PG&E Urges Court to Dismiss Bankruptcy Invalidation Brief

By Published On: August 28, 2004

A challenge by three Democratic state senators to the Pacific Gas & Electric bankruptcy settlement should be rejected, asserted the utility late last week. In an August 20 brief filed in California?s First District Court of Appeal, PG&E asked the court to toss the ?friends of the court? brief filed by Senators Debra Bowen (D-Redondo Beach), Joe Dunn (D-Santa Ana), and Martha Escutia (D-Whittier) on grounds that they cited ?no new relevant case law.? PG&E also said the legislators raised arguments duplicative of ones raised by the primary appellants?the city and county of San Francisco and the Aglet Consumer Alliance?or presented issues that were not raised earlier and thus are invalid. The trio of lawmakers, long critical of the last-minute deal, argued last month that the ?inordinately expensive? agreement approved last December by three of five California Public Utilities Commission members violated the state constitution and infringed upon legislative and commission authority. ?If permitted to stand, it represents an unlawful multibillion-dollar burden on the economy of Northern California, imposed and enforced? by a federal bankruptcy court, argued the amicus brief. PG&E countered that the deal was bona fide, pointing to the post?energy crisis recovery agreement between the CPUC and Southern California Edison as precedent for allowing the CPUC to ?bind future commissions to a rate settlement.? Contrary to the legislators? claims, PG&E asserted, the federal bankruptcy court ?did not force the settlement? but ?merely approved a settlement? the commission ?voluntarily entered into.? Bowen, Dunn, and Escutia also specifically attacked the provisions allowing the utility to collect an 11.22 percent return on equity until it reaches specified credit ratings and creating a $2.21 billion regulatory asset, which they claim interferes with the commission?s authority to determine whether the costs are ?just and reasonable.? PG&E said that the senators failed to point to any statute that expressly prevented the CPUC from approving a regulatory asset ?to address a utility?s past undercollection costs.? In mid-April, San Francisco and the Aglet Consumer Alliance petitioned the state appellate court for review of the settlement because it ?ordains some of the most far-reaching impacts of any rate case ever decided by the commission? (<i>Circuit</i>, April 23, 2004). CPUC members Loretta Lynch and Carl Wood, who fought the settlement, filed suit in federal court early this year, but their challenge was rejected by district court in April. <i>(No. A106157)</i>

Share this story

Not a member yet?

Subscribe Now