Gas and Electric Company today issued the following statement in response to California Public Utilities Commission President Loretta Lynch's statement on the company's Rate Stabilization Plan:

 

"President Lynch issued an extraordinary order suspending the lawfully filed Rate Stabilization Plan by Pacific Gas and Electric Company. We believe Commissioner Lynch's actions are unjustified and fail to reflect an appreciation of the current turmoil in the energy and financial markets.

"Pacific Gas and Electric Company filed its Rate Stabilization Plan to fulfill its promise to customers that we would insulate them from the rate shock that affected customers in San Diego.

"Commissioner Lynch's actions would remove our ability to protect customers from inevitable increases due to the underlying demand and supply imbalance in the wholesale electricity market. Delaying these inevitable increases ensures that customer rates ultimately will be higher.

"The date on which the rate freeze ended is determined by law and is the earlier of either March 2002 or when PG&E has recovered all of its stranded generation costs. That occurred no later than the end of August 2000.

"Since this crisis began in June, Pacific Gas and Electric Company has borrowed billions of dollars to pay the energy bills for its customers. Today, wholesale prices are higher than they ever have been, and energy markets are in turmoil. Pacific Gas and Electric Company doesn't have the financial capacity to continue to buy power at outrageous wholesale prices if we are only allowed to charge customers a fraction of the cost of the power they use."