Munis to Charge PG&E Refinancing Bill

Outraged public power agencies are determined to defeat the Pacific Gas & Electric bankruptcy refinancing bill because the latest version would make it virtually impossible for munis to expand their rate base, they say. Any new customers of a public power agency would be saddled with a share of the refinancing fee although they were never served by PG&E (see Circuit , April 2, 2004). The Merced Irrigation District would be hit particularly hard by the latest version of SB 772 by Senator Debra Bowen (D-Redondo Beach) because its service territory is not exclusive. Any new MID customer on newly developed land on which PG&E can compete for customers would be hit with a fee to help the investor-owned utility cover its debt refinancing. The bill would replace PG&E?s financing for a $2.2 billion phantom regulatory asset with a dedicated rate component. This would shift financing from the market price backed by a barely creditworthy utility to a lower-priced financing backed by ratepayers. ?PG&E is making it difficult for us to live,? said Garith Krause, MID executive director. The Modesto Irrigation District would also be seriously affected because parts of its territory and PG&E?s territory overlap. New customers that Modesto won in those regions would also be hit with a fee. The dedicated rate component cost would be on top of exit fees.

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Munis to Charge PG&E Refinancing Bill

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