PG&E in California just declared bankruptcy, and Edison International looks like it will follow suit. This is generally interpreted as a raising of the stakes, putting more pressure on the governor. And it seems clear that much of what the governor has proposed in the last few months has had the purpose of staving these bankruptcies off. But I'm not sure I understand the consequences of bankruptcy why it's therefore such an obviously bad thing for the state. Why doesn't bankruptcy simply force the shareholders, who profited from distributed state assets, to now eat the losses caused by the companies' fatally bad decision on rate caps? Why doesn't this solve the problem by liquidating the losses? And isn't there any way the state can simply take over the grid under the "overriding public interest" provisions of eminent domain at distress prices and let the creditors decide how they want to divvy up the money in accordance with their shares?
Michael
__________________________________________________________________________ Michael Pollak................New York City..............mpollak at panix.com