This is a partial transcript from Your World with Neil Cavuto, February 14, 2002. Click here for complete access to all of Neil Cavuto's CEO interviews.
NEIL CAVUTO, HOST: Energy companies getting a bad rap in light of Enron. PG&E, the California energy giant made famous by Erin Brockovich, is struggling with a solution for its financial woes. The state of California is throwing its two cents in and offering its own solution.
Joining me now today to talk about PG&E and what's next is Robert Glynn. Mr. Glynn, the president and the CEO. Good to have you back, Mr. Glynn. Thanks for coming.
ROBERT GLYNN, PRESIDENT & CEO, PG&E CORPORATION: Nice to be here, Neil.
CAVUTO: They won't let you re-regulate yourself the way you want, essentially, right?
GLYNN: Well, they have a plan that has been announced in term sheet form yesterday. It's a plan that we don't think will work because it overestimates the amount of cash that will be available and underestimates the amount of debts that have to be paid and it probably misunderstands what credit worthiness really means in the eyes and minds of the financial community.
CAVUTO: What they are saying, Mr. Glynn, as you know, is that they are afraid that you want to shuffle off a lot of the responsibilities for oversight of your company to the federal government. They claim that the federal government is a lot more lenient on the type of issues like energy controls and that sort of thing, and that you'd be getting away with high-tech murder. What do you say?
GLYNN: There's a huge amount of federal regulation of our facilities already. And so, the fact that there's Nuclear Regulatory Commission oversight over much of what do, Federal Energy Regulatory Commission oversight, USCPA oversight — it's not a monumental shift. There certainly would be a reduction in the role of the California Public Utilities Commission, but not a reduction in the role of other important California environmental agencies, for example.
CAVUTO: They have called you, fairly or not, Mr. Glynn, that you're really the next Enron and that you have been caught up by the same sort of downdraft in the market that a lot of energy companies whose businesses who are similar to Enron have been caught up in. Answer your critics who say you're another Enron.
GLYNN: Well, the facts certainly don't support something like that. We have very clear disclosures about what our business does. They are understandable to our investors and they are accurate. We have a business that has a very substantial amount of assets and we have got real who want to get supplied from those businesses every minute of every day. I think that a comparison like that just fails on its face because of the facts.
CAVUTO: They cite, as you know, Mr. Glynn, you've dealt with this, you know, ad infinitum, that your PG&E energy services venture was akin to some of these partnerships that Enron had, and that it was a money hole and that they are afraid that if you come back the way you were, it will be a new money hole. What say you?
GLYNN: When we started that business, we said publicly that we would invest up to a $100 million and give it three years and see if it looked like it was going to be a business that was good for customers and profitable for investors. As we went through the three years, it didn't fail that test, so we closed the business. It's that simple.
CAVUTO: So, it wasn't as if there was, you know, just getting rid of something that you could get headaches on later?
GLYNN: The business just wasn't meeting the financial targets that we needed to get from it.
CAVUTO: Now, if they keep fighting you with the type of reorganization that you want, and you want a different reorganization, I mean, what is going to happen to you?
GLYNN: Well, I think that the state, to the extent that some parts of the state either have questions about our moving forward in our plan or have ideas about an alternate, need to recognize that the objectives that we're shooting for, in large part, are similar. Certainly, the governor has said that he wants creditworthy utility companies so that they can resume buying power that the state has to buy.
Well, that's what we want to get to. There may be a difference of opinion about what creditworthy means. And I think that the financial markets will speak for themselves when they get a chance to look at the term sheet that the state has out and compare it to our plan.
CAVUTO: Had Enron not gone belly-up, do you think that you would have ultimately gotten this through?
GLYNN: I don't think that the Enron issue has a substantive involvement in moving through the bankruptcy court. I think it has a headline involvement, but I don't think it has a substantive involvement.
CAVUTO: Mr. Glynn, thank you so much. Appreciate it.
GLYNN: Thank you.
CAVUTO: Robert Glynn of PG&E.
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