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Armando Rendón |
June 1, 2001 |
CPUC: 058 | |
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415-703-1366 |
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CPUC PRESIDENT COMMENTS ON PG&E BANKRUPTCY DECISION
California Public Utilities Commission (CPUC) President Loretta Lynch today announced that Judge Dennis Montali had dismissed the Complaint filed by Pacific Gas & Electric Corporation (PG&E) against the Commission in Federal Bankruptcy Court, and had denied PG&E's Motion for Preliminary Injunction. PG&E had sought to enjoin portions of the CPUC's March 27, 2001 Order requiring PG&E to change its accounting treatment of revenues received during the statutory rate freeze.
"The Commission is pleased, but not surprised, that Judge Montali has ruled that PG&E cannot evade proper state regulation by choosing to file for bankruptcy and seeking protection from the Bankruptcy Court," said President Lynch.
In his 30-page decision, Judge Montali held that PG&E is "not entitled to any relief under the First Amended Complaint" because the Commission's actions came within the "police and regulatory" exception to the bankruptcy automatic stay. "The public interest is better served by deference to the regulatory scheme and leaving the entire regulatory function to the regulator, rather than selectively enjoining the specific aspects of one regulatory decision that PG&E disputes," the Judge wrote. If PG&E's position were accepted, "[t]he bottom line is that PG&E would simply use the automatic stay to substitute its own rate (based on the assumption that CPUC is wrong on some issues) for the existing rate. The automatic stay is not intended for that purpose."
Rejecting PG&E's claim that the March 27 Order should be enjoined because it will cost PG&E money, Judge Montali wrote:
"The fact that the result may be a negative economic impact on PG&E, and a positive impact on PG&E's customers, does not change the fact that CPUC's ratemaking implements public policy. ...The [March 27 Order] is no less an implementation of "public policy" because CPUC chose one ratemaking calculus over another. To the contrary, that choice is the essence of CPUC's ratemaking authority over PG&E as a public utility, and regulation of utilities `is one of the most important of the functions traditionally associated with the police power of the States.' ...The fact that implementing that decision is expected to be expensive for PG&E does not take away from the important public policy decisions involved."
President Lynch described Judge Montali's decision as a "ringing affirmation of our position that the CPUC will continue to require PG&E to serve its customers, and will continue to work on all fronts to protect California's consumers and businesses, notwithstanding PG&E's bankruptcy filing."
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