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PG&E won't pay dividends
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January 10, 2001: 7:12 p.m. ET
Pacific Gas and parent company eliminate dividends, also delay 4Q earnings
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NEW YORK (CNNfn) - PG&E Corp. announced Wednesday that it will not pay its fourth-quarter dividend of 30 cents a share, while its beleagured California utility unit, PG&E Co., will also not pay the $110 million dividend declared in October.
San Francisco-based PG&E Corp. (PCG: Research, Estimates) will delay release of its financial results for the fourth quarter as it awaits the outcome of state and federal intervention into the California power crisis. PG&E Co., the subsidiary, will also not declare the regular preferred stock dividend for the quarter ended Jan. 31 which is payable on Feb 15.
PG&E Corp. is experiencing a cash crunch and has initiated a series of cash conservation measures, such as deferring annual merit salary increases and suspending charitable contributions. These efforts could affect the corporation's results for the quarter and for the last year as a whole, the firm said.
 Future payment of dividends will depend on both firms restoring their financial health, PG&E said in a statement.
Earlier Wednesday the utility subsidiary announced it did not have sufficient cash to pay its ongoing bills. It has run up billions of dollars of debt buying power on behalf of its customers at record prices which it cannot pass on under California's heavily criticized deregulation laws.
Pacific Gas and Electric Co., California's largest utility, asked Calif. Gov Gray Davis Wednesday to use his emergency powers to enable it to obtain natural gas for its customers. PG&E Co. is facing an imminent shortage of natural gas for its core customers because banks are refusing to extend new loans and suppliers will not sell on credit.
"The utility's decision to eliminate the dividend payments is a necessary step and in the best interest of its ability to continue serving customers," said Robert Glynn, PG&E Corp.'s CEO.
Both firms plan to evaluate their ability to pay dividends in the future on a quarter-by-quarter basis.
PC&E gained 6 cents to close Wednesday at $13.56. Fellow California utility Edison International (EIX: Research, Estimates) gained 12 cents to close at $11.25.
-- from staff and wire reports 
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