CPUC Dissenters Ask Fed Court for PG&E Bankruptcy Hold

With time running out for Pacific Gas & Electric?s expected emergence from Chapter 11 on April 12, two California Public Utilities Commission members petitioned the U.S. District Court to stay the bankruptcy settlement between PG&E and the CPUC. Commissioners Carl Wood and Loretta Lynch hope to stall the deal for a month in order to argue the case. Otherwise, they fear that the utility?s agreement to issue debt and pay its creditors will make their case moot. In their March 30 petition, the commissioners argue that the deal requires ?illegal abdication of ratemaking authority? by requiring that rates be based on a guaranteed rate of return for the utility and not what is just and reasonable for ratepayers. They also say that the deal conflicts with state law because it binds future commissions for the settlement?s nine-year term, ?compelling the CPUC and each commissioner to reach certain outcomes in rate proceedings and preserve existing outcomes in other rate proceedings.? Wood and Lynch were the minority commissioners voting against the PG&E settlement in late December 2003. After years of wrangling in federal bankruptcy court and other venues, a settlement was reached with the commission with several last-minute variations. The one finally adopted was an 11th-hour rendition hammered out between ratepayer advocate The Utility Reform Network and PG&E. PG&E cast the request for stay as a ?regrettable? move that would ?prevent PG&E from emerging from Chapter 11 as a financially healthy utility,? Roger Peters, PG&E senior vice president and general counsel, said. He added that it was ?irresponsible? for the commissioners to ?put our customers at risk? for increased financing costs that could be attributed to a delay in debt issuance if a stay is granted. Commissioners support PG&E?s emergence from bankruptcy, but only by paying costs that are ?just and reasonable while complying with state law,? commissioners? attorney Alan Mansfield said. The case was assigned to Judge Vaughn Walker at PG&E?s request, according to Mansfield. He added that both PG&E and the court knew the appeal was coming. Walker has judged favorably for utilities?parsing in PG&E?s favor a case against the utility by the state attorney general over the ability to pursue $5 billion the utility transferred to its parent company during the energy crisis, as well as siding with PG&E against the bankruptcy court allowing federal jurisdiction to trump state claims over utility regulation. In related action, the two commissioners refused to vote on a PG&E bankruptcy?related issue at the CPUC business meeting April 1. Both wanted to delay a vote until they heard back from district court on their motion. Wood made an impassioned statement that voting on anything to do with the bankruptcy risked sanctions in federal court because the settlement requires commissioners to uphold settlement requirements, including the issue at hand, which had to do with accounting. Wood said he faces a ?reoccurring impossible position? whenever a bankruptcy-related vote comes before the commission. Despite Easter coming up, retorted commission president Michael Peevey, ?You are not in the Passion,? referring to the movie The Passion of the Christ. Peevey added, ?I think you?ve set up a false dilemma.? The resolution, passed 3-2, approved PG&E?s tariff revisions, established balancing accounts, and withdrew other accounts.

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CPUC Dissenters Ask Fed Court for PG&E Bankruptcy Hold

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