November 22, 2002 PUC: 108
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PUC GRANTED STAY BY NINTH CIRCUIT IN PG&E'S ATTEMPT TO INCREASE ELECTRIC RATES
The California Public Utilities Commission (PUC) today announced that it obtained a stay from the U.S. Court of Appeals for the Ninth Circuit in the federal "Filed Rate Doctrine" lawsuit brought by Pacific Gas and Electric Company (PG&E).
In PG&E's federal lawsuit, it seeks to require the PUC to increase PG&E's customers' rates by more than $9 billion due to PG&E's theory that federal law requires the PUC to pass through to customers PG&E's alleged unrecovered exorbitant electric procurement costs incurred during the energy crisis. The PUC denies PG&E's allegations and had moved to dismiss PG&E's lawsuit because the PUC, as a state agency, is immune from suit for claims of this type under the U.S. Constitution, and because federal law does not permit these claims to be brought in federal court against state public utility commissions.
The U.S. District Court denied the PUC's motion to dismiss, and the PUC then appealed to the Ninth Circuit Court of Appeals. Yesterday, the Ninth Circuit Court of Appeals granted the PUC's motion, and stayed the district court proceedings until the Ninth Circuit can rule on the merits of the PUC's appeal. If the PUC ultimately prevails on this appeal, PG&E's lawsuit would be dismissed.
"This is an extremely favorable development in our effort to defeat PG&E's claim that California ratepayers should have to pay it billions of dollars. It means that the Ninth Circuit will consider the serious constitutional and federal law defenses to this lawsuit before it moves into expensive discovery and toward trial," said Gary Cohen, the PUC's General Counsel.
PG&E's filed rate doctrine would be dismissed under the PUC's Plan of Reorganization filed in PG&E's bankruptcy case, which is currently under consideration by U.S. Bankruptcy Judge Dennis Montali.