Settlement talks have broken down for regulatory cases involving the 2010 San Bruno, CA, natural gas transmission pipeline rupture and explosion, and Pacific Gas and Electric Co. (PG&E) now expects to litigate the issues at the California Public Utilities Commission (CPUC), according to PG&E Corp. CEO Tony Earley.
Earley told analysts during an earnings conference call Thursday that he expects the CPUC proceedings can be wrapped up by the end of this year. Profits in 1Q2013 were essentially flat from 1Q2012 at $239 million (55 cents/share), compared with $233 million (56 cents).
Filings of parties in the fines and penalties phase of the CPUC proceedings are scheduled to be made later this month with an initial administrative law judge’s decision this summer, PG&E executives during a conference call last week.
“While we remain open to settlement, it now appears that the most likely path will be completion of the litigation,” said Earley, who last year was predicting a settlement would be reached by the end of 2012. “Even though it is a slower process involving briefings, we believe the CPUC proceedings will be completed this year.”
Earley told analysts that there had been no active settlement negotiations “for some time, but we continue to indicate we are open to those talks.” Once the regulatory case gets into the briefing stages, however, “positions become more hardened, and that is why I think the most likely outcome is that we just continue through the [CPUC] litigation process…
“We can see the light at the end of the tunnel; we can work our way through the process and certainly get it done this year.”
CFO Kent Harvey said PG&E would “continue to expect to need roughly $1-1.2 billion of equity for the year, excluding any fines or penalties beyond the $200 million we’ve already accrued. Of that, we issued about $430 million in 1Q2013.”
Earley said a litigated decision would not limit the flexibility that the CPUC would have in issuing disallowances for utility rate coverage and/or fines. However, he thinks other parties won’t be able to get concessions in a litigated decision while they could in a settlement.
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