Preliminary voting results presented by PG&E to a federal bankruptcy court in San Francisco last Wednesday showed that 97% of the company’s utility creditors favor its Chapter 11 reorganization plan as embodied in a proposed settlement with state regulators.

What the utility called “overwhelming support” will be formally submitted to U.S. Bankruptcy Judge Dennis Montali this week, the utility said in a prepared announcement. The plan received approval from all creditor classes, according to the company, which believes the voting results are an “indication that the proposed settlement [with the California Public Utilities Commission] will resolve the Chapter 11 case in a manner that is fair to customers, employees and shareholders.

“It will allow the utility to resolve creditor claims, reduce customer rates beginning in 2004, and emerge from Chapter 11 as a financially healthy, investment grade company.”

Earlier this month, the utility announced that outside of bankruptcy court it reached agreement with several government agencies and other parties on the extensive land conservation measures that make up part of the proposed settlement with CPUC staff. The settlement is currently being litigated in an administrative law proceeding at the state regulatory commission. Both the CPUC and bankruptcy court processes are on separate but parallel tracks to be concluded at the end of this year, or early next year.

In a filing to the CPUC on Sept. 26, the utility completed the so-called “conservation lands stipulation” of the settlement. That stipulation places conservation easements on 140,000 acres of watershed land near PG&E’s hydro-electric utility facilities and another 655 acres in the Carizzo Plain in San Luis Obispo County where the PG&E’s Diablo Canyon nuclear generating plant is located.

Since the June 19 proposed PG&E-CPUC settlement, a revised reorganization plan was submitted to the bankruptcy court and eligible creditors had the chance to vote on it between Aug. 15 and Sept. 29. Bankruptcy confirmation hearings are scheduled to begin Nov. 10. CPUC hearings on the proposed settlement were completed Sept. 26 when the watershed stipulation was filed.

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