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PG&E Seeks Court Approval To Pay Pre-Petition Portion Of Property Taxes

04/26/2001

San Francisco, CA -- Pacific Gas and Electric Company today filed a motion with the U.S. Bankruptcy Court asking the court to authorize payment of the pre-petition portion of its property taxes. The company pays property taxes in 49 counties.

If the court approves the motion, 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 is asking the court for authorization to pay its pre-petition portion of property taxes because counties depend on taxes paid by the utility to fund many services and the company wanted to limit the impact to local governments. In addition, counties are fully secured creditors and payment of their claims will not adversely affect any other creditors in the case.

In order to be fair to other creditors, Pacific Gas and Electric Company is proposing that the property tax payments be made in full, without late penalty payments. Local tax collectors have the authority to cancel the delinquent penalties on property taxes upon a determination that the failure to make a timely payment is due to a reasonable cause and circumstances beyond the taxpayer's control, and occurred notwithstanding the exercise of ordinary care in the absence of willful neglect.

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