Published Thursday, November 9, 2000, in the San Jose Mercury News 
PG&E seeks OK to recoup billions
UTILITY ASKS COURT
TO ALLOW COLLECTING
EXTRA FROM CUSTOMERS 
Associated Press 
Pacific Gas & Electric Co., facing dramatic increases in the cost of 
wholesale electricity, asked a federal court in San Francisco on Wednesday 
for permission to recoup some $3.44 billion in excess charges from its 
ratepayers. 
The utility, which has 4.5 million customers across the northern part of the 
state, said court intervention was necessary ``to protect the company's legal 
rights.'' 
Federal regulators, the state Public Utilities Commission and other 
authorities ``have all acknowledged that the current wholesale power market 
is broken and not capable of producing competitive wholesale energy prices,'' 
said Roger Peters, a senior vice president with PG&E. 
``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,'' Peters said. 
PG&E earlier sought PUC authorization to obtain the costs, but was rebuffed. 
Consumer groups have opposed PG&E's cost-recovery plans, saying the utility, 
not its customers, should cover the costs. 
The utility operates under a rate freeze and is limited as to how much it can 
charge its customers. It has paid four- and fivefold higher costs for 
wholesale energy, and by law is unable to pass those charges on to its 
customers. 
The rate freeze will remain in effect until the company completes its 
transition to an open market utility under the provisions of a 1996 law that 
deregulated California's investor-owned electric utilities. The transition 
entails selling off assets and buying energy in a competitive, open market. 
San Diego Gas & Electric Co. completed its transition last year. The utility 
passed on the huge wholesale price spikes to its 1.2 million customers, 
prompting a political outcry and state, federal and local investigations, and 
legislation in Sacramento.

PG&E sues to get costs ruling reversed
By Carrie Peyton
Bee Staff Writer
(Published Nov. 9, 2000) 

Pacific Gas and Electric Co. sued state regulators in federal court Wednesday 
to try to recoup more than $3.4 billion from Northern California electric 
customers. 
The utility wants to collect, with interest, the money it has paid to 
wholesale power suppliers. State regulators are still studying the issue, but 
so far have ruled that certain collections are forbidden because electric 
rates were temporarily frozen under a 1996 state law. 
That line of reasoning is "in defiance of federal law," PG&E attorneys wrote, 
asking the U.S. District Court in San Francisco to order the state Public 
Utilities Commission to reverse its stand. 
PUC rulings have "caused PG&E severe financial harm and threaten the safety 
and reliability of the state's electrical supply," PG&E's request for a 
federal injunction said. 
Wednesday's action takes PG&E's drive to collect higher rates into a third 
arena, with a fourth -- the state Legislature -- widely expected to get 
involved soon. 
PG&E has already asked the PUC for permission to collect more money, and it 
has already appealed one unfavorable PUC decision as far as the state Supreme 
Court, where it is still pending. The latest step surprised no one. 
"It's the very suit we expected," said Timothy Sullivan, adviser to PUC 
Commissioner Henry Duque. 
PG&E said it still wants to work with policy makers to find ways to bring 
sky-high wholesale electricity prices back down to earth. 
"We have taken every step the state would allow to try to keep power costs 
down," general counsel Roger Peters said in a prepared statement, but the 
latest court action is critical for "protecting our financial viability." 
The legal theory that PG&E is using has not been tested under circumstances 
of a partly deregulated electricity market, said Nettie Hoge, executive 
director of The Utility Reform Network, a consumer group. 
"I think they're dreaming. Maybe they should go to the World Court next," she 
said.