PG&E Moving Ahead with Bankruptcy Reorganization Plan

Regardless of whether state regulators change the present proposed decision on rate coverage for the Department of Water Resources' (DWR) power buying, Pacific Gas and Electric Co. will move ahead with its proposed bankruptcy reorganization plan which should be filed "well before" its current Dec. 6 deadline. Sources close to the San Francisco-based utility indicated the expected filing could come at any time in the next few days or weeks.

During a conference call last week with investors and debtholders, PG&E reiterated that it would not say precisely how far in advance of the Dec. 6 date it will make the bankruptcy filing, and it cannot comment on whether the plan's goal will be to restore the utility to an investment-grade credit rating.

Even ahead of the plan being filed, PG&E said it has now amended more than 200 of it qualifying facility (QF) contracts, representing about three-fourths of the supplies it receives from QFs, covering the next five years at a fixed cost outlined earlier by state regulators. PG&E now has no outstanding QF litigation, according to the utility CFO Kent Harvey.

In the meantime, the utility is filing with the California Public Utilities Commission to have a $4.1 billion rate base established for its hydroelectric system, based on current market value of the extensive network of 68 water-powered powerhouses and related watershed acreage. This relates to a separate CPUC proceeding to determine the private-sector utility retail rates for their retained generation. It won't be completed until later in the fall, according to CPUC and utility sources.

PG&E corporate and utility officials reiterated their strong opinion that DWR needs to hold a public hearing to clarify its disputed revenue needs now before the CPUC and the subject of draft decisions issued Monday that caused PG&E to object to the regulators' initial proposal to shift $500 million in revenue requirement from Southern California Edison Co. to PG&E utility customers.

They noted that PG&E most likely would have to file with the CPUC for reconsideration of its eventual DWR rate decisions, expected Sept. 6, and it the regulators' deny the rehearing, then proceed to a court challenge.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.