Background
In D.01-01-062, the Commission granted PG&E authority under Pub. Util. Code § 8511 to pledge its accounts receivable and core inventory2 for the sole purpose of procuring core gas supplies. The authority granted by D.01-01-062 terminated the earlier of (i) 90 days after the effective date of the decision, or (ii) 15 days after an upgrade of the credit rating of PG&E's senior unsecured long-term debt to at least BBB- by Standard & Poor's (S&P) or Baa3 by Moody's Investor Services, Inc. (Moody's). In D.01-02-050, the Commission extended until July 31, 2001, PG&E's authority to pledge its accounts receivable and core inventory for the purpose of procuring core gas supplies. The Commission's actions in D.01-01-062 and D.01-02-050 were in response to the precipitous decline in PG&E's financial condition, which culminated in PG&E filing for bankruptcy in April 2001.
On June 1, 2001, PG&E filed a petition to modify D.01-01-062 and D.01-02-050 (Petition). In its Petition, PG&E asks the Commission to extend PG&E's authority to pledge its accounts receivable and core inventory from July 31, 2001, to the effective date of a confirmed reorganization plan in PG&E's bankruptcy case or the closure or dismissal of PG&E's bankruptcy case. PG&E does not seek to change the provision in D.01-01-062 and D.01-02-050 that terminates PG&E's authority to pledge its accounts receivable and core inventory 15 days after an upgrade of PG&E's credit rating.
PG&E states that its requested modification of D.01-01-062 and D.01-02-050 is needed to enable PG&E to procure gas to meet the current and future needs of its core customers. PG&E asserts that as long as it is in bankruptcy, many gas suppliers will not sell gas to PG&E without a security interest in PG&E's accounts receivables and core inventory. PG&E states that the bankruptcy court has (i) confirmed PG&E's use of gas accounts receivables to secure core gas purchases, and (ii) authorized continued use of gas accounts receivable to secure core gas supplies without further order of the court.3
PG&E asks the Commission to act on its Petition at the Commission's meeting on June 28, 2001. PG&E states that delaying action beyond June 28 could adversely affect PG&E's ability to procure gas for its core customers.
Notice of PG&E's Petition appeared in the Commission's Daily Calendar on June 5, 2001. Pursuant to a ruling issued by assigned Administrative Law Judge (ALJ) Kenney on June 4, 2001, responses to PG&E's Petition were due on June 11, 2001. There were no responses to PG&E's petition.
1 All statutory references are to the Public Utilities Code unless otherwise indicated. 2 For purposes of this decision, "core inventory" is defined as gas designated for core customers that is held in storage fields and pipelines. 3 The bankruptcy court's order allowing PG&E to use its gas accounts receivable to secure gas purchases does not supersede § 851, which requires PG&E to obtain authority from the Commission prior to encumbering its gas accounts receivable.
