GARY M. COHEN, SBN 117215
AROCLES AGUILAR, SBN 94753
MICHAEL M. EDSON, SBN 177858
CALIFORNIA PUBLIC UTILITIES COMMISSION
505 Van Ness Avenue
San Francisco, California 94102
Telephone: (415) 703-2015
Facsimile: (415) 703-2262

ALAN W. KORNBERG
BRIAN S. HERMANN

MARC SKAPOF
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
1285 Avenue of the Americas
New York, New York 10019-6064
Telephone: (212) 373-3000
Facsimile: (212) 757-3990

Attorneys for Objector California Public Utilities Commission

UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION


In re PACIFIC GAS AND ELECTRIC COMPANY, a California corporation,		Case No. 01-30923 DM Chapter 11 Case CALIFORNIA PUBLIC UTILITIES COMMISSION'S OBJECTION TO SECOND AMENDED DISCLOSURE STATEMENT FOR SECOND AMENDED PLAN OF REORGANIZATION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE FOR PACIFIC GAS AND ELECTRIC COMPANY Date: March 26, 2002 Time: 9:30 a.m. Place: 235 Pine Street, 22^nd Floor, San Francisco, California
	Debtor.

Federal I.D. No. 94-0742640

The California Public Utilities Commission (the "Commission" or "CPUC"), a creditor and party in interest in this chapter 11 case, by and through its undersigned counsel, submits this objection (the "Objection") to the proposed Second Amended Disclosure Statement for Second Amended Plan of Reorganization under Chapter 11 of the Bankruptcy Code for Pacific Gas and Electric Company ("PG&E") proposed by Pacific Gas and Electric Company and PG&E Corporation (the "Parent" or, collectively with PG&E, the "Proponents") dated March 7, 2002 (the "Second Amended Disclosure Statement" or "D.S."). In support of its Objection, the Commission respectfully represents as follows:¹

BACKGROUND

On February 7, 2002 the Bankruptcy Court issued its Memorandum Decision Regarding Preemption and Sovereign Immunity (the "February 7 Decision" or "Mem. Dec.") in respect of the Proponents' First Amended Plan of Reorganization. There, the Court held that PG&E could not utilize a provision of the Bankruptcy Code governing the contents of a plan, Section 1123(a)(5), to expressly preempt numerous state laws and Commission decisions, rulings, orders, and directives that prevent PG&E from disaggregating itself unilaterally. In addition to rejecting PG&E's express preemption arguments, the Court also rejected PG&E's contention that it could seek equitable and injunctive relief against the Commission without violating the Eleventh Amendment to the United States Constitution and related principles of sovereign immunity.

In accordance with the February 7 Decision, the Bankruptcy Court directed PG&E to file and serve a statement of it and the Parent's intentions as to the future of their Plan and Disclosure Statement process in this case. On February 21, 2002, PG&E filed its statement of intent (the "Statement of Intent") and indicated that it would modify its plan and disclosure statement to conform with the February 7 Decision.

At a hearing held on February 27, 2002, the Bankruptcy Court directed the Proponents to file their revised plan and disclosure statement on or before March 7, 2002, and set an objection deadline of March 19, 2002. On March 7, 2002 PG&E filed its Second Amended Plan and Disclosure Statement. The Commission now submits this Objection to the Second Amended Disclosure Statement.

¹ By filing this Objection, the Commission does not waive any objections or defenses that it or any other agency, unit, or entity of the State of California may have to this Court's jurisdiction over the Commission or such other agency, unit or entity based upon the Eleventh Amendment or related principles of sovereign immunity or otherwise, all of which are hereby reserved.