The parent company of California’s largest utility told federal regulators Tuesday that its corporate structure is legal and that it should not be subject to a review requested by the state Attorney General Bill Lockyer.
San Francisco-based Pacific Gas and Electric Corp. called the issues raised in a petition Lockyer filed in July with the Securities and Exchange Commission “entirely baseless.”
Lockyer said the SEC should scrutinize the transfer of billions of dollars the utility made to the parent company before it filed for Chapter 11 bankruptcy protection April 6.
Lockyer says that the SEC, under the Public Utility Holding Company Act, should examine the impact of the transfer of money from the utility to the parent company had on PG&E’s bankruptcy filing.
Under the holding company act, the SEC can review stock and security transactions, inter-affiliate loans and issuance of securities by holding companies and utilities.
The SEC has not reviewed the holdings of PG&E Corp. because the corporation says it is an intrastate entity.
Lockyer says PG&E Corp. has assets worth $13 billion outside California, making it an interstate corporation and eligible for SEC review.
In his petition, Lockyer said $4 billion flowed from the utility to the parent company between 1997 and 1999.
“PG&E Corp. ... now asserts those billions of dollars are unavailable to PG&E Co., which is in bankruptcy,” Lockyer said in
PG&E Corp. spokesman Brian Hertzog said the utility is the only utility business the corporation operates exclusively in California.
Lockyer “is just misinterpreting or mischaracterizing what the exemption is under PUHCA,” Hertzog said. “We are exempt from it.”
“Basically we’re glad that they agree with us on one point — that there should be a hearing on this issue,” said Sandra Michioku, Lockyer’s spokeswoman.
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