Pacific Gas And Electric Company Responds To Claim Filed By California Attorney General


SAN FRANCISCO -- Pacific Gas and Electric Company issued the following statement, in response to state claims filed by Attorney General Bill Lockyer today:

"It is entirely normal and expected for state agencies to file claims in bankruptcy cases. As part of its Plan of Reorganization (POR), the company is committed to fulfill all of its valid claims, including all legitimate tax and other governmental obligations.

"As the Attorney General should know, Pacific Gas and Electric Company proactively asked for specific permission from the bankruptcy court to proceed with its ongoing environmental remediation programs, shortly after filing for Chapter 11 Bankruptcy protection. The court granted our request on June 26, 2001, and since then, the company's remediation actions have proceeded unabated. In fact, this year the company's financial commitment to supporting its robust environmental programs will exceed previous years' commitments.

"The Attorney General should also know that the quote attributed to him in his press release today - that PG&E's Plan of Reorganization seeks to avoid scrutiny of the Securities and Exchange Commission (SEC) - is completely false. In fact, the company's POR expressly spells out the approvals that will be sought from the SEC, in order for the plan to be approved, and includes a projection that such SEC review will take several months to obtain (see pages 40-41, 44, 48 and 49 of the POR, and pages 2, 53, 59 and 108 of the Disclosure Statement for discussions of the necessary SEC approvals and filings). In fact, page 53 of the Disclosure Statement includes the following language addressing SEC approval:

In connection with its review process, the SEC will examine and, as necessary, determine whether (i) the acquisition will unduly concentrate control of utility systems, (ii) the purchase price is reasonable, (iii) the acquisition will unduly complicate the capitalization of the resulting system, (iv) applicable state laws have been complied with or preempted, and (v) the transaction will serve the public interest by facilitating the economic and efficient development of an integrated public utility system.

"As for the Attorney General's original demand for an SEC investigation this past summer, we continue to believe that he is misinterpreting federal law, and the facts continue to clearly support our position."


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