San Francisco, CA -- The U.S. Bankruptcy Court today approved Pacific Gas and Electric Company's motion to confirm that the funds collected by the utility for Public Purpose Programs — including energy efficiency, low income, research and development and renewable generation programs — are not part of the bankruptcy estate and can be used to honor pre-petition obligations incurred in connection with the Public Purpose Programs. In addition the court also allowed the utility to pay its pre-petition portion of property taxes.

Pacific Gas and Electric Company will be able to immediately pay for costs incurred in connection with the Public Purpose Programs prior to April 6, the day it filed for protection under Chapter 11 of the U.S. Bankruptcy Code. The utility owes approximately $37 million to consumers who have requested rebates and to contractors who have performed work in customers' homes and businesses to make them more energy efficient. Today's ruling ensures that the $260 million now in the energy efficiency accounts will be fully available for payments for these programs.

Pacific Gas and Electric Company operates the most extensive energy efficiency program in the nation, and the continued vitality of these programs will be a critically important part of California's efforts to reduce the severity of rolling blackouts this summer.

Pacific Gas and Electric Company administers energy efficiency programs under the auspices of the California Public Utilities Commission. The utility collects more than $200 million each year from ratepayers, which are used to provide customers with rebates for energy efficient appliances, lighting and equipment; weatherization services for low-income customers; and consulting services for residential and business customers. The programs available include 1-2-3 Cashback, Residential Contractor Program, Express Efficiency and Standard Performance Contract. Pacific Gas and Electric Company's ratepayers also fund research and development and renewable generation programs through the California Energy Commission.

The U.S. Bankruptcy Court also authorized and directed Pacific Gas and Electric Company to pay the pre-petition portion of its property taxes. The company pays property taxes in 49 counties.

As a result of today's ruling, Pacific Gas and Electric Company will be able to immediately pay up to $41.2 million, its portion of property taxes prior to April 6, the day it filed for protection under Chapter 11 of the U.S. Bankruptcy Code. The company's total property tax payment was $78.5 million, and it paid the post-petition portion of $37.3 million on April 10.

Pacific Gas and Electric Company will continue to work with county tax collectors to determine if the company is subject to any late penalties.