| Texas energy company owed hundreds of millions in California 04/13/2001 Associated Press HOUSTON – Texas-based-Enron Corp.'s executives say financially troubled utility Pacific Gas & Electric Co. owes them $570 million, according to a letter to the utility's bankruptcy trustee.
Enron's disclosure was the first indication to Wall Street that the West coast utility owes the Houston company such a substantial amount, an energy analyst said.
"They told the investment community that their California receivables were not material and that they were fully reserved against them," M. Carol Coale, energy analyst with Prudential Securities in Houston, told the Houston Chronicle in Friday's editions. "This is not going to be received favorably."
Enron late Wednesday became one of the companies named to the creditors' committee for San Francisco-based Pacific Gas & Electric's Chapter 11 bankruptcy. The committee represents the parties with the largest claims in a bankruptcy case.
Mark Palmer, an Enron spokesman in Houston, said the company has taken adequate reserves to protect its balance sheet against any outstanding debts owed it by Pacific Gas & Electric.
Enron officials used the letter to the trustee overseeing the case disclosing how much Enron is owed as part of Enron's effort to secure a seat on the committee appointed by U.S. Trustee Linda Stanley, a Justice Department official.
A week ago, Pacific Gas & Electric filed for bankruptcy protection. The company listed assets of more than $24 billion and debts of $18 billion, including more than $9 billion in uncollected costs for power purchases.
Officials of Pacific Gas & Electric, who sell electricity and natural gas to the San Francisco and Northern California areas, say they sought Chapter 11 bankruptcy protection because negotiations with California over how to resolve the state's power crisis were going nowhere.
The case is the largest utility bankruptcy ever filed and the third largest business bankruptcy in U.S. history, based on assets, behind Texaco in 1987 and Financial Corporation of America in 1998, officials said.
Enron, scheduled to make its first-quarter earnings report on Tuesday, was expected to report 45 cents per share for the quarter, up from 40 cents per share in the first quarter of last year, according to earnings estimates compiled by First Call/Thomson Financial in Boston.
Earlier this week, Enron was dealt another setback in California when a federal judge ordered the company to keep supplying low-cost power to California's state university systems after Enron tried to shift responsibility for buying the school's power to the state's troubled utilities.
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