April 15, 2002 PUC: 31
Media Contact: PUC Press Office, 415.703.1366, news@cpuc.ca.gov
PUC ISSUES ALTERNATE PLAN OF REORGANIZATION FOR PG&E
The California Public Utilities Commission (PUC) today filed with the United States Bankruptcy Court in San Francisco its proposed plan of reorganization for Pacific Gas and Electric Company (PG&E). Under the PUC's plan, all creditors would receive payment of their claims in full, with interest, and PG&E would be restored to investment grade upon emergence from Chapter 11, enabling it to resume meeting the full power needs of its customers. This plan is the best alternative for California's ratepayers, economy, and environment.
Under the PUC's plan:
· There would be no rate increase;
· PG&E would remain subject to all applicable State laws, thus avoiding complex litigation in the Bankruptcy Court and elsewhere;
· PG&E Corporation, the utility's parent company, would make a significant contribution to PG&E's emergence from bankruptcy;
· The utility would be returned to stable, cost-of-service ratemaking; and
· PG&E's rates should decrease following its Chapter 11 case.
PG&E's shareholders will bear a significant portion of the burden of returning PG&E to financial health. The PUC's plan is funded in part through the sale of $1.75 billion in PG&E stock, thereby diluting PG&E Corporation's ownership interest in the utility. In addition, $1.6 billion of earnings, which would have been received by PG&E Corporation from the utility during 2001, 2002, and January 2003, will remain with PG&E and be used to repay creditor claims.
FINANCIAL INFORMATION
Allowed creditor claims totaling approximately $13.5 billion will be paid in full through a combination of:
· PG&E's projected cash at emergence from Chapter 11: $3.6 billion
· Cash from the sale of new debt: $3.9 billion
· Cash from the sale of common stock: $1.75 billion
· Reinstatement of long term debt: $4.3 billion
The proposed plan and related disclosure statement will be available on the PUC's web site at www.cpuc.ca.gov.
###
