes just keep on falling, as the cascading effects roll on and on. This type of chain reaction is just what was most feared in 1999.

-- Robert Riggs (, April 30, 2001.

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