Calif. High Court Rejects Claim That PUC Improperly Devised Bankruptcy Filing

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PG&E Bankruptcy: Foundation for Taxpayer and Consumer Rights v. California PUC

Utilities Industry Litigation Reporter

The California Supreme Court has dismissed a consumer group’s claim that the California Public Utilities Commission violated the state open-meeting law by preparing a reorganization plan in closed session and submitting the plan in a bankruptcy proceeding involving Pacific Gas & Electric Co. Foundation for Taxpayer and Consumer Rights v. California Public Utilities Commission et al., No. S105807, petition for review denied (Cal., Aug. 14, 2002).

On Aug. 14, 2002, the California Supreme Court denied a petition for writ of mandate filed by the Foundation for Taxpayer and Consumer Rights. The foundation claimed that the CPUC acted unlawfully in fashioning a plan for reorganization of Pacific Gas & Electric in closed session and submitting the plan to the bankruptcy court without public input.

In its response to the petition, the CPUC said the group provided no credible support for its “extreme view” that an agency cannot decide to take any litigation action in closed session. In addition, the commission observed that, prior to the time that the bankruptcy court gave permission to the CPUC to file a term sheet and terminated PG&E‘s exclusivity period, the commission could not have publicly revealed or discussed a proposed reorganization plan without risking a violation of the exclusivity provisions of 11 U.S.C. @ 1121(c)(3) and the anti-solicitation provisions of 11 U.S.C. @ 1125.

Moreover, the commission noted, proceedings are curren tly underway to investigate the ratemaking implications of the plan.

“This forum is providing an opportunity for public review and comment on the impact of the Plan on PG&E‘s ratepayers,” the commission said.

The CPUC was represented by Gary Cohen, Mary F. McKenzie and Dale Holzschuh of San Francisco.

Consumer Watchdog
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