Pacific Gas and Electric is one of the third largest utilities company in the state of California and supplies electricity to 5 million customers. PG&E was originally founded in 1852 in the city of San Francisco, where it continues to reside its headquarters. The Investor-Owned Utility (IOU) giant was able to successful in influencing change of policy through its political power.
California began to experience rolling black outs in early summer of 2000 because of the lack of energy resources. The energy crisis that tormented California for several months began in 1996 when proposition AB1890 was drafted and passed. The bill presumed the electric market would fill with power companies vying to sell low-cost power of all varieties, including "green power" from wind and solar. There was very little public debate leading up to California's decision to deregulate its electric utilities. The early battles were muddied and muzzled. The state legislature deliberated for three-weeks before then Governor Pete Wilson signed the bill. The Southern California Edison (SoCalEd) is accredited for essentially writing much of the legislation, AB1890, in its corporate offices. Both utilities companies spent more than $3.6 million lobbying to win the bill in 1996, and another $4.1 million to promote it in 1997.
In 1998, proposition 9 was introduced and supported by 700,000 signatures of register voters to combat the AB1890 bill with hopes of regulating California’s utilities, however; the big energy power-house steamrolled their counter campaign with a $40 million against the $1 million of supporters of proposition 9. California voters rejected Proposition 9's proposal to repeal electricity deregulation by a 73-to-27 percent margin. In April of 2001, PG& E Corp. files for bankruptcy under chapter 11, but under certain circumstances, PG&E was allowed for the creation of ring-fenced subsidiaries while they were on the brink of bankruptcy. In general, ring-fencing will only create...