Discussion

We are persuaded by PG&E that it needs an extension of time beyond July 31, 2001, to pledge its gas accounts receivable and core inventory for the purpose of procuring core gas supplies. We are not persuaded, however, that PG&E should be granted an extension until its bankruptcy case is resolved. Given the precarious nature of PG&E's finances and the California energy crisis, we believe that it is in the public interest to periodically reconsider PG&E's need for authority to pledge its accounts receivable and core inventory.

For the preceding reasons, we shall modify D.01-01-062 and D.01-02-050 to extend PG&E's authority to pledge its accounts receivable and core inventory for the sole purpose of procuring core gas supplies until the earlier of (i) April 1, 2002, (ii) the effective date of a confirmed reorganization plan in PG&E's bankruptcy case, (iii) the closure or dismissal of PG&E's bankruptcy case, or (iv) 15 days after an upgrade of the credit rating of PG&E's senior unsecured long-term debt to BBB- by S&P or Baa3 by Moody's. In all other respects, D.01-01-062 and D.01-02-050 shall remain in full force and effect.