California PUC accuses PG&E of 'regulatory jailbreak'

By the OGJ Online Staff

HOUSTON, Nov. 28, 2001 — The California Public Utilities Commission called Pacific Gas & Electric Co.'s proposed reorganization a "regulatory jailbreak of a scope never before attempted in a bankruptcy case."

Further, the PUC said PG&E is "attempting to portray the PUC and the state as incompetent so that it can curry favor with creditors in support of its deregulation scheme." In a filing with the US Bankruptcy Court, the PUC said the real purpose of the reorganization plan is to escape "state regulatory oversight, and not simply to adjust the utility's relationship with its creditors and restore it to financial health."

That plan would split parent PG&E Corp. and its utility into stand-alone companies, including the transfer of its hydroelectric plants, the Diablo Canyon nuclear power plant and gas and electric transmission grids to unregulated units of the parent company.

The PUC said the plan is dependent upon obtaining no fewer than 15 favorable rulings, each designed to displace portions of the PUC's and the state's "century-old" regulatory authority over PG&E's operations.

In a response, Pacific Gas & Electric said the state attorney general and the PUC did not comply with the court's directive to identify the specific approvals that need to be obtained through an adversary proceeding and did not provide the legal arguments to support their contention.

The PUC said the reorganization plan and its disclosure statement were prepared and filed without any negotiation or discussion with many of the key players involved in the case or in the regulation of PG&E's operations, including the PUC and representatives of the state.

The plan is intended the give the utility $4.5 billion from the asset transfer to help pay off about $13 billion in debts, including $9 billion in unrecovered power costs amassed during the state energy crisis in 2000. The utility filed for bankruptcy protection in April after losing creditworthiness because it ran out of cash in the wake of a flawed deregulation scheme. US bankruptcy Judge Dennis Montali has scheduled a hearing on the plan Dec. 7.

The PUC filing claimed PG&E's reorganization scheme is "deeply flawed" on many levels — both constitutionally and with regard to bankruptcy law. It said there is no basis under bankruptcy law for PG&E's attempted use of Chapter 11 as a legislative device to displace entire regulatory schemes.

According to the petition, the reorganization plan may be an effort by Pacific Gas & Electric to keep all a 3¢ rate increase ordered by the PUC in March 2001. B it said the matter remained unclear, as a portion of the increase is to be allocated to the California Department of Water Resources (DWR).

"If PG&E hopes to keep it all (or any portion that would otherwise belong to DWR), then its electric rates must necessarily increase," the PUC said.

Sponsored by FLSmidth

Related Articles

Eos Energy Storage receives $2.1Mn from California Energy Commission for battery demo

As part of California’s Electric Program Investment Charge (EPIC), through the California Energy Commission (CEC), Eos Energy Storage was awarded $2.1 million for an advanced battery storage system demonstration.

Mojave solar power plant enters operations in California

Abengoa Yield announced that the 280-MW Mojave solar power plant, located in California, entered commercial operation on December 1.

Follow Power Engineering on Twitter

Latest News

NCC Report: DOE must develop stronger policy to foster adequate carbon capture and storage

The National Coal Council (NCC) today released a new study in response to a request by Secret...
2014 Projects of the Year

Power Engineering Photo of the Day

Capstone Turbine corporation shale oil and gas microturbines Horizon Power Systems

Capstone Turbine Receives Follow-On Order for Fifteen C65s from Horizon Power Systems

Capstone Turbine Corp. received an order for 15 C65 microturbines for shale oil and gas custo...
Yucca Mountain Nevada nuclear spent fuel waste repository DOE application NRC review SER evaluation volumes

NRC publishes last two volumes of Yucca Mountain safety evaluation

The NRC published two more volumes of its safety evaluation on a geologic high-level nuclear ...

American wind power rebounds in 2014, but stable policy still needed

The fourth quarter 2014 wind energy industry report released yesterday by the American Wind E...
Taishan nuclear power plant China CGN Areva EPR European Pressurized Reactor EDF delay

Taishan nuclear reactor completion delayed a year

EDF says the first of two nuclear reactors under construction at a Chinese power project will...

Maine Senate confirms Public Utilities Commission nominee

The Maine Senate has confirmed Republican Gov. Paul LePage's pick for the Public Utilities Co...
01/28 Henry Hub Average Natural Gas Spot Prices

01/28 Henry Hub Average Natural Gas Spot Prices

The Henry Hub is the pricing point for natural gas futures contracts traded on the New York M...

Power Engineering Current Issue

03/01/2014
Volume 118, Issue 3
1403PE-cover

Products Showcase

Dynamic Fluoride Ion cleaning DFIC of industrial natural gas turbines Hi-Tech Furnace Systems

Dynamic Fluoride Ion Cleaning of IGT Parts

The Dynamic Fluoride Ion Cleaning (DFIC) Process from Hi-Tech Furnace Systems is able to clean deep, narrow cracks of oxides by cycling between negative, atmospheric, and positive pressure.

Archived Articles

2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013

Power Industry Wire News

Intergraph(R) Releases PV Elite(R) 2015 With New Modeling Capabilities and Other Productivity Enhancements

Intergraph(R) Releases PV Elite(R) 2015 With New Modeling Capabilities and Other Produc...

Utility Execs Explain How to Centralize Crew Management Before and After Storms

Utility Execs Explain How to Centralize Crew Management Before and After Storms

Con Edison 2016 Rate Plan Cites Reliability, Storm Prep, Better Technology

Con Edison 2016 Rate Plan Cites Reliability, Storm Prep, Better Technology

Diesel Particulate Matter (DPM) Testing Evidences 20% Reduction With Use of CyberFuels Dynamo(TM) Cetane Booster

Diesel Particulate Matter (DPM) Testing Evidences 20% Reduction With Use of CyberFuels ...

Miller Energy Declares Cash Dividends on Its Series B, Series C and Series D Preferred Stock

Miller Energy Declares Cash Dividends on Its Series B, Series C and Series D Preferred ...

Power Engineering

Article Archives for Power Engineering Magazine

Continuing Education

Professional Development Hours

To access a course listing associated to a specific topic listed below, click on the topic of choice from the list below.

Latest Energy Jobs

View more Job Listings >>