Calling it a “fairy tale” and “nothing more than smoke and mirrors,” bankruptcy-bound Pacific Gas and Electric Co. late Thursday counter-attacked one of its severest critics, the utility consumer group, TURN, alleging that it “misstated the truth, manipulating facts” in an analysis released earlier in the day that attacked the utility’s proposed Chapter 11 reorganization plan. Even for these two long-time public adversaries, the rhetoric was particularly harsh.

“TURN (The Utility Reform Network) has started up its fog machine to deliberately cloud the truth and obscure the facts of PG&E’s plan of reorganization,” the utility said in a prepared statement released about six hours after a TURN press conference. “Their tables, pie-charts and full-color graphs — which purport to show $20 billion in excess costs to ratepayers — are premised on misrepresentation and factual inaccuracy.”

As the state’s oldest utility consumer watchdog group, TURN announced Thursday it has completed an analysis of the PG&E utility’s Chapter 11 bankruptcy court proposed reorganization, calling it “highway robbery” designed to enrich shareholders at the expense of utility ratepayers by transferring generation and transmission operations out of the state-regulated utility.

Contrary to the utility’s claim in its bankruptcy court filings that the proposed reorganization would not result in any utility rate increase, TURN alleged that by its analysis consumers would pay as much as $20 billion over the next 12 years in higher charges that the transferred generation and transmission operations would charge the remaining utility for their services.

In its response, PG&E disputed the allegations that spinning off its nondistribution parts of the utility will include the transfer of billions of dollars in areas such as the nuclear decommissioning monies accrued for the utility’s Diablo Canyon power plant or monies that might be gained from a favorable ruling in the so-called “filed rate doctrine” federal lawsuit against the state regulatory commission.

“In both its FERC filing and in a public letter to the California State Assembly, the utility very clearly pledged that should it prevail in that suit, it will not double-collect any costs associated with the filed rate doctrine case,” PG&E said in its statement. The utility cited a number of alleged “misrepresentations and untruths” in the TURN report, including the claim that a state emergency law passed last winter required cost-based ratemaking in California, or the fact that PG&E thinks TURN should have mentioned that it was one of the willing settlement parties when PG&E two years ago proposed spinning off its hydro-electric system.

“TURN once again cooks the books in order to support a false conclusion,” PG&E’s statement said.

The author of TURN’s analysis, attorney Matt Freedman, told a press conference in San Francisco that the bankruptcy plan will “almost double” the utility’s cost of generation. He argued that there are other “hidden costs and revenues” that PG&E’s nonutility operations will reap, including the utility passing on to the parent company, PG&E Corp., any refunds that are eventually granted from last year’s dysfunctional western wholesale electricity market, for which the utility is seeking $9.2 billion in its ongoing federal lawsuit under the so-called “filed-rate doctrine.”

TURN was joined in its opposition to the PG&E utility reorganization plan by western representatives of the Consumers Union, the San Francisco city attorney and local labor union leaders who are conducting an informational meeting with their members today. When asked, TURN’s executive director Nettie Hoge said she was unsure how, or if, TURN would present its analysis to the PG&E creditors’ committee or the bankruptcy court.

“This scheme would be even more disastrous for consumers than the deregulation deal that got us here,” Hoge said. “PG&E wants to use this bankruptcy proceeding as a cover to raise rates and avoid state oversight. The plan has more to do with enriching the company than paying the creditors.”

As part of its report, TURN said it has developed an alternative plan for the PG&E reorganization which will be presented to the bankruptcy court, similar to what the California Public Utilities Commission is planning to do.

“The city of San Francisco has taken a strong position in court that the company’s bankruptcy reorganization plan is illegal and against the public interest,” said Dennis Herrera, San Francisco city attorney. “This report by TURN lays bare the facts and shows just how harmful PG&E’s plan is to California.”

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