State Seeks SEC Probe of PG&E; Transfers

California Atty. Gen. Bill Lockyer on Thursday asked the Securities and Exchange Commission to investigate PG&E; Corp. for potential abuses of its responsibilities as a utility holding company.

At issue is a series of transactions over the last several years in which PG&E; Corp. transferred funds from its utility, Pacific Gas & Electric Co., which now is operating under Bankruptcy Court protection. The money--more than $4 billion since 1997--flowed to the parent company and to unregulated sister companies of the utilities.

The transfers have been scrutinized by the California Public Utilities Commission and the state Legislature with no finding of wrongdoing, said PG&E; Corp. spokesman Greg S. Pruett.

The SEC currently exempts PG&E; from almost all requirements of the Public Utility Holding Company Act because the San Francisco utility operates primarily within California. That law regulates transactions between holding companies and their utility subsidiaries.

Lockyer wants the SEC to withdraw PG&E;’s exemption, citing $13 billion in PG&E; assets outside of California.

“All the primary evils addressed by PUHCA are relevant to PG&E; Corp.,” Lockyer’s petition to the SEC stated.

In Bankruptcy Court on Thursday, PG&E; said it is close to reaching an agreement with Calpine Corp. to pay more than $267 million it owes the San Jose-based power generator and to preserve contracts for 453 megawatts of relatively cheap electricity.

In all, PG&E; buys about 2,600 megawatts of electricity from nearly 25 alternative generators, which are seeking repayment and release from their contracts through Bankruptcy Court.