As I recall, their split in the 2000's was a move to preserve their profits in the parent corp by separating out the other part. It was done purely for tactical purposes in the event of lawsuits, with all of the profits moving up to the parent corp and out of reach of any lawsuits.
Anybody have more specific information on this?
It was due to bankruptcy:
from wikipedia (
https://en.wikipedia.org/wiki/Pacific_Gas_and_Electric_Company#Bankruptcy)
In 1998, a change in the regulation of California's public utilities, including PG&E, began. The California Public Utility Commission (CPUC) set the rates that PG&E could charge customers and required them to provide as much power as the customers wanted at rates set by the CPUC.
In the summer of 2001 a drought in the northwest states and in California reduced the amount of hydroelectric power available. Usually PG&E could buy "cheap" hydroelectric power under long term contracts with the Bonneville Dam, etc. Drought and delays in approval of new power plants and market manipulation decreased available electric power generation capacity that could be generated in state or bought under long term contracts out of state. Hot weather brought on higher usage, rolling blackouts. etc.
With little excess generating capacity of its own PG&E was forced to buy electricity out of state from suppliers without long term contracts. Because PG&E had to buy additional electricity to meet demand some suppliers took advantage of this requirement and manipulated the market by creating artificial shortages and charged very high electrical rates. The CPUC refused to adjust the allowable electric rates. Unable to change rates and sell electricity to consumers for what it cost them on the open market PG&E started hemorrhaging cash.
PG&E Company (the utility, not the holding company) entered bankruptcy under Chapter 11 on April 6, 2001. The state of California tried to bail out the utility and provide power to PG&E's 5.1 million customers under the same rules that required the state to buy electricity at market rate high cost to meet demand and sell it at lower fixed price, and as a result, the state also lost significant amounts of money.
The crisis cost PG&E and the state somewhere between $40 and $45 billion.[56] There is some evidence that this crisis played an important part in the eventual recall of California Governor Gray Davis.
PG&E Company, the utility, emerged from bankruptcy in April 2004, after paying $10.2 billion to its hundreds of creditors. As part of the reorganization, PG&E's 5.1 million electricity customers will have to pay above-market prices for several years to cancel the debt.
