Critics want specific plans for PG&E’s bankruptcy revival

By Karen Gaudette Associated Press Writer
Wednesday December 05, 2001

SAN FRANCISCO (AP) — Critics of Pacific Gas and Electric Co.’s plan for emerging from bankruptcy have filed about 70 complaints at federal bankruptcy court. 

Many have asked that California’s largest utility be more specific about its wishes to shift control of its power plants and transmission system from state to federal regulation, as well as plans to borrow against those assets to raise $13.2 billion to pay creditors. 

PG&E says its plan is the best method to pay its thousands of creditors, climb out of bankruptcy and buy its own electricity rather than rely on the state. 

But critics contend that losing state control of the utility’s hydropower facilities, nuclear power plant and natural gas and electric transmission systems could result in higher rates for customers, and less control over power prices for all Californians. 

Creditors, opponents and PG&E were set to meet in bankruptcy court Tuesday afternoon, and state officials were expected to ask U.S. Bankruptcy Judge Dennis Montali to hold a trial separate from the main proceeding on PG&E’s request that he override state law and let the utility transfer those assets. 

Both the state Public Utilities Commission and the Attorney General’s office have filed complaints against PG&E’s reorganization plan. They say state law bars PG&E from transferring or selling power plants to a federally regulated affiliate. 

Consumer advocates, such as The Utility Reform Network, worry such a transfer would mean the loss of relatively cheap electricity for the state, and that rates eventually could rise again. 

Under state control, PG&E must work with the PUC, and hence, the public, to set prices for power from its plants. State lawmakers stopped PG&E and other utilities from selling their power plants when the new out-of-state owners of those plants allowed prices to soar. 

Ron Low, a PG&E spokesman, said the utility opposes a separate trial on these issues because “the issues raised by the Attorney General and the PUC can be addressed through the normal confirmation process.” 

Low added that the issues raised by the PUC and AG’s office are not listed within the bankruptcy code as such that qualify for a so-called adversary proceeding. 

Calls to the PUC and the Attorney General’s office were not immediately returned. 

California’s largest utility has asked federal regulators for permission to use its assets to form three new power companies. 

On Friday, PG&E filed six applications totalling about 20,000 pages with the Federal Energy Regulatory Commission and one application at the Nuclear Regulatory Commission. 

The utility, which filed for Chapter 11 bankruptcy protection April 6, must wait for a judge to approve its plan of reorganization before it can emerge from bankruptcy, into which it slid after a state rate freeze left it unable for months to collect the full price of electricity from its customers.