PG&E Corp. said Friday in a Securities and ExchangeCommission filing that it will take a charge of $6.9 billionagainst 2000 financial results, unless there is a regulatory orlegislative solution to its multi-billion-dollar credit crunch. Thered ink is caused by the past-due bills for wholesale power andunpaid debt and interest tied to the fact that the company’sutility, Pacific Gas and Electric Co., for nine months has beenpaying significantly more for electricity than it is permitted tocharge in retail rates, which have been frozen at 1996 levels. Evenlast week’s 3-cent/Kwh rate increase decision by state regulatorsleft retail rates frozen, imposing the increase as a surcharge.

Under SEC rules, PG&E now is supposed to file an annualreport with the federal regulatory body by April 16, according to aPG&E spokesperson in San Francisco, based on a two-weekextension the utility holding company asked for Friday. Its 8-Kfiling summarized last week’s California Public UtilitiesCommission actions; and updated its liquidity and financialpositions, noting that as of March 29, the utility had $2.6 billionin cash reserves, but if it brought all of its current debtpayments up to date, that figure would be a negative $1.8 billion.It set its current unpaid wholesale power bills at $8.9 billion.

Without any settlement on the horizon that would allow theutility to get full recovery of the past and future wholesale powercosts, for financial reporting purposes only, the reported commonstockholders’ equity “potentially could be below zero for theutility during the first quarter of 2001, assuming the (state gridoperator) Cal-ISO continues to charge the utility’s net (short)position not covered by the state water resources department,”PG&E said in a summary of the SEC filing.

Further complicating the picture for PG&E is the fact thatit estimates another $1.5 billion of bills and unpaid debts willcome due this month due to a combination of the Cal-ISO emergencypurchases, qualifying facility (QF) generating supplies and naturalgas suppliers. The unpaid natural gas bills coming due total about$470 million, according to a PG&E spokesperson.

Among the actions by the CPUC, PG&E said it filed stronglynegative comments to the regulators’ proposed allocation of utilityrevenues to the state DWR for the power it is purchasing. “Theutility believes the proposed method is unlawful and inconsistentwith (a part of the new state law authorizing the state to buyelectricity) because it does not allow for recovery of theutility’s own revenue requirements and cost of service,” PG&Esaid in the 8-K filing.

©Copyright 2001 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.