February 27, 2002 PUC: 20
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COURT RULES PUC MAY FILE BANKRUPTCY PLAN FOR PG&E
In a victory for the California Public Utilities Commission (PUC), U.S. Bankruptcy Judge Dennis Montali ruled today that the Commission may file its alternative plan of reorganization in Pacific Gas & Electric Company's (PG&E) bankruptcy case. Judge Montali terminated PG&E's exclusive right to propose a plan and solicit creditor support, and gave the Commission until April 15, 2002 to file its plan and a draft disclosure statement.
"This is an enormous victory for ratepayers and for the state," said Commission General Counsel Gary Cohen. "For the first time in the eleven months since PG&E filed for bankruptcy protection, we are now on a level playing field. Today's ruling allows the PUC to present a plan that will enable the company to pay its creditors, become creditworthy, and resume buying power for its customers -- without having the utility escape from regulatory supervision. We will file our plan on April 15th and expect that it will be supported by creditors and confirmed by the Court."
Earlier this month, Judge Montali agreed with the Commission and ruled that PG&E's proposed plan was not confirmable as a matter of law. PG&E is expected to file a new plan on March 6, 2002. "We expect to see more of the same deregulation scheme in PG&E's new plan," said Cohen. "We do not believe that PG&E can overcome the major legal hurdles that Judge Montali's February 7th ruling presents for its plan."