PG&E bailout puts burden on consumers - Judge approves plan -- state has final say

SFGate.com ^ | 12/13/03 | Bob Egelko - SF Chronicle

[NormsRevenge]

A plan that would lift Pacific Gas and Electric Co. out of 2 1/2 years of bankruptcy and require consumers to bear most of the utility's $12 billion-plus debt load won approval Friday from a bankruptcy judge, leaving its fate to state utility regulators.

[NormsRevenge]

.

[OPS4]

Someone had better go get the money back that was shipped out of the country by the former directors of this company.

Last I read it was shipped over to European Banks, while Gray Davis watched.

Ops4 God BLess America!

[mvpel]

Another item in the long list of "Why My Wife and I Moved to New Hampshire."

Add this $12 billion to the $38 billion the State will be billing Californians for, and you get a nice round $50 billion saddle on the broken-down horse that is California's economy.

No wonder a bottle of California wine in a New Hampshire state-run liquor store costs less than it does in a California supermarket.

[Carry_Okie]

No wonder a bottle of California wine in a New Hampshire state-run liquor store costs less than it does in a California supermarket.

Now now, maybe for a name label, but when yer in the know there are great deals to be had. I just procured a case of head-pruned, old vine, dry farmed zin that would knock yer socks off for $7.29 a bottle.

Beat that expat. ;-)

Besides, where better to fight socialism than on its home ground? Gotta know yer enemy to gut him from within.

[Amerigomag]

Here's what should be done and what will be a very unpopular opinion.

The bailout should should be shared by everyone.

$6B from the general fund. That's $6B that can't be spent on utopian social programs.

$6B remains the responsibilty of the consumers, spread across ALL utilities in California that are under the jurisdiction of the PUC.

Last but not least, PG&E goes back to the quasipublic status it held before deregulation.

[Wally_Kalbacken]

Unfortunately sovereign immunity protects the state from the shareholders of PG&E who had to watch $billions of equity eaten by a state regulatory scheme that required them (the utilities) to pay more on the wholesale market for power than they were allowed to charge. There was no management, no imaginable strategy that could have broken even in that setting, with those rules.

In any other industry you would have seen Elliot Spitzer and a thousand other advocates going after the perpetrators. But in this case it was the Legislature of CA and two of its Governors who created a structure in which, by my recollection, nearly $8B in shareholder equity was vaporized. But this is the utility business and all logic is inverted once you enter the realm of its regulatory environment.

[Wally_Kalbacken]

It really makes you wonder if an analysis of the costs (net social costs) of going out on the market and buying power at those ridiculous spot prices back in Summer of 2001 wasn’t perhaps 2-3x as expensive as the consequences of power interruptions that would have been necessary if there had not been an obligation to supply, regardless of the losses to the utilities. Someone has to have done an analysis of this by now…

[SierraWasp]

I got polled on this last Friday! I was so suspicious that I almost drove the polling lady nuts trying to find out who/why/what interest had commissioned the poll!

It started out with very general questions on how I felt about large corporations in general and asked stuff like did I think they should be REQUIRED to "give back to the community" to help those who had so many "crying un-met needs," etc.

I must tell you my gag reflex was in high gear and I almost hung up at one point. But I just couldn't till I figured out who was promoting this poll!!!

Finally, she gave it away while asking me what my perception was to a list of about 10 major CA corporations and one was PG&E. Oh boy!!! I said, OK! Now let me tell ya what I REALLY think!!!

Anyway, it looks like they're going for the "Court of Public Opinion" since they haven't gotten anywhere with the legal system and the PUC.

All the "CA Energy Crisis" threads we all went through together really added to my vehement opinions I laid out for her to record. The poll was to selected community "leaders" and somehow they got cornfused and called me.

Thanks Norm for posting this. It sure is timely!!!

[snopercod]

They don't call 'em Pacific Graft & Extortion for nothing!

[snopercod]

The utility's rates, already among the nation's highest at that time, were raised an additional 40 percent by PUC emergency orders in January and March 2001.

That is not my recollection. PG&E and SCE asked for an emergency rate increase in December 2000, and it was denied. IIRC, the emergency rate increase was only granted after PG&E had declared bankruptcy.

[mvpel]

Hi Mark!

We made it out here successfully, still haven't gotten the photos from our trip up on the webserver, but we'll get to it.

The only problem with staying on the home ground to fight socialism and gutting your enemy from within is that he's already in the process of gutting you from within.

[SierraWasp]

Aw chit! And here I thought it was "Pigs, Goats & Elephants!"

[Ernest_at_the_Beach]

ROFL!

What a trip following the California Power Crisis!

Thanks for posting this Norm!

[Ernest_at_the_Beach]

Trying to remember all the names on the ping list!

Guess they might want to hear about this.

[Mad_Tom_Rackham]

How's it going Ernest? I read this in the SF Chronicle. Not surprised by it, though. What IS surprising me is Arnold's fast turn to the left. When the CA Dims announce that they are satisfied with their "agreement", you can bet we are being bent over big time. Thus there will be NO spending cuts, and they will paper over the debt for 15 years and wait for future tax revenues to pay it off. Simply disgraceful and extremely irresponsible. Tom McKlintock said he would force the cancellation of the overpriced energy contracts, but not a peep from Arnold. IMO he is not ready for prime time.

[tubebender]

There are so many ambiguities on both sides in this article that my head is spinning. Doofus (remember him) made a giant mistake when he didn't call the bluff of the gougers and just let the damn system tank. It would have been short lived because what in the hell can you do with day old electricity...

[SierraWasp]

"because what in the hell can you do with day old electricity..."

That is the obvious that Dufus and all the other politicians and even most citizens are oblivious to. It's what makes the power markets different from any other marketplace and skews all the usual "fixes" that non-industry people never grasp.

Time is of the essence and the essential ingredient. That's why I prefer hydro because it's like a giant battery that comes as close to days old electicity as man and nature can provide. Everything else requires ramping, etc.

Ol Robert357 and snopercod were always good on the technicalities.

[Ernest_at_the_Beach]

Doing OK!

[snopercod]

PG&E bailout puts burden on consumers

People are so stupid. Where else could the burden of paying for electricity be placed?

People in Kali still seem to think that there IS a free lunch, and that "business", or "the government" will somehow pay for what they need.