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.
UPDATE: PG&E OUTLINES CONFIRMATION OBJECTIONS TO THE CPUC'S ALTERNATIVE
PLAN OF REORGANIZATION
SAN FRANCISCO - As requested
by the U.S. Bankruptcy Court, PG&E Corporation (NYSE: PCG) and Pacific
Gas and Electric Company today submitted a summary of their principal
objections to confirmation of the California Public Utilities Commission's
(CPUC) alternative plan of reorganization.
The filing identifies elements
of the plan that PG&E believes are not lawful or financially feasible.
A proposed stock sale
that would violate various sections of bankruptcy law requiring
a plan of reorganization to be "fair and equitable" in its treatment
of equity holders. The CPUC plan's proposed stock sale would
significantly dilute shareholder equity and illegally confiscate
considerable value from shareholders, many of whom are current
and retired PG&E employees and others whose pension portfolios
include holdings in PG&E Corporation.
A $3.8 billion new debt
offering and the failure to restore the utility's investment-grade
credit rating. The debt issued under the CPUC's plan likely
would be non-investment grade bonds - junk bonds. The recent
debt financing under the settlement agreement with Southern
California Edison failed to receive investment-grade ratings.
PG&E believes it is doubtful that the bond markets would be
capable of supporting a junk bond offering that would be more
than twice as large as Southern California Edison's financing
and would be the largest such bond sale in the last five years.
PG&E believes it has developed
the only feasible solution that allows the utility to emerge from
Chapter 11 as an investment-grade company, gives the State of California
a clearly defined path to exit the power buying business and provides
for continued environmental protections. The company's plan of reorganization
achieves these objectives without asking the Bankruptcy Court to
raise rates or the State for a bailout.