Hearing set for PG&E bankruptcy plan

SAN FRANCISCO -- The California Public Utilities Commission said on Monday it scheduled a prehearing conference on the proposed Pacific Gas & Electric Co. bankruptcy settlement.

CPUC Judge Robert Barnett said that by July 1 the PG&E Corp.-owned utility must give the commission a proposed schedule for steps needed to put the settlement plan into effect.

A federal bankruptcy judge announced on Thursday that Pacific Gas & Electric and the CPUC had reached a settlement to merge their rival plans to restructure the bankrupt utility.

PG&E and the CPUC were sharply divided on whether the company should remain intact or broken up.

The proposed agreement would keep the utility intact under state regulations, repay creditors about $12 billion in cash, and bring the utility out of bankruptcy early in 2004.

In addition to approval by the five-member CPUC, the deal needs approval by U.S. Bankruptcy Judge Dennis Montali, who has scheduled a July 30 hearing on details of the agreement.

It also must be cleared by the utility's creditors and PG&E's board of directors.

At least two CPUC commissioners have said the plan keeps retail power prices too high, relying too heavily on consumers to pay off PG&E's debts.

Pacific Gas & Electric sought bankruptcy protection in April 2001 after running out of cash buying electricity for its customers during California's disastrous fling with deregulation.