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Enron Mail |
fyi
-----Original Message----- From: Cooper, Shawn (Corp) Sent: Tuesday, September 25, 2001 3:51 AM To: Cortez, Sonia (Corp); Hertzog, Brian; Jacobs, Erica; Parnell, Renee (Corp); Pruett, Greg (Corp); Seaman, Merrilee (Corp); Cheng, Linda (Corp); Darbee, Peter (Corp); Everett, Leslie (Corp); Gee, David (Corp); Glynn, Robert D. Jr (Corp); Johns, Christopher (Corp); Kline, Steven (Corp); Stanley, Brent (Corp); Wan, Fong (Corp); Worthington, Bruce (Corp); david.rogers@lw.com; jeff.rothschild@lw.com; joel.mack@lw.com; robert.kennedy@lw.com; samuel.fishman@lw.com; Buchsbaum, Craig M (Corp); Chang, Frances (Corp); Encinas, Gary P (Corp); Ford, John E (Law) (Corp); Gavin, Julie (Corp); Hayes, Kathleen (Corp); Jones, Richard C (Corp); Ludemann, Doreen (Corp); Monti, Robert (Corp); Sallaberry, Susan (Corp); Shelley, E Brian (Corp); Tomcala, Karen (Corp); Anderson, David W (Law); Faraglia, Annette (Law); Gardiner, Stuart (Law); Huffman, Mark (Law); Kurz, Edward (Law); Lindh, Frank (Law); Manheim, William (Law); Patrizio, Mark (Law); Post, Jennifer (Law); Reid, Alice (Law); Sampson, Keith (Law); Witalis, Lawrence (Law); Hartman, Sanford; Herman, Stephen; Bar-Lev, Joshua (Law); Busterud, John (Law); Fallin, Jack Jr (Law); Locke, Richard (Law); Ouborg, Peter (Law); Peters, Roger (Law); Richard, Daniel; Vincent, Louis (Law); Warner, Christopher (Law); Alexander, Beverly; Bhattacharya, Shan; Bottorff, Thomas; Butler, Jeffrey; Campbell, Walter; Chiu, Grace; Fong, Katheryn; Greif, Claudia; Guerrero, Lindy; Hapner, Dede; Harvey, Kent; Jackson, Russell; Katz, Michael; Kuga, Roy; Martinez, Susie; Mistry, Dinyar; Oatley, David; Patterson, Richard; Randolph, James K; Regan, Frank; Rodriguez Jr, Guillermo; Rueger, Gregory; Walsh, Kimberly; Womack, Lawrence; Andre, Erin; Barpoulis, Sarah; Boren, Thomas G. (Corp); Cooper, John; Feyder, Joe; Hauser, Ernie; Iribe, Chris; Keegan, Mike; King, Tom; LaFlash, Hal (Corp); Maddox, Lyn (NEG); Magill, David; peter.lund@neg.pge.com; Quinn, Bill Cc: bskladany@AKINGUMP.com; hterhune@AKINGUMP.com; jjankowsky@AKINGUMP.com; johnsonc@AKINGUMP.com; jtucker@AKINGUMP.com; mmanganelli@AKINGUMP.com; Black, Patricia (Corp); Carter, Rick; Hill, Thomas; Janis, Megan Smith (Corp); Lavinson, Melissa; Palazzi, Marsha; Pidcock, Paulette C (Corp); Low, Ronald; Nelson, John (News); Newman, John; Tremayne, Jon; Cherry, Brian; Guliasi, Les; Stock, William; Chung, Chris; Lim, John; Sanchez-Ng, Gyn; Varjassy, Shannon; Wu, Kathleen; Albrecht, Lorraine; Bedwell, Ed; Dennis, Melinda; Hunter, Dale; Kauss, Kent; Kazama, Joyce; Timmerman, Mark; greg.mccormick@neg.pge.com; McWethy, Amy; Mould, David; natalie.wymer@neg.pge.com; Seymour, Bonny; Christie, Kevin; Howard, Bob; McDonough, Sandra; Robertson, Dave; Anderson, Don (Gas Distribution); Davis, Doug; Document Retention-CPUC; Eastman, Alan; Gross, Robert; Hendra, Vincent; Homrig, Staci; Johnson, Kirk Subject: Nat Gas Week - PG&E files POR The story of the company's announced POR from this week's Natural Gas Week. Article credits PG&E with a plan that pays all valid creditors and questions if SCE and Davis can actually push through a political bailout for SCE by way of another special session as requested by Gov Davis. Shawn Cooper ____________________________________________________________________________ _________________ Natural Gas Week PG&E Files Reorganization Plan - Edison Further Toward the Brink September 24, 2001 Page 6 California utility Pacific Gas & Electric (PG&E) announced their reorganization plan last week to the applause of its creditors. Such applause may prove to be an annoying buzz to Gov. Gray Davis, who was unable to coerce a bailout plan for Southern California Edison (SCE) from the state legislature. Pacific Gas & Electric's announcement is likely to undermine his efforts to do so. Under the plan, the PG&E utility will be separated from PG&E Corp., the parent corporation, into a stand-alone company that will not be affiliated with the parent. The utility will still run its retail electric and natural gas operations but the parent company will take control of electric generation, electric transmission, and natural gas transmission operations. Those three sectors will be operated by PG&E as three distinct businesses. The electric transmission business will own and operate some 18,500 miles of transmission assets. The gas transmission business will operate the former utility gas operations, including 6,300 miles of transmission pipelines and three gas storage facilities. The generation company will control 7,100 MW, including the Diablo Canyon nuclear power plant. Once the utility assets are reorganized, PG&E said that it will be able to issue debt that it will use to combine with new financing at Pacific Gas & Electric to pay its creditor claims of some $13 billion. The plan will also restructure some existing debt and use about $3.3 billion in on-hand cash to meet its obligations. PG&E said that all of its creditor claims will be met under the plan through a combination of $9.1 billion cash and $4.1 billion long-term debt notes. Creditors with claims of $100,000 or less will receive cash payments for the full amount of their claims on the effective date of the plan along with most secured creditors. Unsecured creditors with allowed claims in excess of the $100,000 threshold will be paid 60% cash and 40% in notes. The division of the utility will still result in PG&E being regulated by the California Public Utilities Commission (CPUC), but the new businesses - under parent PG&E - will be under the oversight of the Federal Energy Regulatory Commission (FERC). The move is likely a conscious decision to get as much of the company from under the thumb of the state. PG&E has been chastised by Davis for its refusal to follow the path of SCE, which opted for a state-led restructuring plan. Instead they filed for bankruptcy protection with the courts. Both PG&E and SCE racked up enormous debts under California's deregulation plan since they were forced to cover high spot market power purchases that they could not recover through their retail rates, which the state froze. However, PG&E refused to play along with Davis's electricity plans, which is starting to look like the smart decision. SCE signed a memorandum of understanding with Gov. Davis that said the state legislature would create a viable bailout plan for the utility, which has some $3.9 billion in debt. Unfortunately, after much political wrangling, the legislature was unable to pass a bill before the end of its session on Sept. 14. Davis has said that he will call them back for a special session of the legislature at the beginning of October but that may not be in time for the ailing utility. Published reports from last week said that two SCE creditors, Reliant Energy and Mirant, may try to force the company into involuntary bankruptcy. A spokesman for Reliant said that he could not comment on the report. SCE is refusing to go down the bankruptcy path, however. "We do not intend to file voluntary bankruptcy," said Ted Craver, chief financial officer for SEC's parent company Edison International, during a conference call last week. "We ask our creditors to continue to forbear and work with us. We will vigorously oppose any involuntary bankruptcy petition," he said. Craver, however, did admit that the chances the company would have to declare bankruptcy had grown much higher. - Christian Schmollinger.
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