Lawsuit by PG&E; Stayed by Court

PG&E; Corp.’s lawsuit against state regulators to recover $9.2 billion spent buying power during the California energy crisis was put on hold by a federal appeals court.

The 9th U.S. Circuit Court of Appeals in San Francisco stayed PG&E;’s lawsuit, which had been scheduled for trial next year, until it can rule on the California Public Utilities Commission’s claims that the suit is unconstitutional.

California’s largest utility sued to force state regulators to raise rates so the company could recover money it spent buying power in 2000 and 2001 at prices higher than the rates it could charge under the state’s deregulation law. A federal judge earlier this year denied a request by the PUC to dismiss the suit, leading to the agency’s appeal.

“The 9th Circuit will consider the serious constitutional and federal law defenses to this lawsuit before it moves into expensive discovery and toward trial,” said Gary Cohen, the PUC’s general counsel, in a statement.