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Enron Mail |
PG&E Sues to Recover $3 Billion
Exploring yet another legal avenue, Pacific Gas and Electric Co. Wednesday filed in San Francisco's federal district court asking for a judicial ruling that will mandate that it can recover all of the nearly $3 billion in uncollected wholesale electricity costs that have been mounting since May when price spikes in Califonia's market left the state's major investor-owned utilities vulnerable because their retail power rates are frozen at 1996 levels. The utility argued that the wholesale power costs are federally approved, therefore, it filed in federal court. Earlier in the fall, PG&E appealed to the California Supreme Court, asking to overturn a California Public Utilities Commission decision this summer that limits its ability to recover its wholesale costs, which it passes on to customers without adding a profit charge. "We're just keeping our legal options open," said a San Francsco-based utility spokesperson, noting that the utility also is attempting to protect its financial status, which was challenged Tuesday when Fitch placed it and another California utility on a "rating negative watch." State and federal officials all acknowledge as part of a series of ongoing investigations that California's current wholesale electricity market is broken and noncompetitive in its current state, said Roger Peters, senior vice president and general counsel for Pacific Gas and Electric. "However, there has not yet been any concrete action by regulators to provide for recovery of the costs we have incurred to purchase the power our customers must have, either through refunds from power sellers who charged unfair prices, or through retail rates. These costs are continuing to grow." Noting both the unfairness and unpopularity of the skyrocketing wholesale charges, PG&E's utility nevertheless said it has a legal right to recover the charges from its almost four million customers, and it reiterated five steps it has taken to "increase supply, moderate customer demand, repair the broken wholesale market and provide stable, reasonable rates."
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