It's amazing with this energy "crisis" no one is telling people to try to conserve energy. You would think that if there is a problem the energy commission would have tv commercials telling people to unplug their christmas lights, turn off lights when you leave the house etc...
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California energy crisis....
- Thread starter nippyjun
- Start date
<< AFAIK, the rate hikes were approved .. temporarily relieving the "crisis". >>
Sorry, the rates hikes approved were not near enough.....bonds of both Southern Cal Edison and PG&E are at or near junk status....they are having a hard time paying their bills, having to buy electricity for 30 cents a kwh, and sell it for 5.4 cents a kwh (or now 6.4 cents with the rate increase).
The State Legislature needs to do something to undo the rate freeze they imposed in 1996. No company should be required to sell their product for so much less then they pay for it. The two utilities have lost $10 billion or more since the problem started last year. They can't keep doing this much longer. Hopefully the State Legislature will figure something out.
<<Sorry, the rates hikes approved were not near enough.....bonds of both Southern Cal Edison and PG&E are at or near junk status....they are having a hard time paying their bills, having to buy electricity for 30 cents a kwh, and sell it for 5.4 cents a kwh (or now 6.4 cents with the rate increase).>>
I think SOcalEdison should go under, it would be an eyeopener for the state. They would be forced to nationalize the lines and distribution system to keep SoCal in power. It's unfortunate for the shareholders but I think the people in SoCal need to be taught a lesson about opposing power plant construction....
I think SOcalEdison should go under, it would be an eyeopener for the state. They would be forced to nationalize the lines and distribution system to keep SoCal in power. It's unfortunate for the shareholders but I think the people in SoCal need to be taught a lesson about opposing power plant construction....
Michael
Elite member
rahvin - I agree. NorCal needs the same lesson. My home town is NIBY central. They blocked a small plant that could be operational in less than a year and they're fighting new underground transmition lines. Meanwhile, they're adding business after business and house after house that need electricity.
Michael
Michael
NaughtyusMaximus
Diamond Member
Hell, why don't they just give us more money, we'll give them more power. Something like 60% of the pollution in Vancouver comes from a power plant from which 100% of the power goes to the US - Cali. I believe.
Hey, I just got my gas bill and it's unfriggin believable! $185 for the month, not to mention $212 for the electric bill. We've lived here in CA for not quite six months, moving from Washington state, where our highest electric bill was $90 in the dead of winter, using electic heat. 🙁
glenn1
Lifer
Yep, it appears that the folks in California are about to recieve a lesson in free-market economics. They've been attempting to keep the price of power artificially low (by capping market rates) while limiting supply potential (by opposing any buildout of the utilities infrastructure). Adam Smith's "invisible hand" is about to whack Californians upside the head. I feel bad for them, but it's good and educational in a sense. Some folks need to have it shown to them that you f*ck with the operations of free markets at your own peril, and that social policies such as strict environmentalism DO carry economic costs, which voters need to have the right to determine if they should bear.
Another benefit of Edison, SDGE, PGE all going under is that it screws all the energy providers all around the country. Billions and billions will be lost to energy providers all around the nation. It would be nice to share the burden with the rest of the country. On top of that, the Fed. Energy Comission, is forcing them to sell to California, so these energy providers have no choice in the matter. The Fed also has no choice (even with Bush), since the massive impact on the country if they didn't intervene.
Add to this that there is a large movement for the state to take over power distribution, especially if Edison goes bankrupt. It seems this "lesson in free market economy" will end California's attempt at deregulation (and their attempts to create a real free market in utilities that exists in almost no other state) and actually lead to more governmental intervention and then a state-run utilities business so large (imagine all of California buying energy together from around the country), that no other state could hope to compete with for electricity. It seems the lesson here is that more governement pays off, and a state run utilities industry is better than a private sector, free market utilities industry. How ironic.
Add to this that there is a large movement for the state to take over power distribution, especially if Edison goes bankrupt. It seems this "lesson in free market economy" will end California's attempt at deregulation (and their attempts to create a real free market in utilities that exists in almost no other state) and actually lead to more governmental intervention and then a state-run utilities business so large (imagine all of California buying energy together from around the country), that no other state could hope to compete with for electricity. It seems the lesson here is that more governement pays off, and a state run utilities industry is better than a private sector, free market utilities industry. How ironic.
Raspwetin,
That explanation is far too simplistic--for instance, you forgot to include the part about California not building any new power plants, not for the past 20 years. With the state's rapid growth, especially the energy-hungry Silicon Valley, it is no wonder that there are such tremendous supply problems.
To blame this on the "free-market" is ludicrous. Prices are high because demand is tight. Demand is tight because California screwed up. So, yes Government can get the credit. The credit for astronomically higher energy bills and the wrecking of the utilities in the state. That's about it. Don't pretend that they have had a positive effect.
Government can accomplish almost anything. However, they will use the absolutely most inefficient way to do so.
That explanation is far too simplistic--for instance, you forgot to include the part about California not building any new power plants, not for the past 20 years. With the state's rapid growth, especially the energy-hungry Silicon Valley, it is no wonder that there are such tremendous supply problems.
To blame this on the "free-market" is ludicrous. Prices are high because demand is tight. Demand is tight because California screwed up. So, yes Government can get the credit. The credit for astronomically higher energy bills and the wrecking of the utilities in the state. That's about it. Don't pretend that they have had a positive effect.
Government can accomplish almost anything. However, they will use the absolutely most inefficient way to do so.
Bravo Fdiskboy!! Finally someone with a clue! The lack of new powerplants can of course be attributed to the Enviromental actions that have taken place in CA, I think its rather ironic that the state with probably the richest of the rich are the ones that are suffering. Since I was in high school in the 80's I've slowly watched the enviromental action take place in CA. You used to be able to go to the dunes and ride your ATV's now much of that is restricted or banned all together. It sucks that this is happening for everyone there and in the rest of the US, but what it boils down to is the <cartman>tree huggin hippies</cartman> and the lawmakers who support them.
<<Add to this that there is a large movement for the state to take over power distribution, especially if Edison goes bankrupt. It seems this "lesson in free market economy" will end California's attempt at deregulation (and their attempts to create a real free market in utilities that exists in almost no other state) and actually lead to more governmental intervention and then a state-run utilities business so large (imagine all of California buying energy together from around the country), that no other state could hope to compete with for electricity. It seems the lesson here is that more governement pays off, and a state run utilities industry is better than a private sector, free market utilities industry. How ironic.>>
What I find ironic is that most people in Cali, like you, apparently have no idea what will happen if the power utilities go under. Cali will have to take over operations, this WILL result in higher costs, worse service AND the tax payer is gonna foot the entire bill. Not only will Cali citizens be responsible for paying the market rate for power, but the shareholders of the bankrupt utilities WILL sue the state and it will result in a massive settlement. After the state takes over operations expect a huge reduction in service and reliability, and one hell of a tax hike to pay for it all.... Environmental opposition has a price and Cali is about to pay it...
And just so you don't think you are an island, as alluded to in most posts, gas prices around the country have gone up. Utah authorized a 30% increase for Questar retroactive to the first. This is HIGHER than the rate increase allowed in Cali. You guys are in for a world of hurt very very soon....
What I find ironic is that most people in Cali, like you, apparently have no idea what will happen if the power utilities go under. Cali will have to take over operations, this WILL result in higher costs, worse service AND the tax payer is gonna foot the entire bill. Not only will Cali citizens be responsible for paying the market rate for power, but the shareholders of the bankrupt utilities WILL sue the state and it will result in a massive settlement. After the state takes over operations expect a huge reduction in service and reliability, and one hell of a tax hike to pay for it all.... Environmental opposition has a price and Cali is about to pay it...
And just so you don't think you are an island, as alluded to in most posts, gas prices around the country have gone up. Utah authorized a 30% increase for Questar retroactive to the first. This is HIGHER than the rate increase allowed in Cali. You guys are in for a world of hurt very very soon....
Like rahvin said, Cali ain't alone. Here in Illinois and Iowa, some companies have raised their natural gas prices upwards of 80%. A very large portion of homes are heated by natural gas around here.
To bury the dagger a little deeper, we've had one of the harshest winters in over 10 years. In the month of December, there were maybe 5 days over 20 degree's. There was a week straight of negative degree days.
I know that some of my relatives have had gas bills well over $400 for last month. There are many, many lower income people applying for aid to help them pay for their bills.
California ain't alone.
To bury the dagger a little deeper, we've had one of the harshest winters in over 10 years. In the month of December, there were maybe 5 days over 20 degree's. There was a week straight of negative degree days.
I know that some of my relatives have had gas bills well over $400 for last month. There are many, many lower income people applying for aid to help them pay for their bills.
California ain't alone.
fdiskboy,
excellent post. no doubt California is too blame for not providing enough energy to meet their own needs, and then stupidly on top of that attempting deregulation. I was being sarcastic in much of my post (i.e. the free market part). I was trying to illustrate how blaming the issue on market caps was naive, and how it could be just as easily argued the complete opposite way (that trusting the free market was the mistake). Also to think that free market economics is winning this scenario is dumb, especially b/c the result of this "lesson" will be no free market in electricity in California for a LONG time. Unregulated free market is a big loser as a result of this mess, unfortantely. And how many other states are now going to deregulate their utilities anytime soon?
<< What I find ironic is that most people in Cali, like you, apparently have no idea what will happen if the power utilities go under. Cali will have to take over operations, this WILL result in higher costs, worse service AND the tax payer is gonna foot the entire bill. Not only will Cali citizens be responsible for paying the market rate for power, but the shareholders of the bankrupt utilities WILL sue the state and it will result in a massive settlement. After the state takes over operations expect a huge reduction in service and reliability, and one hell of a tax hike to pay for it all.... Environmental opposition has a price and Cali is about to pay it... >>
Rahvin,
You don't have a clue if a state-run utility business will result in higher costs or not, so don't pretend your opinion or your psychic readings for the future are facts.
First the future huge settlemenet w/ shareholders "fact". Why would shareholders sue if the company's go bankrupt, since attempting to pay off these bills would force the companies to lose so much value that it would push the share price down anyways? You honestly think shareholders would prefer the company to buried under debt then declaring bankruptcy? lol. that's the type of investor bankers dream about in thier sleep.
Re: tax-subsidized electrical service "fact". since dergulated doesn't work, and thus we have no choice in who we pay for electricity, and everyone pays electricity, how much of a difference will there be for state-controlled vs. state-regulated? We'll see. Both suck IMO. The state bargaining as entire state may even be able to lock in better contracts than three companies individually just b/c of sheer size. To assume the state govt will screw it up is as stupid as assuming things will get better once they take over (which many Californians believe).
excellent post. no doubt California is too blame for not providing enough energy to meet their own needs, and then stupidly on top of that attempting deregulation. I was being sarcastic in much of my post (i.e. the free market part). I was trying to illustrate how blaming the issue on market caps was naive, and how it could be just as easily argued the complete opposite way (that trusting the free market was the mistake). Also to think that free market economics is winning this scenario is dumb, especially b/c the result of this "lesson" will be no free market in electricity in California for a LONG time. Unregulated free market is a big loser as a result of this mess, unfortantely. And how many other states are now going to deregulate their utilities anytime soon?
<< What I find ironic is that most people in Cali, like you, apparently have no idea what will happen if the power utilities go under. Cali will have to take over operations, this WILL result in higher costs, worse service AND the tax payer is gonna foot the entire bill. Not only will Cali citizens be responsible for paying the market rate for power, but the shareholders of the bankrupt utilities WILL sue the state and it will result in a massive settlement. After the state takes over operations expect a huge reduction in service and reliability, and one hell of a tax hike to pay for it all.... Environmental opposition has a price and Cali is about to pay it... >>
Rahvin,
You don't have a clue if a state-run utility business will result in higher costs or not, so don't pretend your opinion or your psychic readings for the future are facts.
First the future huge settlemenet w/ shareholders "fact". Why would shareholders sue if the company's go bankrupt, since attempting to pay off these bills would force the companies to lose so much value that it would push the share price down anyways? You honestly think shareholders would prefer the company to buried under debt then declaring bankruptcy? lol. that's the type of investor bankers dream about in thier sleep.
Re: tax-subsidized electrical service "fact". since dergulated doesn't work, and thus we have no choice in who we pay for electricity, and everyone pays electricity, how much of a difference will there be for state-controlled vs. state-regulated? We'll see. Both suck IMO. The state bargaining as entire state may even be able to lock in better contracts than three companies individually just b/c of sheer size. To assume the state govt will screw it up is as stupid as assuming things will get better once they take over (which many Californians believe).
<<You don't have a clue if a state-run utility business will result in higher costs or not, so don't pretend your opinion or your psychic readings for the future are facts.>>
Show me ONE instance where a government run company, facility, or agency is more efficient or even equally efficient to a private organization. Just one. And in fact I can provide an example that shows they are inefficient. Research the TVA (Tennesse Valley Authority). It was authorized by FDR and create a multi-region power and utility supplier. Their current energy charges are 14cents a kwh, most of the rest of the nation is at 10cents a kwh. This is an example of a hugely inefficient government run utility company. Deregulation of the TVA region to open power purchasing will result in the death of the TVA and they vocally oppose deregulation for that very reason.
<<First the future huge settlemenet w/ shareholders "fact". Why would shareholders sue if the company's go bankrupt, since attempting to pay off these bills would force the companies to lose so much value that it would push the share price down anyways? You honestly think shareholders would prefer the company to buried under debt then declaring bankruptcy? lol. that's the type of investor bankers dream about in thier sleep.>>
California state government is negligent in the fair regulation of the state of california utilities in forcing them to buy power at wholesale costs and rate locking prices 5x lower than the commercial wholesale price. Through their negligence they have caused the loss in 6 billion dollars+ of shareholder assets and they will be responsible for those damages to those shareholders when the lawsuit does happen.
For some reason you think bankruptcy is some magical solution that makes debt go away and that magically the company is whole afterwards. This is a symptom of america but I will educate on this business area. When you declare bankrupty without liquidating assests you still have to pay the lenders!(the debt does not go away) If SoCal Edison declares bankruptcy they will be declared INSOLVENT. This means they will SHUT DOWN operations, liquidate assets to pay lendors and the shareholders get stuck with NOTHING. SoCal Edison filed SEC documents a couple weeks ago warning the market that because they cannot get anyone to loan them money they will be insolvent shortly unless Cali raises power rates.
<<Re: tax-subsidized electrical service "fact". since dergulated doesn't work, and thus we have no choice in who we pay for electricity, and everyone pays electricity, how much of a difference will there be for state-controlled vs. state-regulated? We'll see. Both suck IMO. The state bargaining as entire state may even be able to lock in better contracts than three companies individually just b/c of sheer size. To assume the state govt will screw it up is as stupid as assuming things will get better once they take over (which many Californians believe).>>
Oh and who says deregulated doesn't work? I think the deregulated long distance service is great, and I believe the soon to be deregulated local phone service is going to be great as well. Deregulation in power distribution isn't going to work if you fix prices and limit supply. First lesson in economics is supply/demand dictate price. If california bothered to allow new power plants, you wouldn't be having this problem! Cali hasn't built a new power plant in 20 years! Limit supply, increase demand and price goes up. Apparently california lawmakers and citizens are ignorant of this economic 'fact'. Go ahead and let your state buy out the power companies, then you will be paying the wholesale rate for that power, and you will be stuck with a power company on state wages and benefits with the tax payers footing the ENTIRE bill.
Show me ONE instance where a government run company, facility, or agency is more efficient or even equally efficient to a private organization. Just one. And in fact I can provide an example that shows they are inefficient. Research the TVA (Tennesse Valley Authority). It was authorized by FDR and create a multi-region power and utility supplier. Their current energy charges are 14cents a kwh, most of the rest of the nation is at 10cents a kwh. This is an example of a hugely inefficient government run utility company. Deregulation of the TVA region to open power purchasing will result in the death of the TVA and they vocally oppose deregulation for that very reason.
<<First the future huge settlemenet w/ shareholders "fact". Why would shareholders sue if the company's go bankrupt, since attempting to pay off these bills would force the companies to lose so much value that it would push the share price down anyways? You honestly think shareholders would prefer the company to buried under debt then declaring bankruptcy? lol. that's the type of investor bankers dream about in thier sleep.>>
California state government is negligent in the fair regulation of the state of california utilities in forcing them to buy power at wholesale costs and rate locking prices 5x lower than the commercial wholesale price. Through their negligence they have caused the loss in 6 billion dollars+ of shareholder assets and they will be responsible for those damages to those shareholders when the lawsuit does happen.
For some reason you think bankruptcy is some magical solution that makes debt go away and that magically the company is whole afterwards. This is a symptom of america but I will educate on this business area. When you declare bankrupty without liquidating assests you still have to pay the lenders!(the debt does not go away) If SoCal Edison declares bankruptcy they will be declared INSOLVENT. This means they will SHUT DOWN operations, liquidate assets to pay lendors and the shareholders get stuck with NOTHING. SoCal Edison filed SEC documents a couple weeks ago warning the market that because they cannot get anyone to loan them money they will be insolvent shortly unless Cali raises power rates.
<<Re: tax-subsidized electrical service "fact". since dergulated doesn't work, and thus we have no choice in who we pay for electricity, and everyone pays electricity, how much of a difference will there be for state-controlled vs. state-regulated? We'll see. Both suck IMO. The state bargaining as entire state may even be able to lock in better contracts than three companies individually just b/c of sheer size. To assume the state govt will screw it up is as stupid as assuming things will get better once they take over (which many Californians believe).>>
Oh and who says deregulated doesn't work? I think the deregulated long distance service is great, and I believe the soon to be deregulated local phone service is going to be great as well. Deregulation in power distribution isn't going to work if you fix prices and limit supply. First lesson in economics is supply/demand dictate price. If california bothered to allow new power plants, you wouldn't be having this problem! Cali hasn't built a new power plant in 20 years! Limit supply, increase demand and price goes up. Apparently california lawmakers and citizens are ignorant of this economic 'fact'. Go ahead and let your state buy out the power companies, then you will be paying the wholesale rate for that power, and you will be stuck with a power company on state wages and benefits with the tax payers footing the ENTIRE bill.
"Show me ONE instance where a government run company, facility, or agency is more efficient or even equally efficient to a private organization. "
U.S. Postal Service is very efficient.
"Oh and who says deregulated doesn't work? "
No one said this. How could you possibly get from my posts that I was against deregulation? If you were following the California energey crisis from the beginning, you'd know the market caps came AFTER prices skyrocketed from deregulation. Markets caps didn't occur simulatenously as de-regulation. Re: supply, you are actually correct. California should have built more power plants. They were hoping the private sector would build the plants once deregulation opened up the market. Even if this were true, there would be at least a 5 year lag between new power plants online and the deregulation. So California wasn't trying to limit supply, they just planned poorly. It's an over-simplification to think California was attempting to limit supply.
"For some reason you think bankruptcy is some magical solution that makes debt go away and that magically the company is whole afterwards... If SoCal Edison declares bankruptcy they will be declared INSOLVENT. "
Nope -wrong on both counts. Try to focus on what you think instead of telling me what I think. I don't think bankruptcy is a magic solution, but it also isn't the bane you suggest and won't necessarily screw investors. There are multiple types of bankruptcy, and not all force these companies to cease operations. For example, Ch. 11 allows a business to continue operating while repaying creditors through a court-approved plan. It also invokes an automatic stay prevents creditors from starting or continuing most legal proceedings against the company. Where did you get the idea that bankruptcy of Edison = end of Edison and a screw to all stockholders?
U.S. Postal Service is very efficient.
"Oh and who says deregulated doesn't work? "
No one said this. How could you possibly get from my posts that I was against deregulation? If you were following the California energey crisis from the beginning, you'd know the market caps came AFTER prices skyrocketed from deregulation. Markets caps didn't occur simulatenously as de-regulation. Re: supply, you are actually correct. California should have built more power plants. They were hoping the private sector would build the plants once deregulation opened up the market. Even if this were true, there would be at least a 5 year lag between new power plants online and the deregulation. So California wasn't trying to limit supply, they just planned poorly. It's an over-simplification to think California was attempting to limit supply.
"For some reason you think bankruptcy is some magical solution that makes debt go away and that magically the company is whole afterwards... If SoCal Edison declares bankruptcy they will be declared INSOLVENT. "
Nope -wrong on both counts. Try to focus on what you think instead of telling me what I think. I don't think bankruptcy is a magic solution, but it also isn't the bane you suggest and won't necessarily screw investors. There are multiple types of bankruptcy, and not all force these companies to cease operations. For example, Ch. 11 allows a business to continue operating while repaying creditors through a court-approved plan. It also invokes an automatic stay prevents creditors from starting or continuing most legal proceedings against the company. Where did you get the idea that bankruptcy of Edison = end of Edison and a screw to all stockholders?
Raspewtin: USPS is no longer govt owned.
Rahvin: Im sorry I cant be more exact or detailed, but there was this one city a while back in the US where all its workers turned to communism, and it was surprisingly much more efficient than when it was being run by capitalists, ill try to find the name. (And no Im not a Communist, I just like to prove people wrong 🙂)
Rahvin: Im sorry I cant be more exact or detailed, but there was this one city a while back in the US where all its workers turned to communism, and it was surprisingly much more efficient than when it was being run by capitalists, ill try to find the name. (And no Im not a Communist, I just like to prove people wrong 🙂)
<<U.S. Postal Service is very efficient.>>
The US postal service is non-profit private corporation regulated by the government. They are composed of an government appointed board of trustees and a standard corporate setup. They were spun out of total government control years ago because they were inefficient while under total government control.
<<Re: supply, you are actually correct. California should have built more power plants. They were hoping the private sector would build the plants once deregulation opened up the market. Even if this were true, there would be at least a 5 year lag between new power plants online and the deregulation. So California wasn't trying to limit supply, they just planned poorly. It's an over-simplification to think California was attempting to limit supply.>>
California residents have opposed every proposed power plan construction in California for the last 20 years. Just a month ago a plant that would have been operational in 2 years was DENIED the permit to build in San Jose. This is a repeated story through all of Cali, the power plant people want to build them, but they aren't allowed to. You reap what you sow...
<<Nope -wrong on both counts. Try to focus on what you think instead of telling me what I think. I don't think bankruptcy is a magic solution, but it also isn't the bane you suggest and won't necessarily screw investors. There are multiple types of bankruptcy, and not all force these companies to cease operations. For example, Ch. 11 allows a business to continue operating while repaying creditors through a court-approved plan. It also invokes an automatic stay prevents creditors from starting or continuing most legal proceedings against the company. Where did you get the idea that bankruptcy of Edison = end of Edison and a screw to all stockholders?>>
Ok I will make it even simpler for you because you are missing the point. Chapter 11 Bankruptcy can't be entered if the company in question can't equalize revenue/expense forcasts. SoCal Edison will not be able to borrow an additional penny in a very short time (cause no one will lend it to them) At this point they will declare bankruptcy, because they will be unable to raise rates to increase revenue to cover their costs the court will order liquidation of the assets to pay the creditors. As in a personal bankruptcy case you are prevented from spending more than you make so it is with a company. Although in this case the company in question can't balance expenditures and revenues without shutting down operations.
Maybe I made that a little to difficult to understand so I will simplify further. You can't continue to sell power at 9.5cent/kwh when you are buying it for 25cent/kwh on borrowed money, because NOONE in their right mind would loan them money. As stated by a previous poster, their bonds have achieved JUNK status. This means that they must offer exhorbinant interest rates (probably around 16%) to even get people to loan them money. The court can protect them from legal action of current creditors but they can't make people loan them money!
If SoCal Edison runs out of capital it will be a total liquidation of assets, the state will have to intervene to keep the powergrid up and the taxpayers will foot the ENTIRE bill. Don't doubt that you will pay in the end, because the taxpayers always do. I would really like to see this happen as an example to people of what the consequences of NIMBY (Not-in-my-backyard) syndrome really are, although I hate to see anyone lose their jobs over this stupid policy decision.
The US postal service is non-profit private corporation regulated by the government. They are composed of an government appointed board of trustees and a standard corporate setup. They were spun out of total government control years ago because they were inefficient while under total government control.
<<Re: supply, you are actually correct. California should have built more power plants. They were hoping the private sector would build the plants once deregulation opened up the market. Even if this were true, there would be at least a 5 year lag between new power plants online and the deregulation. So California wasn't trying to limit supply, they just planned poorly. It's an over-simplification to think California was attempting to limit supply.>>
California residents have opposed every proposed power plan construction in California for the last 20 years. Just a month ago a plant that would have been operational in 2 years was DENIED the permit to build in San Jose. This is a repeated story through all of Cali, the power plant people want to build them, but they aren't allowed to. You reap what you sow...
<<Nope -wrong on both counts. Try to focus on what you think instead of telling me what I think. I don't think bankruptcy is a magic solution, but it also isn't the bane you suggest and won't necessarily screw investors. There are multiple types of bankruptcy, and not all force these companies to cease operations. For example, Ch. 11 allows a business to continue operating while repaying creditors through a court-approved plan. It also invokes an automatic stay prevents creditors from starting or continuing most legal proceedings against the company. Where did you get the idea that bankruptcy of Edison = end of Edison and a screw to all stockholders?>>
Ok I will make it even simpler for you because you are missing the point. Chapter 11 Bankruptcy can't be entered if the company in question can't equalize revenue/expense forcasts. SoCal Edison will not be able to borrow an additional penny in a very short time (cause no one will lend it to them) At this point they will declare bankruptcy, because they will be unable to raise rates to increase revenue to cover their costs the court will order liquidation of the assets to pay the creditors. As in a personal bankruptcy case you are prevented from spending more than you make so it is with a company. Although in this case the company in question can't balance expenditures and revenues without shutting down operations.
Maybe I made that a little to difficult to understand so I will simplify further. You can't continue to sell power at 9.5cent/kwh when you are buying it for 25cent/kwh on borrowed money, because NOONE in their right mind would loan them money. As stated by a previous poster, their bonds have achieved JUNK status. This means that they must offer exhorbinant interest rates (probably around 16%) to even get people to loan them money. The court can protect them from legal action of current creditors but they can't make people loan them money!
If SoCal Edison runs out of capital it will be a total liquidation of assets, the state will have to intervene to keep the powergrid up and the taxpayers will foot the ENTIRE bill. Don't doubt that you will pay in the end, because the taxpayers always do. I would really like to see this happen as an example to people of what the consequences of NIMBY (Not-in-my-backyard) syndrome really are, although I hate to see anyone lose their jobs over this stupid policy decision.