California Seeks Millions From Troubled PG&E;

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The state of California filed a $179.4-million claim Monday seeking repayment for power purchased for Pacific Gas & Electric Co. customers in the first two months after PG&E; filed for bankruptcy.

California Atty. Gen. Bill Lockyer said the claim covers purchases made by the state Department of Water Resources between April 6--the date of PG&E;’s bankruptcy filing--and May 31.

The state will file an additional claim of more than $230 million for unpaid taxes, pollution cleanup costs and other items before an Oct. 3 deadline, he said.


Lockyer earlier had refrained from filing any claims in the PG&E; bankruptcy case for fear that doing so would cause the state to lose its sovereign immunity against being sued in federal court.

The U.S. Constitution bars a state from being sued in federal court without the state’s permission. If the state filed a claim, that could be interpreted as agreeing to the jurisdiction of the federal court and could open the way to counterclaims filed by PG&E; or its creditors, state lawyers feared.

Ultimately, however, state officials decided not to forgo hundreds of millions of dollars in claims, especially not after PG&E; declared in its reorganization plan that it had enough money to settle all claims.

“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 Bankruptcy Court to raid the pockets of its taxpayers,” Lockyer said in a statement.

PG&E; spokesman Ron Low said the company had not yet seen the claim but noted that the utility has been paying the state Department of Water Resources daily for power purchases. The administrative claim for power purchases, he said, may reflect a difference between the amount of power scheduled and the amount actually purchased for PG&E; customers.

The state has been buying power on behalf of PG&E;, Southern California Edison and San Diego Gas & Electric Co. since January, when generators, alarmed that the utilities had amassed billions in debts, refused to sell more electricity to them.


In April, PG&E; filed for Chapter 11 protection from creditors in federal Bankruptcy Court, saying it had more than $9 billion in debts related to the energy crisis. There were fears among state officials that the company would seek a rate increase in federal court. But last week, the company unveiled a reorganization plan that it says would allow it to repay creditors without a rate increase.

The plan would split PG&E; from its holding company, PG&E; Corp., and transfer assets to the parent, which is not regulated by the state Public Utilities Commission.

The plan must be approved by the federal bankruptcy judge, and any transfer of assets to the parent company may need approval by state officials.

Lockyer said his office is examining the plan “because of serious concerns that the utility is seeking to evade further scrutiny” from state regulators.