PG&E president targets first quarter of 2004 for Pacific Gas to emerge from bankruptcy

By Carlise Newman

Chicago, Dec. 3 - PG&E Corp. president Robert Glynn Jr. said pending the California Public Utility Commission's vote on its Chapter 11 settlement in December, Pacific Gas and Electric Co. is on track to emerge from bankruptcy in the first quarter of 2004.

The five-member CPUC is scheduled to vote Dec. 18 on a nine-year agreement negotiated last spring by PG&E and the staff of the CPUC to settle rival reorganization plans.

"When Pacific Gas and Electric is on the firm financial footing provided by the terms of the proposed settlement agreement and given a more stable regulatory environment, it will be in a position to resume full participation in investments like new utility generation that are vital to the state's and customers' future - investments that are out of reach of sub-investment grade companies. We think the recent good faith efforts of all the key parties show that they recognize the importance of creating the conditions where investments like these can proceed," Glynn said in a webcast of the press conference held Wednesday.

The bankruptcy judge has said publicly that he will make a decision on the settlement by Dec. 18. Glynn said he believed the judge's decision would be made within a week. He added that the remaining steps to get out of bankruptcy include waiting for the CPUC to decide if they will request a re-hearing, which they are entitled to do within a certain number of days after their decision.

"We have to wait for the re-hearing period and after that things will proceed normally in the bankruptcy process. If everything goes as planned, then we can transact the new financing, pay creditors and emerge from bankruptcy by the end of the first quarter of 2004," Glynn said.

Glynn said the benefits that will result when the settlement agreement is approved include reducing rates on Jan. 1, 2004 by $670 million, or 7% on average, with the potential of further rate reductions over time; and allowing Pacific Gas and Electric to have access to lower-cost capital to invest in new infrastructure to serve California.

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