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California Utilities Near Bankruptcy

ROSEMEAD, CA — Two of California’s major investor-owned utilities are struggling to avoid bankruptcy. Southern California Edison (SCE) may be forced into involuntary bankruptcy by a number of creditors. Recently, the state legislature adjourned for the year, but did not act on a $2.9 billion bailout plan for SCE.

California Governor Gray Davis has called a special session, and the utility is hoping that the creditors will wait until the special session ends so that a plan can be worked out.

Also, Pacific Gas & Electric (PG&E) filed a reorganization plan with the bankruptcy court in order to split from its parent. The utility’s creditors are supporting the plan and are allowing the utility to pay all claims in full. This includes $13.2 billion in cash and new debt from refinanced assets. PG&E are hoping to complete the reorganization by the end of the year.

Publication date: 10/08/2001

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