Consumer Group Seeks to Block Bonds

Consumer activists said they plan to petition the state Supreme Court to block the issuance of California utilities’ rate-reduction bonds that are about to go on sale. The action comes just as PG&E; Corp.’s Pacific Gas & Electric Co. subsidiary prepares to sell $3 billion of the bonds, which are backed by a charge that will be added to consumers’ electricity bills. The company is expected to announce more details of the sale next week. The Utility Reform Network (TURN) said that Monday it plans to file a petition with the court and with the state attorney general’s office to seek a referendum on whether bonds should be issued. PG&E; said it doesn’t expect the consumer group’s actions to delay issuance of the bonds by the end of the year. TURN calls the 10-year bonds “long-term debt with short-term benefits” because they are designed to allow existing utilities to provide a 10% rate reduction, but only for four years after deregulation takes effect. The group also wants rates to fall more than the 10% required by law. PG&E; said the opposition was expected and that it will determine next week whether to take any legal action.