With heavy pressure from the state’s largest utility, a California Assembly committee Wednesday rejected an eleventh-hour attempt to push an alternative to the pending settlement between Pacific Gas and Electric Co. and state regulators. The Utility Reform Network (TURN) claimed the measure would save retail electric utility consumers $2.8 billion over the next decade, compared with the utility-regulator settlement.

The Assembly committee on a 3-5 vote with six committee members abstaining rejected a hastily pulled together proposal by Sen. Debra Bowen (SB 772). While the bill could be brought up again in the wild scramble that always marks the last two days of the state legislative session, officials on both sides of the issue said that was “unlikely.”

“We think it is pretty much dead,” said Evan Goldberg, Bowen’s chief of staff, who cynically gave a lot of “credit” to the PG&E lobbying forces for killing the bill. The headline on a press release from Bowen was: “PG&E Works Overtime to Beat Ratepayers — Again.”

Meanwhile, the California Public Utilities Commission has started evidentiary hearings on PG&E’s proposed bankruptcy settlement, which is designed to get the utility subsidiary back to investment-grade credit standing before the end of the first quarter of next year.

Bowen said it was “ridiculous to say that the CPUC shouldn’t have the option of using a financing tool that could cut the ratepayers’ costs associated with helping PG&E get out of bankruptcy.” She supported TURN’s claims of a $2.8 billion savings, even though PG&E’s utility and others rebutted the claims in a filing with the CPUC last Monday.

TURN had support from major business and agriculture associations, but Bowen said that PG&E made a strong pitch to the Assembly legislators that the proposed settlement needed to stay in place to allow it to emerge from bankruptcy early next year.

The committee chairperson said she agreed it was essential that the utility’s bankruptcy be resolved, but not under a plan she said was “going to soak ratepayers for the next decade so PG&E shareholders can watch their dividends go up.” Bowen said the value of the utility holding company, PG&E Corp., in fact, has increased by what she called more than 20% since the April 2001 bankruptcy filing.

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