*  yesterday's San Diego Union Tribune




PG&E sent hard-nosed proposal to Davis demanding no regulation 





ASSOCIATED PRESS 
April 16, 2001 
SAN FRANCISCO ) Pacific Gas and Electric Co. officials demanded the utility 
be cut free from state regulation and be allowed to push huge rate increases 
onto its customers, two weeks before negotiations with Gov. Gray Davis broke 
off, the San Francisco Chronicle reported. 

"Perhaps we misjudged their primary concern," said Steve Maviglio, the 
governor's spokesman. "It wasn't resolving their credit issue. It was 
extracting vengeance on the PUC." 

In addition to insisting that it be released from the state Public Utilities 
Commission's regulatory grip, PG&E demanded it be allowed to buy back its 
power lines without competitive offers if the state ever decided to sell. In 
addition, it wanted to continue profiting from any telecommunications lines 
or antennas linked to the system, according to a Feb. 28 eight-page proposal 
obtained by the Chronicle and published Sunday. 
n Developments in California's energy crisis 

PG&E denies the document influenced the outcome between the utility and the 
state. 
"It is ludicrous to suggest that this document caused the negotiations to 
break down," said PG&E spokesman Ron Low. "There were negotiations that 
occurred later and other documents that followed." 
At the time of the utility's bankruptcy filing April 6, PG&E Corp. Chairman 
Robert Glynn said no talks had been held for three weeks. PG&E's proposal had 
been delivered about two weeks before talks ceased. 
PG&E has said it's entitled to recoup $9 billion it paid for wholesale power 
because of PUC-regulated rate caps, which kept the utility from passing high 
costs onto customers. 
The proposal said this money "will be fully recovered in retail rates without 
further CPUC review for prudence or any other purpose," the Chronicle 
reported. 
The document went on to demand the PUC drop all proceedings concerning PG&E, 
including an investigation into whether the utility violated California law 
by transferring millions to parent company PG&E Corp. prior to filing 
bankruptcy. 
"They took a position on regulatory matters that was out of touch with 
reality," Maviglio said. 
PG&E Corp. spokesman Shawn Cooper declined to comment on the proposal. 
"That document is confidential," he said. 
Ratepayer advocates say they're baffled by PG&E's demands. 
"It's like the Japanese insisting that we surrender Hawaii after we beat them 
in World War II," said Harvey Rosenfield, consumer advocate for the 
Foundation for Taxpayer and Consumer Rights. 




, Copyright 2001 Union-Tribune Publishing Co.