Electric Utility Week (formerly Electrical Week)
Pacific Gas & Electric charges that the Public Utilities Commission‘s bankruptcy reorganization plan for PG&E contains many uncertainties, most prominently whether the agency will have the ability to change the plan after approval by a U.S. Bankruptcy Court.
The commission, however, denies it will alter the plan and argues that it should not be deterred from reaching PG&E creditors for a vote.
In its May 3 objections to the PUC plan filed to the court, PG&E wanted the commission plan’s ”risk” included in its disclosure statement, a type of proxy statement used by creditors to vote.
To prevent ”misleading” details, the PUC should include details of its order seeking public stakeholder comment and a lawsuit filed by the Foundation for Taxpayer and Consumer Rights seeking to prevent the PUC from forming settlements, such as its PG&E plan, without public hearings.
PG&E argued to the court that the outcome of these proceedings could force the PUC to change or withdraw its plan at any time. Another risk of the PUC plan is that it does not require investment-grade rating for the utility, PG&E said. ”The CPUC’s alternative plan states the requirement that the utility’s investment grade credit rating be restored can be waived at any time,” it said.
”Receiving an investment grade credit rating is an essential requirement in PG&E‘s plan of reorganization, which may not be waived. Without an investment grade credit rating, the likelihood of success for the CPUC’s plan is highly uncertain, which would likely force the state of California to remain in the power buying business for several more years.”
At a Thursday hearing on the objections, Judge Dennis Montali heard from the commission’s lawyers that they would not back away from the plan. ”The creditors want to know we are bound to the plan and we have added language to that effect….The PUC will be bound by the plan,” said Alan Kornberg, PUC attorney.
Jim Lopes, PG&E attorney, however, said that the utility was still not convinced and wantns further talks over whether the PUC will exercise state sovereign immunity and thus, open the door for the possibility that a federal court approval of its plan would not be binding.
At the hearing, Montali set a Wednesday court date to further discuss objections to the PUC plan. He urged the PUC to resolve objections before the hearing and to file a revised statement on Tuesday.
At the next hearing, he expected to discuss the need for more hearings on remaining objections as well as a schedule for final approval of the disclosure statement.
Montali also said at the hearing he will review the creditor voting schedule submitted last week by PG&E and the PUC, which outlines voting to begin June 17 and end August 9.
