California utility goes to bankruptcy court
By Todd Chretien and Jenna Woloshyn | April 13, 2001 | Page 2
SAN FRANCISCO--California took one giant step towards a full-scale electricity meltdown in early April when the state's largest private utility declared bankruptcy. Pacific Gas & Electric (PG&E), which serves 13 million northern California customers, claims that it's nearly $9 billion in the red. Because of a 1996 deregulation law, PG&E is paying huge sums for wholesale electricity from out-of-state providers that have jacked up prices.
But it's pretty dishonest for the utility to claim bankruptcy. PG&E split itself into two "corporate entities." The "utility" is deep in the red. But the power-producing "corporation" is a $30 billion giant, with power plants all over the U.S. And just hours before filing for bankruptcy, PG&E transferred millions of dollars in bonuses into its executives' bank accounts. Union workers didn't get a dime.
The day before PG&E filed for Chapter 11, California Gov. Gray Davis went on statewide TV to lay out a bailout plan that would essentially drain the state budget to funnel $50 million a day into PG&E and other utilities. He broke a promise that he's repeated every day for the last three months--and backed a proposed 46 percent rate hike.
But that wasn't enough for PG&E. Smelling weakness, the company decided that it was time to go to bankruptcy court --where a federal judge could order the state to allow PG&E to charge consumers whatever it wants.
"More and more, you get the feeling that all 34 million Californians are working and living with the sole goal of paying off a tiny handful of energy gangsters," the Green Party's Medea Benjamin told Socialist Worker. "Money that was marked to go to schools, road repair, health programs, beach cleanup and on and on, is literally being shoveled out of the state treasury into PG&E and Enron and Duke's piggy bank."
A small but potentially powerful movement is posing an alternative to Davis' surrender. On April 3, 50 activists organized by the Campaign for Public Power turned out for a Public Utilities Commission hearing in San Francisco to berate its members--who are Davis' appointees--for implementing the 46 percent rate hikes.
The Campaign is organizing a "Don't Pay in May" initiative, urging people to withhold their May utility bills and demand a state takeover. It's time to step up the fight to make the energy companies pay for the mess they made.