The U.S. Bankruptcy Court in San Francisco extended the exclusivity period for PG&E’s plan of reorganization, but allowed regulators until Feb. 13 to provide the court with specific and credible evidence that they can produce a viable alternative. The court also ordered PG&E, the California Public Utilities Commission (CPUC) and the state to provide comments on Jan. 25 about whether a third party should be appointed to meet with them to try and attempt to resolve conflicts relating to PG&E’s plan.

“PG&E is pleased the court made it clear that any plan outline the CPUC files must be clearly credible and capable of being confirmed, and will not result in merely additional delay in the resolution of PG&E’s bankruptcy,” the utility said in a statement. “One year ago this week, PG&E’s creditworthiness was eliminated as a direct result of the CPUC’s repeated and dramatic failure to heed clear warnings from the financial community. The CPUC has had ample opportunity to resolve these problems, but has failed to do so. Since PG&E presented its plan of reorganization, the CPUC has only attempted to delay and derail the company’s effort to emerge from bankruptcy. PG&E is skeptical that the CPUC would now become a constructive party in trying to resolve the problems it has created and allowed to continue.”

Last November, the CPUC filed with the bankruptcy court its opposition to the company’s plan of reorganization under Chapter 11, calling the proposed plan a “regulatory jailbreak of a scope never before attempted in a bankruptcy case.” The Commission said the real purpose of the reorganization plan was to escape state regulatory oversight, and not simply to adjust the utility’s relationship with its creditors and restore it to financial health. Regulators said the reorganization scheme was “deeply flawed on many levels — both constitutionally and with regard to bankruptcy law” (see Power Market Today, Nov. 29, 2001).

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