The company said it has taken this action in light of its unreimbursed energy costs, which are now increasing by more than $300 million per month, continuing California Public Utilities Commission (CPUC) decisions that economically disadvantage the company, and because negotiations with Governor Gray Davis and his representatives have stalled.
¿We chose to file for Chapter 11 reorganization affirmatively because we expect the court will provide the venue needed to reach a solution, which thus far the state and the state¿s regulators have been unable to achieve,¿ said Robert D. Glynn Jr., chairman of Pacific Gas and Electric. ¿The regulatory and political processes have failed us, and now we are turning to the court.¿
He added, ¿Our objective is to move through the Chapter 11 reorganization process as quickly as possible, without disruption to our operations or inconvenience to our customers.¿ The utility serves about 13 million people in northern and central California.
Since June, Glynn stated, the company ¿has spent $9 billion in excess of revenues to pay for power for its customers, and exhausted its ability to continue borrowing, but there has been no progress on a plan to reimburse it for those expenditures.¿ Reorganization via Chapter 11 ¿is now the most feasible means of resolution.¿
The bankruptcy filing occurred just a day after Governor Davis proposed a plan to give utilities a share of a record rate increase that had been approved and to continue negotiating the purchase of utility transmission lines by the state.