American Politics Journal -- Yet Another Nail in the Dereg Coffin

American Politics Journal

Yet Another Nail in the Dereg Coffin
PG&E's Parent Company Paid Out Millions in Bonuses Hours before the California Utility Filed for Chapter 11 Bankruptcy
By Tamara Baker

Monday, April 9, 2001 -- SAINT PAUL, MINNESOTA -- The energy wholesalers of America really must take us for a bunch of idiots.

I mean, really: first, they push for deregulation in places like Northern California, then buy up or create private utilities which are their wholly-owned subsidiaries, then they charge obscene prices to their own subsidiary utilities for the energy they provide them, all as a way of eventually extorting record sums of money from you and I, the ratepayers.

(Oh, and along the way, they cripple the manufacturing sector of the deregged portions of the country, thanks to their extortionate energy fees, thus helping to propel this country into economic meltdown. But since energy wholesaler kingpin Enron is George W. Bush's biggest lifetime donor, don't expect him to anything sensible, like impose price ceilings on what energy wholesalers can charge.)

Last week, Pacific Gas & Electric, in what one consume activist described on NPR Friday afternoon as a "temper tantrum", filed for Chapter 11 in an effort to show the American public just how "dire" is the financial status of California's poor old maligned deregged utilities. No sooner did that story hit, however, than another bit of news came out, news that gave the lie to PG&E's poverty act:

PG&E gave out bonuses hours before bankruptcy

April 8, 2001 | SAN FRANCISCO (AP) --

The parent company of a California utility awarded about 6,000 bonuses and raises to midlevel managers and other employees hours before the utility filed for bankruptcy, a newspaper has reported.

PG&E Corp. Chairman Robert Glynn issued an internal memo late Thursday announcing the bonuses and raises for eligible employees of Pacific Gas and Electric Co., the San Francisco Chronicle reported Saturday.

Now, remember:

Whenever anyone asks the question "Why don't the parent companies of these deregged utilities either pay off their debts or scale back the outrageous prices they charge their subsidiary utilities for electricity?", the parent companies' standard response is that this is Simply Not Done, that the parent and the subsidiary are Two Separate Companies, that the Heavens would Cave In, yadda yadda yadda. Apparently, giving money to a subsidiary company to keep it from declaring Chapter 11 is a big no-no.

Yet, if that is the case, how come paying out millions in bonuses to the employees of that same subsidiary is perfectly OK?

Someone help me out here.

This bonus issue is so stinky that at least one California Republican official is condemning it. In the AP story referenced above, state Assembly Republican Leader Dave Cox said that the bonuses-and-bankruptcy incident is disgraceful to the state's ratepayers: "Declaring bankruptcy and at the same time providing increases and bonuses for employees would just be in your face to the consumers of the state of California," he said.

Yet another nail in the dereg coffin.



Home • Latest • Archive • Search