Gov Signs PG&E Bankruptcy Financing Bill

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

Capitol Update, June 11, 2004 Share this on FacebookTweet thisEmail this to a friend

Governor Arnold Schwarzenegger has signed legislation authorizing Pacific Gas & Electric (PG&E) to refinance its bankruptcy plan

PG&E’s bankruptcy plan, approved last December by the California Public Utilities Commission, requires customers to contribute toward the payment of PG&E’s back debt through creation of a capitalized "regulatory asset." SB 772 (Debra Bowen, D-Marina del Rey), which CMTA supports, provides statutory authority to refinance the regulatory asset through the use of a dedicated rate component, which reduces the overall cost of the plan.

Three months ago, customers of PG&E began seeing lower rates on their electric bills due to the plan approved last December. The average bundled rate went from 13.9 cents per kilowatt-hour (kWh) to 12.7 cents per kWH, an 8 percent decrease. Business customers' rates went down between 9 and 14 percent. PG&E’s transmission-level industrial customers' (E-20 T) rates were reduced by 14.8 percent.

The signing into law of SB 772 means customers will receive a modest additional rate decrease (less than a tenth of one cent per kWh) by the second or third quarter of 2005.

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