PG&E BK Financing Bill Set for Hearing

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, Jan. 23, 2004 Share this on FacebookTweet thisEmail this to a friend

Last month, the California Public Utilities Commission (CPUC) approved a plan to enable Pacific Gas & Electric to emerge from bankruptcy. Legislation implementing the finance mechanism of the plan, SB 72 (Debra Bowen, D-Marina del Rey), will be heard in the Assembly Utilities and Commerce Committee on February 2.

PG&Es bankruptcy plan requires customers to contribute toward the payment of PG&Es back debt through creation of a capitalized regulatory asset. Pending legislative approval, the regulatory asset will be re-financed through the use of a Dedicated Rate Component (DRC), which reduces the overall cost of the plan.

SB 772 statutorily authorizes the issuance of financing orders to support the issuance of energy recovery bonds by the California Infrastructure and Economic Development Bank, secured by a DRC, to pay off creditor claims and other expenses relating to PG&Es bankruptcy proceeding.

The measure is expected to move through the legislative process relatively quickly and land on the governor's desk by spring.

Meanwhile, PG&Es bundled customers will receive a significant electric rate reduction beginning in March when, as is expected, the CPUC approves a rate design settlement agreement supported by CMTA and others that will reduce PG&Es averaged bundled electric rates by 8.2 percent and rates for transmission-level industrial customers (E-20 T) by 15.2 percent.
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