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ALJ/PVA/avs Mailed 5/10/2004

Decision 04-05-019 May 6, 2004

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Pacific Gas and Electric Company (U 39 M) for Authorization to Sell its Kern Facility Pursuant to Public Utilities Code Section 851 and Executive Order D-44-01.

Application 03-10-044

(Filed October 22, 2003)

ORDER REGARDING PUBLIC UTILITIES CODE SECTION 377

The proposed sale of Pacific Gas & Electric Company's Kern Facility to North American Power Group is barred by Public Utilities Code Section 377 (§ 377). The application is denied.

Background Chronology

May 15, 2000 - Pacific Gas & Electric Company (PG&E) filed an application (Application 00-05-031) to establish a market value for its Kern Facility, a non-operational gas fired power plant located in Bakersfield, California.

December 13, 2000 - PG&E filed a supplemental application, identifying North American Power Group (NAPG) as the winning bidder of an auction process, and requesting Commission approval of the sale of the Kern Facility to NAPG.

January 18, 2001 - Assembly Bill 6 (ABX1 6), amending § 377, became effective, establishing a moratorium on the divestiture of certain utility electric generation facilities.

April 3, 2001 - The Commission issued Decision (D.) 01-04-004, which held that the proposed sale of the Kern Facility to NAPG was barred by the amended § 377, denied PG&E's request to sell the facility, and ordered PG&E to restart the Kern Facility.

July 31, 2001 - Governor Gray Davis signed Executive Order D-44-01, which conditionally suspended § 377 to the extent it would prohibit the transfer of the Kern Facility to NAPG.

October 2, 2001 - The Commission issued D.01-10-002, which denied rehearing of D.01-04-004, closed the previous proceeding, and directed PG&E to file a new application in compliance with the requirements of the Executive Order.

October 22, 2003 - PG&E filed the present application requesting Commission approval of the sale of the Kern Facility to NAPG, asserting that it was in compliance with the requirements of the Executive Order.

November 13, 2003 - Executive Order D-44-01 ceased to be in effect.

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