PG&E emerges from bankruptcy; consumers face billions in higher charges
SAN FRANCISCO (AP) _ Pacific Gas and Electric Co. is back in business after three years in bankruptcy, finally rising above one of the lowest points in California's power crisis.
The 99-year-old utility became solvent Monday after distributing $10.2 billion to hundreds of creditors owed since it went bankrupt on April 6, 2001, near the height of an electricity debacle marked by rolling blackouts and recurring episodes of market manipulation.
The rehabilitation is expected to cost PG&E's 4.8 million electricity customers $6.2 billion to $8.2 billion in above-market prices through 2012. That works out to an average of $1,300 to $1,700 per customer.
San Francisco-based PG&E started out with more than $12 billion in debt that had piled up as the cost of wholesale electricity soared beyond the retail prices established under regulations introduced in 1998.
Declaring bankruptcy triggered even more bills. PG&E's legal and professional expenses totaled $412 million through December, the most recent accounting available. The utility also is responsible for $23.2 million in bills run up by the California Public Utilities Commission during the case.
Bankruptcy also has marred the reputation of PG&E, said Lynn LoPucki, a UCLA law professor who followed the case. ``It was an extremely embarrassing episode,'' he said. ``The company's public image abruptly changed with the filing.''
PG&E simply was looking out for its best interests, said Dan Richard, the company's senior vice president of public affairs. ``I don't think we had any other choice,'' he said in an interview Monday. ``Our company was being melted down'' as its daily losses surpassed $10 million.
That trend began to reverse shortly after PG&E filed bankruptcy as wholesale power prices began to plummet. Through February, the utility had earned $4.8 billion on revenue of $30.7 billion since the bankruptcy filing.
PG&E blames most of its additional costs on long-term electricity contracts that California signed shortly after the utility went bankrupt.
Even so, many customers are taking out their frustration on PG&E, Richard acknowledged.
``A lot of customers are still angry about what happened,'' he said. ``It will take a while to heal. I think we will always view (the bankruptcy) as a difficult and challenging time in our history.''