BANKRUPT utility asks judge to approve $25.5 million in worker bonus, severance packages
Saturday, May 26th 2001, 12:00 am
By: News On 6
SAN FRANCISCO (AP) _ Bankrupt utility Pacific Gas and Electric Co. sought court permission Friday to pay about $25.5 million in employee bonuses and severance packages to boost sagging morale and assure reliable service.
The San Francisco-based utility wants U.S. Bankruptcy Judge Dennis Montali to approve several different payment plans to deliver to 1,250 workers during the next two years.
The requests include a $17.5 million program designed to encourage about 226 top managers to remain with the company and $2 million in bonuses for the ``superior work performance'' of 1,000 workers before the utility's April 6 bankruptcy filing.
PG&E also wants to pay $5 million in previously promised payments to 31 managers working at power plants the utility sold after California deregulated its electricity market in 1996. The utility said the California Public Utilities Commission approved that plan in February.
Another $1 million would be paid to 10 workers that the utility plans to lay off this year. The severance packages are consistent with PG&E's policy before its bankruptcy.
In the court papers, PG&E said that 199 administrative and technical workers laid off last year received an average $97,000 severance, even as the utility sank deeper into debt buying electricity on the wholesale market.
The requested bonus and severance package would be given to about 6 percent of PG&E's 19,950 workers.
The bankruptcy court is scheduled to hear the matter June 18.
The planned payments are modest compared to the billions of dollars that PG&E owes to tens of thousands of creditors in the biggest utility bankruptcy in U.S. history.
PG&E's petition drew fire from consumer critics, who for months have argued that the utility's management could have avoided the company's financial crisis if it had reacted more swiftly to changing conditions in the power market.
``I'm not so sure that PG&E had such an outstanding performance leading up to the bankruptcy. This is getting pretty ridiculous,'' said Michael Florio, senior attorney for The Utility Reform Network, a San Francisco consumer rights group.
The night before filing bankruptcy, the utility transferred $50 million in bonuses and raises to 6,000 workers. At the time, management said it wanted to assure its employees received adequate paychecks before the company plunged into the uncertainty of bankruptcy court.
If the newly requested bonus plans aren't approved, the utility warned that the company and, ultimately, its customers will suffer.
``The loss of important personnel due to economic uncertainty or sagging employee morale may threaten PG&E's continued provision of safe, reliable and responsive service to its customers and jeopardize its reorganization efforts,'' the utility said in its brief.
However, Florio questioned how likely employees are to leave the utility.
``It's not like the utility is in danger of going away. The management keeps insisting that the company is solvent and will continue to be so,'' Florio said. ``I don't get the sense that any of those workers are rushing for the door right now.''