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Reorganisation plan filed by PG&E

PACIFIC GAS AND ELECTRIC CO has filed a reorganisation plan that company officials said would let the utility fully pay its debts, but not raise customer rates. Under the plan filed in a US Bankruptcy Court in San Francisco, the utility would split from its parent company, PG&E Corp, and transfer generating and electric and gas transmission assets to form three new companies.

PG&E’s plan would create three new companies: one for natural gas transmission, another for electrical transmission and a third that would own PG&E’s hydroelectric and nuclear power plants. The generating arm of the company would operate hydroelectric dams and the Diablo Canyon nuclear power plant, which together produce about 7100MW of electricity. It would use a 12-year contract with PG&E to sell the energy from those plants for an average cost of 5 cents per kilowatt hour.

All three would come under the corporate umbrella of PG&E’s parent company, PG&E Corp, and will be operated separately from the utility. Restructuring would allow the utility and the new companies – all to operate under the parent PG&E Corp – to pay its debts by raising US$13.2B in cash and loans. PG&E filed for Chapter 11 bankruptcy protection in April, after racking up billions in debts from high wholesale power costs the flawed 1996 deregulation law prevented it from passing on to customers.