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Pacific Gas & Electric emerges from bankruptcy

Pacific Gas & Electric emerged from bankruptcy protection, the energy company said Monday.
/ Source: Reuters

Pacific Gas & Electric Co. Monday emerged from bankruptcy protection three years after California’s energy crisis turned the lights out in the nation’s most populous state and crippled its major utility.

The company, a unit of PG&E Corp., said it made about 2,100 payments that resolved $8.4 billion in allowed creditor claims and deposited $1.8 billion in escrow accounts for disputed claims as part of its deal to emerge.

The utility filed for Chapter 11 bankruptcy protection on April 6, 2001 after California’s failed attempt at electricity market deregulation prevented the company from raising consumer rates amid soaring wholesale electricity prices.

“By resolving these financial challenges in a collaborative manner, we are able to move forward on a sound financial basis in a more stable regulatory environment,” PG&E Corp. President and Chief Executive Officer Robert Glynn said.

As part of the deal that allowed the company out of bankruptcy, the company said its investment grade credit rating was restored to help the utility finance infrastructure improvements and natural gas purchases to meet growing demand.

The settlement agreement approved by California regulators also provides an $800 million electric rate reduction for customers that was implemented in March.