Governor Gets PG&E Refinancing Bill

By Published On: May 29, 2004

The bill expected to help save Pacific Gas & Electric ratepayers several hundred million dollars in bankruptcy costs finally emerged from the Senate this week. SB 772 by Debra Bowen (D-Redondo Beach) now heads to Governor Arnold Schwarzenegger?s desk. Even without the governor?s signature?which must be applied within 12 days?the measure would still become law, allowing PG&E to pursue alternative financing through new bonds and a regulator-approved dedicated rate component. In response to the 33-0 Senate floor vote May 24, Bowen reiterated her disdain for the settlement that resolved the utility?s bankruptcy, regarded by some as excessively expensive. ?There isn?t enough lipstick in America to put a pretty face on that settlement, but this will make it a lot cheaper and put $1 billion into the pockets of PG&E?s ratepayers instead of shareholders and executives,? she said. PG&E senior vice president Dan Richard praised the bill?s passage as a necessary step not only toward the utility?s financial health but for California as a whole. PG&E noted in a statement that its planned debt refinancing can take place only if the deal does not sap the utility?s credit ratings, among other criteria. PG&E has not yet determined whether it will complete the financing in one step or in two separate packages one year apart. The decision is tied to the outcome of electric refund cases still before federal regulators. California Public Utilities Commission president Michael Peevey also voiced his approval of the SB 772 vote, noting the estimate of ratepayer savings anticipated from the bill. The $1 billion figure, however, is not guaranteed, and PG&E pointed out that the tally is simply ?an estimate based on current financial conditions.? Bowen?s SB 1488, which according to the senator would require state regulators to reverse the presumption that all utility records must be kept from the public, is on its way to the Assembly. The bill passed the Senate May 26 on a 28-8 vote. The bill would hold the California Public Utilities Commission to the Public Records Act, under which all information provided to the agency would remain public unless the CPUC specifically seeks to keep it confidential (see <i>Circuit</i>, March 26, 2004). In other bill news, AB 2197 by Assemblymember Greg Aghazarian (R-Stockton) found itself gutted and amended this week at the hands of the Assembly Appropriations Committee. The bill would excuse big hydro dams in the state from the Department of Water Resources? (DWR) safety inspection program. Per-dam inspection fees shot up this year as a result of SB 1049, passed in 2003. Aghazarian argues that because the Federal Energy Regulatory Commission already performs the same examinations, the state reviews are unnecessary. In-state dam owners already have their own engineers performing inspections, according to Gail Delihant, legislative director for Aghazarian. Moreover, federal inspectors closely monitor state dams, including any seismic activity in the area. ?They look at everything. If these dams go down, they?re just as liable as the state would be,? Delihant said. AB 2197 would have pulled $2.6 million from DWR?s inspection program beginning in 2005-06, which would have amounted to laying off 20 state engineers, Delihant said. But lawmakers appeared edgy about curtailing DWR?s survey activities, and the bill now calls for an advisory group to be convened at the direction of the Resources Agency by February of next year. The stakeholder group, to which FERC would be invited, would hash out any discrepancies between state and federal inspection programs and decide how to proceed. Delihant said she is ?very optimistic? about the panel and hopes that the governor, whose California Performance Review team is said to be already reviewing the issue, will see little difference between the programs and defer to federal regulators. ?I don?t think there?s another state in the U.S. that still inspects its own dams,? she said. AB 2197 passed the Assembly on a 74-1 vote on May 27. It will be taken up next by the Senate. Speaker Fabian N??ez?s AB 2006 heads to the Senate after being passed by the Assembly on a 50-28 vote May 27. Support came predominantly from Democrats, and N??ez and Assemblymember Keith Richman (R-Northridge), who has a pending direct-access bill, are expected to work together on a compromise on their two measures.

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