A bankruptcy judge in San Francisco has given Pacific Gas and Electric the OK to purchase electricity for the first time in nearly two years.
P G & E is expected to begin purchasing power on January first. Yesterday – U.S. Bankruptcy Judge Dennis Montali approved the company’s request to post up to $150 million in collateral with the California Independent System Operator. The ISO manages the state power grid. PG & E has to put up the money because its credit rating is still below investment grade. The state stepped in as official buyer of power on the wholesale market in February of 2001. That came after P G & E and Southern California Edison’s credit ratings sank so low that power sellers wouldn’t do business with them. Edison also has to put up collateral.
P G & E filed for bankruptcy in April 2001 after months of paying soaring wholesale power prices out of its own pocket while the retail rates of customers were frozen.