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Attorney General Lockyer Files First Round of State Claims in PG&E Bankruptcy

Monday, September 24, 2001
Contact: (415) 703-5837

(SAN FRANCISCO) – Attorney General Bill Lockyer announced today the filing of the state's first claims against Pacific Gas & Electric Company in federal bankruptcy court seeking $179.42 million for energy purchases made by the Department of Water Resources on behalf of the utility's customers.

Lockyer said other state agency claims against PG&E for such things as pollution clean up costs and unpaid taxes would be filed by the October 3, 2001 deadline. Those claims are projected at more than $230 million.

"In seeking to recover money owed by PG&E, the State of California is limiting its waiver of sovereign immunity as to these claims only and will fight efforts by the utility to use the federal bankruptcy court to raid the pockets of taxpayers," Lockyer said. "We also are looking closely at the PG&E reorganization plan because of serious concerns that the utility is seeking to evade further scrutiny by the California Public Utilities Commission and is seeking to avoid state laws that apply to their transfer of assets."

The first round of state claims filed with the federal bankruptcy court in San Francisco cover the cost of energy purchases made by the Department of Water Resources for PG&E customers from the time PG&E filed bankruptcy on April 6, 2001 to May 31, 2001 that PG&E had not already paid to DWR. The claim will be amended to reflect the exact amount owed by PG&E once final information is obtained from the California Independent System Operator.

The Attorney General expressed concerns that PG&E's bankruptcy reorganization plan seeks to shift from state to federal regulatory oversight of its activities. PG&E earlier had used California PUC oversight as a shield against federal scrutiny. Lockyer already has challenged PG&E's claim that it should be exempted from federal Securities and Exchange Commission review for the transfer of billions of dollars by its parent corporation, PG&E Corp., for potential holding company abuses in the transfer of billions of dollars from its now bankrupt California subsidiary. The petition challenged PG&E's claim that it should be exempted from SEC's federal regulatory oversight under the Public Utility Holding Company Act because the utility was a California-only operation subject to California PUC review.

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