Posted on Thu, Dec. 18, 2003
State regulators approve PG&E bailout
MICHAEL LIEDTKE
Associated Press
SAN FRANCISCO - State power regulators cleared the way Thursday for Pacific Gas & Electric Company to end nearly three years of bankruptcy by approving a multibillion dollar bailout to be paid mostly by the utility's customers.
The California Public Utilities Commission's approval, by a 3-2 vote, positions PG&E to realize its goal of emerging from bankruptcy early next year. The state's largest power utility has been stuck in bankruptcy since April 2001 when management sought refuge from the soaring electricity costs of a California power crisis.
The bailout will give PG&E customers a rate reduction of at least $670 million next year, but at a potentially steep cost.
The deal locks in abnormally high electricity prices in Northern California for the next nine years and contains provisions obligating state regulators to protect PG&E's profit margins and credit rating, even if it requires more rate increases.
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