California's electricity crisis entered a new phase of open combat yesterday when the state's largest utility, Pacific Gas and Electric, suddenly declared bankruptcy, blaming Gov. Gray Davis for delaying negotiations. The bankruptcy filing halts attempts to collect debts from the utility as a judge begins a process that some think could be lengthy, with an uncertain outcome. The utility filed for protection under Chapter 11 of the federal bankruptcy law, which means it plans to reorganize and pay off its debt over time.
Creditors form committees under the bankruptcy process to represent their interests.
Angry consumer groups said they will form a committee of their own and attempt to become part of the process. Senate Energy Committee Chairwoman Debra Bowen, D-Marina del Rey, a lawyer who worked on the Chrysler bankruptcy, predicted one benefit of the bankruptcy will be that generators accused of gouging California will not get full payment. The governor, who used the televised address to drop his opposition to a big rate increase and propose one of his own, was not happy to learn that he has lost his battle to keep the utilities out of bankruptcy. He appeared earlier at an Escondido elementary school, where he praised student conservation efforts. Davis said he planned to attend a previously scheduled meeting yesterday afternoon with John Bryson, Edison's top executive, to work on the final issues in the purchase of its transmission system.