EDITORS: Please do not use
"Pacific Gas and Electric" or "PG&E" when
referring to PG&E Corporation or its National Energy Group.
The PG&E National Energy Group is not the same company as Pacific
Gas and Electric Company, the utility, and is not regulated by the
California Public Utilities Commission. Customers of Pacific Gas
and Electric Company do not have to buy products or services from
the National Energy Group in order to continue to receive quality
regulated services from Pacific Gas and Electric Company.
AND PACIFIC GAS AND ELECTRIC COMPANY FILE AMENDED PLAN OF REORGANIZATION
AND DISCLOSURE STATEMENT
SAN FRANCISCO - PG&E Corporation
(NYSE: PCG) and Pacific Gas and Electric Company today will file
an amended plan of reorganization and disclosure statement in U.S.
Bankruptcy Court, according to the schedule established by the Court.
The hallmarks of the plan remain paying all valid claims in full
without asking the state for a bailout or the Court to raise rates.
The amended plan contains
no substantive changes. The revisions to the disclosure statement
represent efforts to resolve the objections filed by clarifying
specific issues and providing additional information requested by
The revised disclosure statement
also clarifies preemption issues that arise from the plan. In the
filing, the utility and PG&E Corporation reaffirm that after adoption
of the plan, all of its businesses will continue to be subject to
all applicable federal, state and local public health, safety and
environmental laws and regulations. Approximately 70 percent of
the current utility assets, including the rates retail customers
pay for electricity and natural gas, will continue to remain under
California Public Utilities Commission (CPUC) regulation.
The Federal Energy Regulatory
Commission (FERC) will retain jurisdiction over the licenses of
the hydroelectric assets and the rates, terms and conditions of
service provided by the electric transmission company. The Nuclear
Regulatory Commission will continue to regulate the operation of
Diablo Canyon Power Plant.
FERC will assume jurisdiction
to regulate wholesale rates for the power from the generation assets,
which under state law prior to this year were scheduled to move
to FERC regulation in 2002, and over the wholesale rates, terms
and conditions of service for the gas transmission system, which
in most other states are already FERC-regulated.
The utility and new business
units plan to follow the normal state and local processes to obtain
transfers of licenses and permits under the plan and do not anticipate
the need to preempt local and state ordinances relating to these
approvals. The amended disclosure statement lists some 37 CPUC laws
and regulations that the company believes would be preempted, out
of the thousands of laws and regulations under which the utility
operates, in order to complete the transfer of certain assets and
establish three new California-based companies under the plan. Unless
preempted, these specific CPUC laws and regulations could restrict
the transfer of property and issuance of new securities required
to implement the plan.
There are only three ways
for Pacific Gas and Electric Company to emerge from bankruptcy -
rate increase or bailout, sale of assets to third parties or reorganization
and refinancing - and each of these options would require a preemption
of state law. By choosing to reorganize and refinance, PG&E chose
the path that would present the fewest conflicts with state laws
"Our plan ensures that all
of the existing Pacific Gas and Electric Company operations remain
available to meet California's energy needs, that they will continue
to be operated by our experienced, hard-working team of employees,
and that our customers will continue to receive the same safe, reliable
and responsive service," said Gordon R. Smith, president and chief
executive officer of Pacific Gas and Electric Company. "We have
developed a plan that uses the value of our assets to pay our creditors
and do not ask the state for a bailout or the Bankruptcy Court to
raise retail rates."
PG&E will seek new franchise
agreements as needed for the electric and gas transmission businesses.
As a result, it anticipates that California local governments will
continue to receive at least the same level of franchise fees they
have received historically.
In a separate filing with
the Bankruptcy Court, Pacific Gas and Electric Company will ask
for an extension of the exclusivity period for its plan of reorganization.
The extension, until June 30, 2002, will allow the utility to continue
its efforts to complete the confirmation process by the end of the
second quarter of 2002.