EDITORS: Please do not use
"Pacific Gas and Electric" or "PG&E" when
referring to PG&E Corporation or its National Energy Group.
The PG&E National Energy Group is not the same company as Pacific
Gas and Electric Company, the utility, and is not regulated by the
California Public Utilities Commission. Customers of Pacific Gas
and Electric Company do not have to buy products or services from
the National Energy Group in order to continue to receive quality
regulated services from Pacific Gas and Electric Company.
AND ELECTRIC COMPANY ISSUES STATEMENT ON UTILITY FINANCIAL CRISIS
(San Francisco, CA)- Pacific
Gas and Electric Company President and CEO Gordon R. Smith today
issued the following statement in response to remarks by Standard
& Poor's on today's conference call:
"For months, California's
utilities, including Pacific Gas and Electric Company, have faced
a growing financial challenge, due to a badly broken wholesale power
market and price gouging by wholesale power sellers. In order to
ensure continued service to our customers during this time, Pacific
Gas and Electric has virtually exhausted its financial resources,
borrowing an average of $1 million per hour to pay for the power
we deliver to Californians. No company can continue to operate indefinitely
under such conditions.
"Standard & Poor's communicated
this message loudly and clearly this morning on a public conference
call with the financial community. S&P warned that utilities will
no longer be able to finance wholesale power purchases without clear
and definitive action from decision makers that ensures these costs
can be repaid. Citing the threat of imminent default, S&P said it
must see dramatic action by California decision makers within 24
to 48 hours in order to prevent a downgrade of the utility's credit
rating to 'deeply speculative' levels.
"Today's S&P conference
call sends a message to Governor Davis and California's leadership
that now is the time for action. We need to agree on a solution
that immediately addresses the problems created by the outrageous
actions of generators and marketers and the failure of the Federal
Energy Regulatory Commission to restrain them. However, the future
of California's economy cannot depend on when the federal government
acts. The solution to this problem is now in the hands of the Governor
and the California Public Utilities Commission. They ultimately
will determine if Pacific Gas and Electric Company can continue
to provide essential services to the 14 million Californians in
PG&E's service territory.
"It is astounding that only
hours after Standard & Poor's warnings, TURN and others are still
questioning the severity of this crisis and advocating steps that
will make the problem worse, including one proposal that S&P called
'devastating.' To its credit, the Public Utilities Commission removed
TURN's proposal from consideration at this time. With the severity
of the crisis facing California's utilities, the effort now is exactly
where it should be, namely on finding solutions, not continuing
to debate the existence of the problem.
"The time for pointing fingers
has passed. This challenge requires the utmost leadership from all
parties in order to find a solution."