Moved and didn't get utility bill. Paid collection will not remove account

Jn. 2007 - I moved from Sacramento to Costa Mesa on a temporary basis until I could find a place in Los Angeles. I had my mail forwarded fromSac to Costa mesa. I own a house in Sacramento and rented it out, and I still own it.
Feb. 2007 - Moved to a new place in Los Angeles. I completed another forwarding mail with the post office. This is where the problem occurred. I didn't get all my forwarded mail from this address. Apparently I had a utility bill that went unpaid for $172, which I was unaware. They had sent me a bill on three different occasions in Jan, March, and Aug, 2007.
My mail never was forwarded! I thought I paid the balance owned before I moved. It wasn't until I was looking into refinancing my house when myExperian credit score dropped from 756 in July, 2007 to 620 in August! I was told I had an unpaid account. I called PG&E right away. But I made the huge mistake of paying the bill at that moment instead of negotiating to have it removed from my report.
In the mean time, I was given the advise to report it to the creditbureaus as "not mine." And if they don't respond in 30 days, it will automatically be removed. This didn't work, as they verified it to bemine. Today I called PG&E and spoke to a representative (I was very nice and professional). I explained to her that I was never made aware of the collection...that I would have never jeopardized my great credit as a deadbeat customer and not paid a $172 bill. I have always paid my bills on time. I said by law they have to ensure that they contact me, that I never received any letters nor a phone call. She actually put me on hold (probably to talk to someone) and came back to basically tell methis "unfortunately was can't remove it because it has to be an erroron our part.
" I asked why I didn't get a phone call. She said they don't make phone calls. This just doesn't seem right that they just send out automated letters then report you to the credit bureaus. I'm sure those letters were returned to them, so they can at least call to inform me as a good faith gesture.So, I left a message with the supervisor on his voice mail in hopes that he will help me remove it.
Here are my questions:
1) I don't believe her when she said, the credit bureaus wont let herremove it unless it is their error. Can they have it removed?
2) How do I get this removed? This is not by my neglect and I workedvery hard to get my score over 750.
3) If they don't remove it, what is my next step? What would you do?
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1) most utilities will not negotiate. Actually they are telling the truth. Is is against the law to lie about credit both ways. They see you didn;t pay and it was not their fault so thats thats. Utilities do this as a means of pretecting their interest in further matters with past bad debtors which they have thousands i am sure.
2) You probably cannot have this removed and you should forget about it if possible and go on. In 2 years it will be a zero balance collection and your good current credit will swallow this bad apple and your score will go back up
3) shoot for 2 years behind thee satan.

in the end you paid your bill and did the right and honest thing. More than likely they would not have taken the bad mark off even if you had called before you paid. That's just the way they do business. I know it happened to me with Nashville Electric Service. They wouldn't even talk to me yea or ney and didn;t really care if i even paid them which i did. behind the satan.
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