PG&E; Criticizes State’s Reorganization Plan

SAN FRANCISCO — Pacific Gas & Electric Co. on Wednesday attacked a state plan for reorganizing the bankrupt utility, saying that it is fatally flawed and distorts the company’s finances by at least $4.5 billion.

In a filing with federal Bankruptcy Court, PG&E; said the plan outlined by the Public Utilities Commission would fail to restore the company to creditworthy status. Officials warned that the company could not resume power procurement for its customers for years--and that the state would have to continue buying power for them.

Judge Dennis Montali is scheduled to hear arguments Wednesday on whether the commission’s proposal is credible and should be considered as an alternative to PG&E;’s plan.

Both plans say PG&E;’s $13.5 billion in debt would be repaid and the company would be restored to financial health. PG&E;’s blueprint would move its generation and transmission assets beyond the state’s regulatory reach to new subsidiaries of its parent company. The commission’s plan would utilize a projected $6.1 billion in cash and would suspend dividends for three years and require shareholders to pay $1.6 billion more.

PG&E; argued in its filing that the commission plan overstates available cash by more than $2 billion by failing to account for taxes, necessary capital expenditures and interest payments. And the company said the state understates claims against PG&E; by $2.5 billion.

“The plan of the PUC is not credible on its face,” James Lopes, lead attorney for PG&E;, told a news briefing.

Commission President Loretta M. Lynch said she had not yet seen PG&E;’s filing. But she defended the state plan, saying disparities in costs and revenues are understandable because the commission’s numbers are based on PG&E;’s financial reports from Nov. 30.

“We obviously anticipate truing up those numbers,” she said at a regularly scheduled news conference. “What we know is that ... there is headroom or profit that they are building up that needs to be dedicated to ratepayers, not shareholders.”

Lopes said that even if Montali allows the commission’s plan to proceed, “I don’t think it would be a significant setback, because we would continue to go forward with our plan.”

The judge recently decided that PG&E; could not seek a blanket preemption of dozens of state laws as its reorganizes. That prompted the commission to declare the utility’s plan dead, but the company said it intends to modify the plan in ways that the judge suggested could make it acceptable.