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Pacific Gas And Electric Company Receives Court Approval Of Second-Day Motions

04/09/2001
Utility Granted Authority to Continue Efforts to Secure Natural Gas Supplies, Use Cash Collateral for Normal Business Operations

San Francisco, CA -- Pacific Gas and Electric Company today received approval from the U.S. Bankruptcy Court for the Northern District of California, of various second-day motions.

These orders will enable Pacific Gas and Electric Company to continue to fulfill post-petition obligations to suppliers and other creditors without disruption, and so that all parties' interests are considered, and treated fairly. The goal of these early proceedings is to assure stability of the company, in accordance with bankruptcy law.

The court granted the utility the authority to continue to use its natural gas revenues to secure future supplies, hopefully ensuring that there will be no disruption of service for millions of natural gas customers.

The court also authorized interim use of cash collateral in which mortgage bondholders have a beneficial interest, and scheduled and established deadlines relating to a final hearing on the continued use of cash collateral.

Also today, Pacific Gas and Electric Company asked the Court to allow at least a 60 day suspension of a requirement approved by the CPUC on March 27, that would force PG&E to restate all its regulatory books and accounts back to January 1, 1998 in order to prolong the current electric rate freeze and make it appear that PG&E has never incurred any operating losses on its wholesale power costs since the energy crisis began.

Under the CPUC order, PG&E is required to file tariffs and reports by Wednesday, April 11, making the accounting changes and restating its books. PG&E believes the CPUC accounting and ratemaking change is intended to interfere with the rights of creditors and shareholders to recover over $8.9 billion in undercollected power costs that the company has accrued since last summer. Under federal bankruptcy law, PG&E, as a "debtor in possession," generally has an additional 60 days to comply with various deadlines issued by other agencies, and actions by those agencies that would interfere with creditors rights and the value of PG&E's assets cannot be implemented without approval of the bankruptcy judge.

At the Court's request, Pacific Gas and Electric Company and the CPUC are currently negotiating on an extension of this filing requirement, and is hopeful that an agreed upon solution can be reached in a timely manner.

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