List of PG&E; Creditors Shows Firm’s Wide Reach in Business
It reads like a phone book: Able Auto Body, Able Building Maintenance, Able Fence Co., Able Printing, Able Termite & Pest Control. . . .
These companies are among about 50,000 entries on Pacific Gas & Electric Co.’s roster of creditors recently filed in U.S. Bankruptcy Court.
Another company, A&J; Electrical Cable Corp. of Hayward, has supplied PG&E; with utility cables since 1980. But now the unpaid bills are hitting the $100,000 mark--and that is a big deal to a relatively small business.
“Who would ever think that PG&E; would be in bankruptcy?” said owner Magdalene Reilly. “This is something affecting people. I’ve got a lot of paychecks on Friday.
“We have orders for the rest of the year [from PG&E;],” she added. “It is a question: Do you decide to ship? . . . We probably will. They are a good customer.”
When PG&E; filed for Chapter 11 protection from creditors April 6, businesses from California to Canada were caught by surprise. The names of the 20 biggest creditors, some with billion-dollar claims, were filed with the court. The utility also submitted a list of potential creditors--more than 3,500 pages worth.
The roster speaks to the remarkable economic clout and reach of a company that prospered for almost a century before plunging into the third-biggest bankruptcy case in U.S. history. It provides a glimpse into the relationships between a giant utility--the state’s largest--and businesses of all sorts and sizes. And it underscores the high stakes as a bankruptcy judge reorders PG&E;’s financial affairs and decides in the coming months, if not years, who should be paid and how much.
The case, said U.S. bankruptcy trustee Linda Ekstrom Stanley, “has a ripple effect. . . . Creditors are affected, and they can’t pay their bills either.”
There are small companies and conglomerates that sold power to PG&E.;
There are financial institutions from Wall Street to San Francisco’s Montgomery Street that lent money or provided services.
There are government agencies at all levels, even the California Public Utilities Commission.
There are some retired PG&E; employees and officers, including at least one of the company’s former chief executive officers.
But there also are vendors that have provided goods and services to PG&E; for years: tree trimming around power lines, bodywork for the utility’s truck fleet, fencing for its vast land holdings, calibration of meters, fans to cool electrical transformers, printing of brochures, signs for office doors, flight suits for aviators who patrol power lines, limousine service for traveling executives.
No dollar amounts are attached to names on the master list. But records and interviews with dozens of creditors show that the sums owed range from hundreds of millions of dollars to very little--or nothing at all. Many of the smaller creditors were unaware they were on the roster until contacted by The Times.
PG&E; used to buy pump filters from California Pump & Supply in Sacramento.
“We just closed out their account because they owed us $29,” said office manager Lisa Giordano. “It’s a hassle to get anyone over there. I just wrote it off.”
The utility bought $38 worth of plants from Forest Nursery in Los Osos, west of San Luis Obispo. “It’s nothing to go to court about, especially since they paid it,” said bookkeeper Lori Parsons.
A wine wholesaler, an ice cream company and a coastal hotel are listed. So is Sing A Long Productions in Burlingame, which supples disc jockeys and karaoke.
“I am sure we have done business with PG&E; and other companies that have parties from time to time,” said owner Nick Foster. “Maybe somebody forgot that we did not get paid.”
PG&E; spokesman Ron Low said the list includes everyone to whom the utility wrote a check in the last two years, such as homeowners who received energy conservation rebates and retirees who received checks related to benefits.
“It was an attempt to notify anybody who possibly could have a claim against the company and to cast the widest net possible,” he said.
Several PG&E; retirees, such as Robert W. Oliver of Berkeley, were baffled by their inclusion on the list. “I draw a little pension,” said Oliver, who was a personnel executive and left the company in 1980. “It’s a vested pension.”
Another retiree on the list is former Chief Executive Richard A. Clarke.
He and about 10 other former high-ranking PG&E; executives or their survivors have retained an attorney to help ensure that their retirement benefits are protected during the bankruptcy case.
“We don’t want someone to get the idea that this is a bunch of well-heeled executives trying to get a piece of the action,” said the attorney, John T. Hansen. “Some in our group are widows of former executives who depend on the pensions they receive as survivors.”
Hansen said some retired executives have deferred-compensation packages that might be considered a general unsecured bankruptcy claim.
One concern, he said, is that PG&E; Chairman Robert D. Glynn Jr. wrote recently in a San Francisco Chronicle op-ed article that health care plans and other benefits “for employees and most retirees” will continue.
“We would want to know what ‘most’ is,” Hansen said. “We want to sort it out.”
Low of PG&E; said fewer than 100 retired employees, most former officers, “have a portion of their pension that is unsecured.” That means their claims will be handled in Bankruptcy Court with those of other unsecured creditors whose debts are not backed by utility assets.
The spokesman emphasized that ex-employees could be on the list because they received a check from the company for something.
Companies and individuals on the list, PG&E; said, will be contacted and given an opportunity to state their claims, which the utility will file with the court May 11.
Meanwhile, the effects of the bankruptcy filing continue to ripple beyond the utility.
PG&E;’s action hit AA Safe & Lock Co. in Santa Cruz particularly hard. The firm replaces keys and locks for PG&E; offices and trucks.
“We are a small business, and it is a big account,” said owner Paul Bing, who declined to say what the utility owes. “We haven’t been doing as much for them since the whole crisis started.”
A Hayward firm that conducts environmental testing when PG&E; remodels or razes buildings is out money too. Ken Byk, president of Forensic Analytical, would not provide a figure but said: “I am obviously concerned. . . . They are a good customer, but any time you run into these problems, it’s disappointing.”
California Steam Inc. of Sacramento services PG&E; pressure washers and water recyclers at its truck-cleaning facilities. “I have just a couple of invoices out,” said service manager Bruce Amlin. The debt, he said, is less than $500.
A similar amount is owed to California Turbo Inc. in Ontario. Sales manager Cam Young said the utility has not paid for eight fans used to cool electrical transformers. “We’re a small business,” Young said, adding with a laugh: “We might have to eat peanut butter and jelly for four or five months.”
Within days of the bankruptcy filing, PG&E; sent about 12,000 creditors letters that began: “Valued Goods and Services Provider: . . . Unfortunately, the bankruptcy code precludes payment for goods and services received prior to the date of filing. Payments on this pre-petition debt will be settled as part of the plan of reorganization.” The company assured vendors that they will be paid for any future purchases.
Some are not only forgiving, they are outspokenly loyal to PG&E.;
The relationship between the utility and AG Signs of Stockton spans two decades. When Tony Guebara was starting his company, PG&E; gave him business. “They try to help the little guy,” he said. “Just about everybody in town is a vendor. They have people here who paint their trucks.”
AG Signs now has five employees and supplies PG&E; with door lettering for trucks, name plaques for office doors and signs and flags for construction sites.
Guebara said the utility’s debt does not worry him: “PG&E; has treated me real well. If I lose a couple of bucks because of [this] adversity, that is OK. . . . I don’t think we’ve seen the last of PG&E.;”
Many businesses and individuals said they had no idea why the company believes it owes them money.
Being included on the creditors list left the Vallejo Camp Fire Girls & Boys and other charitable organizations somewhat confused. Officials of one Berkeley church could only speculate that it was listed because PG&E; stock was bequeathed to the congregation decades ago.
Twylah Lemargie, manager of the Cancer Aid Thrift Shop in Grass Valley, said the utility is not even a customer. “PG&E; did come in and replaced lots of our ceiling lights with the long tubes,” she said. “But it was done free as an energy saver.”
A number of vendors said PG&E;’s account is paid up.
The utility rented temporary housing units for workers on a hydroelectric project about two years ago, but California RV Rentals in Rio Lindo is still named as a creditor. “They don’t owe me money,” said Sandra Weaver, the manager. “If they want to give me some, it’s OK.”
Many creditors are health clubs and health care providers: medical and dental offices, foot and joint specialists, pharmacies, chiropractors.
When informed that the Castro Valley Chamber of Commerce was on the creditors list, the woman who answered the phone laughed uproariously. Then Executive Director Bonnie Dettmer came to the line.
“I’m going to guess it’s membership dues,” she said. “They are a member and they have been very supportive. I would bet they belong to every chamber of commerce.”
One creditor is the state agency that PG&E; says drove the company into insolvency by not allowing full recovery of its wholesale power costs.
“They owe us $5.9 million . . . for environmental impact reports on PG&E; projects,” said Paul Clanon, director of the Public Utilities Commission’s energy division. “It’s a serious amount of money but currently is not having an impact.”
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Top 10 Creditors
The creditors owed the most money by Pacific Gas & Electric Co., according to the company’s Chapter 11 filing:
*--*
Creditor Money owed Bank of New York $2.20 billion California Power Exchange $1.96 billion Bankers Trust Co. $1.30 billion California Independent System Operator $1.12 billion Bank of America* $938 million US Bank $310 million Calpine Gilroy Cogeneration LP $58 million Calpine Greenleaf Inc. $49 million Crocket Cogen $48 million Calpine King City Cogen LLC $45 million
*--*
* Heading a group of banks
Source: U.S. Bankruptcy Court, Northern DIstrict of California
