California's energy emergency lurched into a new phase yesterday as Pacific Gas & Electric, the state's largest utility, declared bankruptcy and accused governor Mr Gray Davis of mismanaging the crisis.
While officials assured Californians that the bankruptcy would have no immediate impact on power service to some 13 million people it put a question mark over the state's ability to get through the summer without power blackouts.
The bombshell move came just one day after Mr Davis outlined a bailout strategy he said would help the cash-strapped utility back to its feet after months of haemorrhaging cash after California's botched 1996 power deregulation law.
Pacific Gas & Electric blamed Mr Davis for forcing it into bankruptcy, saying his plan to save it was unacceptable. It charged that in the last three weeks the governor had only bothered to hold one face-to-face meeting to bargain directly with the utility. Mr Davis' spokesman Mr Steve Maviglio said the governor was "surprised" by the utility's decision.
Analysts said the filing marked the biggest utility bankruptcy in US history and could throw a wrench into Mr Davis' efforts to resolve the power crunch.
In its Chapter 11 filing the utility said it owed close to $9 billion because of California's 1996 power deregulation, which blocked utilities from passing along skyrocketing wholesale power costs to consumers.
