PG&E Bouncing Back From Fiscal Brownout

The state's largest utility is on the rebound with a focus on its core business -- providing power at regulated rates in Northern and Central California -- while trying to bolster its financial health, improve service and secure enough electricity for customers.

A lack of power supplies in 2000 and 2001 helped trigger the energy crisis "and drove both us and [Southern California] Edison to financial distress, drove us completely to our knees," Peter A. Darbee, the new chief executive of the company's San Francisco-based parent, PG&E Corp., said Friday at an investor conference in New York.

It was "a situation we don't want to revisit and are committed to ensuring never happens again," Darbee said in his first appearance before analysts and investors since being named CEO in December.

But PG&E still has its doubters.

"We would agree that they can do a whole lot better, and the proof will be in the pudding," said Bob Finkelstein, executive director of the Utility Reform Network, a consumer advocacy group in San Francisco. "We've heard things like this before."

The utility, which turns 100 this year, serves 4.9 million electricity customers and 4.1 million natural gas customers. Overall, PG&E Corp. has 20,200 employees and generated revenue last year of $11.1 billion.

The utility, but not the parent company, filed for Chapter 11 bankruptcy reorganization in April 2001 after running up $9 billion in electricity debt during the energy crisis.

PG&E's National Energy Group, the company's venture into the less regulated world of energy trading and independent power-plant building, filed for bankruptcy protection in July 2003. The subsidiary, which was slammed by a prolonged slump in power prices, subsequently was jettisoned.

Now, PG&E is "a big turnaround" and again "a pure-play regulated story," analyst Kit Konolige of Morgan Stanley & Co. said in a note to clients Friday.

Operating within a settlement plan that PG&E struck with the California Public Utilities Commission in late 2003, the utility said it expected moderate, single-digit growth in the coming years.