In a packed courtroom filled with anxious creditors, a federal bankruptcy judge gave the Pacific Gas & Electric utility the authority Tuesday to make payments to customers and suppliers of both gas and electricity, and set a hearing for April 18 on the utility’s request for an injunction against state regulators’ orders for accounting changes related to past electricity stranded cost collections of billions of dollars.

On the gas side, the judge okayed PG&E utility operations to provide securitization to suppliers to assure future payments. “For the very short term, we are securing enough gas for our customers and to put into storage,” said PG&E’s San Francisco-based spokesperson Staci Homrig.

Longer term, however, PG&E is not sure how the Chapter 11 proceedings might impact gas operations, she said. Nervous gas suppliers, some with bills running $50-60 million a month, have the advantage of the utility’s retail gas rates not being frozen, as are its retail electric rates under the state’s 1996 electric industry restructuring law.

PG&E’s utility electricity spokesperson Ron Low said the company is negotiating with the CPUC, at the court’s behest, on the accounting procedure issue, for which a regulatory deadline for submitting data was extended from today to April 26. In the meantime, the court will hold its hearing on the utility’s request for a stay of the CPUC action as it relates to Pacific Gas and Electric.

Much of the initial work of the bankruptcy court is to grant motions that allow the utility to pay suppliers, employees and other creditors going forward, with a date of May 9 for ruling on a lot of motions following the first major court session with creditors (May 8).

A different side of the utility bankruptcy was heard in Los Angeles where Gov. Gray Davis on Monday did not mince words about PG&E while announcing Southern California Edison Co. would be selling its transmission assets to the state. Davis made it clear he is unhappy with the PG&E utility’s decision last Friday to file for bankruptcy rather than continue to negotiate with the state.

“Even though I think PG&E has acted arrogantly and selfishly, they walked away from the bargaining table, but if they come back, we are certainly willing to give them (Edison’s) proposal as well. Last Tuesday (April 3) we gave them the outlines of this proposal, so they knew pretty much where we were going with Edison.

“This proposal worked with Edison; I think it will work more or less with Sempra, and I think it is the basis of an agreement with PG&E if they decide to come back to the table.”

In response to questions about PG&E’s decision to give annual bonuses and raises to about 6,000 non-union employees the day before filing for bankruptcy, Davis said he thought it was “certainly inappropriate to be padding your pockets and then diving into bankruptcy. Keep in mind, the creditors of PG&E had more faith in our negotiations than PG&E did. Now, Edison had faith and Sempra had faith, but PG&E for its own selfish reasons dove into bankruptcy and along the way padded their pockets. I think that is not in the public interest, if not illegal, but it certainly doesn’t have a good odor about it.”

Nevertheless, the governor reiterated several times that the state needs all its major utilities back in financial good health, serving customers, so the state still wants to “offer PG&E the same thing given to Southern California Edison.” He said the state is certainly willing to go back to the table.

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