In a sign creditors are not all on board, Pacific Gas and Electric Company Tuesday filed a request with the U.S. Bankruptcy Court in San Francisco to get an extra four months until Dec. 6, 2001, to file a reorganization plan in its Chapter 11 case. Under the current timeframe, the deadline to file such a plan is Aug. 6, 120 days after the company’s April 6 Chapter 11 filing.
Calling its case “one of the largest and perhaps most complex” bankruptcy proceedings ever, the PG&E utility noted that there are a number of unresolved regulatory issues and proceedings pending, including the federal settlement discussions that began June 25, also weighing heavily on the eventual reorganization plan. The utility assured the court it had no intention of delaying the case and it is already “well into the process of plan formulation” in a proceeding in which the utility estimates costs run “literally millions of dollars-per-week.”
The San Francisco-based utility followed up with another court filing Thursday asking for authorization to ultimately pay $76 million in franchise fees in 267 cities and counties where it provides electric services, 238 for natural gas and four for oil pipeline operations.
Saying it has an “open and close working relationship” with its official unsecured creditors’ committee, the PG&E utility said in its filing to the bankruptcy court that it wants to develop a reorganization plan that has “broad creditor support.” The massive utility has 45,000 creditors, $20 billion in assets and 20,000 employees.
“Developing and filing a sound, comprehensive and feasible plan of reorganization is the most important step we can take toward completing the Chapter 11 process as expeditiously as possible,” the utility said in a prepared statement. “Our request for an extension is intended to allow us the time necessary to ensure that the plan we present is the appropriate blueprint for meeting our obligations to creditors and emerging from Chapter 11 with our financial strength reaffirmed. The development of this plan is a top priority and our objective is to file it as soon as practicable.”
PG&E’s extension request “doesn’t surprise me,” said David Wiggs, interim general manager at the Los Angeles Department of Water and Power and the CEO at El Paso Electric Co. when it when through bankruptcy (1992-96), who noted that based on his experience the utility wants to take extra time to file a plan that has as much up-front support from creditors as possible. “The issues they are facing as to who owns what part of the rates are very complicated and make a big difference to the creditors. That is going to take a while.
“Compared to Texas, this (PGE’s case) is much more difficult, much more complicated. Now the state is in the business of buying power and financing that. It took El Paso four years and $100 million, and we solved it really with a political solution that could have been done and effectively offered before we went to bankruptcy.”
LADWP is one of the creditors (about $80 million of unpaid bulk spot power supplies to the state transmission grid operator, Cal-ISO, or the now defunct California Power Exchange) and has retained its own outside bankruptcy attorney to protect the interests of the nation’s largest municipal utility.
PGE’s utility characterized its ongoing, regularly scheduled meetings with the creditors committee as “productive discussions” that are “helping to inform our development of the most feasible plan of reorganization.
“In the event further analysis is needed or additional meetings with our creditors are desired in order to ensure that the plan we file has their support, this extension provides extra time for these efforts.”
Â©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.
© 2021 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |