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PG&E Annual Report, Year Ended Dec 31, 2001

Filing Date
Filed March 5, 2002
Period End
December 31, 2001
In the record · 2016–202610-K1310-Q338-K367

PCG filed 13 annual reports (10-K), 33 quarterly reports (10-Q) and 367 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Apr ’18Apr ’18
  2. Bankruptcy8-K · Jun ’20Jun ’20
  3. Leadership change8-K · Mar ’22Mar ’22
  4. Leadership change8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed March 5, 2002. Cited figures are marked; the original filing is the authoritative source.

PG&E Corporation, an energy-based holding company, filed its 2001 annual report on Form 10-K on March 5, 2002, with its subsidiary Pacific Gas and Electric Company (the Utility), which has been operating as a debtor-in-possession under Chapter 11 since April 6, 2001.

The Utility's wholesale power costs during the California energy crisis far exceeded the frozen retail rates it could collect. The Utility's under-collected power purchase costs reached $6.6 billiona at December 31, 2000, and the company wrote off $6.9 billion of generation-related regulatory assets and under-collected purchased power costs in 2000. The filing reports 2001 net income of $1,099 million for PG&E Corporation, compared with a net loss of $3,364 million in 2000, with substantially all of the change attributable to the Utility.

The central investor issue is the proposed plan of reorganization, filed September 20, 2001 and amended twice. The plan would split the Utility into a retail distribution company and federally regulated transmission, gas transmission and generation entities, and would pay all valid claims in full with interest. A competing alternative plan from the California Public Utilities Commission was submitted as a term sheet on February 13, 2002.

Confirmation depends on bankruptcy court and regulatory approvals that the company says it cannot predict. The Utility reports $4.3 billionb in cash and states that cash and operations will provide liquidity through 2002. Liabilities subject to compromise total $11.4 billion.

PG&E Corporation also faces significant litigation, including California Attorney General and San Francisco complaints alleging violations of holding company conditions, and a federal securities class action. For investors, the filing shows a parent company whose 2001 results depend heavily on the Utility's recovery of wholesale costs.

PG&E Corporation's term loans restrict dividends, and no dividends were declared in 2001. The company's ultimate equity value depends on how the bankruptcy and regulatory outcomes are resolved.

02—Key points

Key Highlights

  1. PG&E Corporation reported 2001 net income of $1,099 million, compared with a net loss of $3,364 million in 2000; operating revenues were $22,959 million.
  2. The Utility filed a voluntary Chapter 11 petition on April 6, 2001, and continues to operate as a debtor-in-possession; liabilities subject to compromise total $11.4 billion.
  3. The proposed plan of reorganization would separate the Utility's businesses into state-regulated distribution and federally regulated transmission and generation entities, with valid claims to be paid in full with interest.
  4. The CPUC submitted an alternative plan term sheet on February 13, 2002, which the company says does not realign the Utility's business and which the company believes is not credible.
  5. No dividends were declared in 2001; PG&E Corporation's $1 billion term loan prohibits dividends until the loans are repaid.
  6. The Utility wrote off $6.9 billion of generation-related regulatory assets and under-collected purchased power costs at December 31, 2000.
  7. Pending litigation includes a California Attorney General complaint and a San Francisco and State complaint alleging holding company violations, a federal securities class action, and chromium contamination claims; the company does not predict outcomes.

03—Questions

Frequently Asked Questions

  1. Why did the Utility file for Chapter 11 bankruptcy?

    The filing states that the Utility's frozen retail rates were insufficient to cover wholesale power costs during the California energy crisis. Its credit ratings fell below investment grade in January 2001, ending its access to credit. The filing also cites the failure of the DWR to assume full procurement responsibility, a CPUC decision creating new payment obligations, a lack of progress in state negotiations, and a retroactive accounting change.

  2. What does the proposed plan of reorganization mean for shareholders?

    The plan proposes that PG&E Corporation distribute the shares of the reorganized Utility to its common shareholders on a pro rata basis, while transmission and generation entities would remain indirect subsidiaries. The filing states that confirmation depends on bankruptcy court rulings, regulatory approvals, and credit ratings, and that the company cannot predict whether the plan will be confirmed.

  3. How much liquidity does the company have?

    The Utility reports cash and cash equivalents of $4.3 billion at December 31, 2001, and believes this plus cash from operations will provide liquidity through 2002. PG&E Corporation itself had cash and short-term investments of $348 million and believes this is adequate to maintain its operations through 2002. PG&E NEG had $725 million in cash and about $800 million in unused credit lines.

  4. What are the main legal risks?

    The company faces an Attorney General complaint seeking penalties of at least $500 million, a San Francisco and State complaint alleging conversion of at least $5.2 billion, a federal securities class action, a $2.48 billion natural gas royalties claim, and about 1,290 chromium-exposure plaintiffs. The filing states that PG&E Corporation cannot predict whether the Attorney General litigation will have a material adverse effect.

04—Continue

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