Court won’t hear PG&E’s rate appeal

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Sacramento Bee

SAN FRANCISCO: Pacific Gas and Electric Co. lost another round in its attempts to impose a multibillion-dollar retroactive rate increase when the California Supreme Court refused Wednesday to step into the case.

The justices voted not to take up the utility’s appeal of a state Public Utilities Commission decision that led to the continuation of a freeze on retail electric rates during a period of unprecedented wholesale price spikes.

PG&E contends the price cap, which expired in March, should have been lifted almost two years earlier, permitting it to collect up to $4 billion more from its customers. It blames the PUC action for driving it into bankruptcy protection.

In response, the PUC told the court the utility had supported the rate freeze and earned billions in extra cash under it before the wholesale prices spiraled out of control.

Following custom, the justices did not explain their decision to let the case die. No dissents were recorded.

Spokesman John Nelson says PG&E is disappointed with the decision.

The same issue lives on, however, in federal court, where PG&E is appealing a bankruptcy court judge’s refusal in June 2001 to interfere with the PUC‘s rate-setting powers.

In a separate vote bearing on the PG&E bankruptcy-protection case, the justices also refused to hear a suit filed against the PUC by a consumer organization. None of the justices voted to hear the case.

The Los Angeles-based Foundation for Taxpayer and Consumer Rights had challenged the PUC‘s authority to propose a bankruptcy reorganization plan for PG&E.

The suit contended that if the PUC‘s plan for extracting PG&E from its debt is approved by creditors and a bankruptcy court judge, it will amount to an illegal bailout for the utility, forcing consumers to pay an additional $10 billion.

Harvey Rosenfield, who heads the foundation, said he’ll file the suit now in the state Court of Appeal.

“Somebody has got to make the Public Utilities Commission obey the law,” he said.

The PUC and the utility have proposed competing plans for reorganizing PG&E‘s debt. The plans recently were submitted to creditors. If they survive the creditors’ vote, they will go to U.S. Bankruptcy Judge Dennis Montali in San Francisco for confirmation hearings that are scheduled to start in November.


The Bee’s Claire Cooper can be reached at (415) 551-7701 or

[email protected]

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