Exploring yet another legal avenue, Pacific Gas and Electric Co.Wednesday filed in San Francisco’s federal district court askingfor a judicial ruling that will mandate that it can recover all ofthe nearly $3 billion in uncollected wholesale electricity coststhat have been mounting since May when price spikes in Califonia’smarket left the state’s major investor-owned utilities vulnerablebecause their retail power rates are frozen at 1996 levels.

The utility argued that the wholesale power costs are federallyapproved, therefore, it filed in federal court. Earlier in thefall, PG&E appealed to the California Supreme Court, asking tooverturn a California Public Utilities Commission decision thissummer that limits its ability to recover its wholesale costs,which it passes on to customers without adding a profit charge.

“We’re just keeping our legal options open,” said a SanFrancsco-based utility spokesperson, noting that the utility also isattempting to protect its financial status, which was challengedTuesday when Fitch placed it and another California utility on a”rating negative watch.” (see Daily GPI, Nov. 8)

State and federal officials all acknowledge as part of a seriesof ongoing investigations that California’s current wholesaleelectricity market is broken and noncompetitive in its currentstate, said Roger Peters, senior vice president and general counselfor Pacific Gas and Electric. “However, there has not yet been anyconcrete action by regulators to provide for recovery of the costswe have incurred to purchase the power our customers must have,either through refunds from power sellers who charged unfairprices, or through retail rates. These costs are continuing togrow.”

Noting both the unfairness and unpopularity of the skyrocketingwholesale charges, PG&E’s utility nevertheless said it has alegal right to recover the charges from its almost four millioncustomers, and it reiterated five steps it has taken to “increasesupply, moderate customer demand, repair the broken wholesalemarket and provide stable, reasonable rates.”

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