PG&E Gas Transmission Texas (PG&E GT-T), a subsidiary ofPG&E Corp., said it will appeal a judgment handed down lastweek in the 92nd district court in Hildalgo County, TX, regardingfranchise fees, even though the judge reduced the August 1998 juryverdict.

The case, in which PG&E GT-T and several affiliates andother companies were defendants, involved franchise fees inconnection with the local distribution company’s gas operations inthe city of Edinburg and the conduct of various defendants (seedaily GPI July 6, 1998). The jury verdict found for the plaintiffsin City of Edinburg v. Rio Grande Valley Gas Co., et al, but, inentering the judgment, Judge Westergren reduced the verdict from$9.8 million to $5.3 million for damages, plus attorneys’ fees andinterest.

“This litigation and other similar suits have arisen due tochanges that have occurred in the natural gas industry since themid-1980s,” said Luis de la Garza, vice president of corporaterelations for PG&E GT-T. “Due to the deregulation in the gasindustry, customers were no longer required to purchase all oftheir gas from the local distribution company. With cheaper gasavailable from other suppliers, these customers began purchasinggas from companies other than the local distribution company. Whilecustomers have been receiving less expensive gas, the cities haveseen a reduction in payments under their franchise agreements,”said de la Garza.

“We are confident that, on appeal, the courts will reverse thejudge’s decision, because the evidence presented at the trialclearly shows that the defendants abided by the franchise agreementand conducted themselves in a legal and proper fashion.”

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