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The state’s five top energy regulators played host to the Pacific Gas & Electric Co.’s traveling bankruptcy show Tuesday as they prepare to make a crucial decision on whether to endorse the utility’s latest reorganization plan. In a two-hour en banc hearing before the California Public Utilities Commission, more than a dozen parties took turns urging the CPUC to approve, alter or outright kill the settlement agreement at the heart of PG&E’s bid to emerge from Chapter 11 bankruptcy. “The choice before you is either resolve or prolong our bankruptcy, either resolve or prolong the state’s energy crisis,” said Gordon Smith, the CEO of PG&E. “It is only a slight exaggeration to say that the entire financial world is watching today,” he added later. The settlement agreement was inked by PG&E and CPUC staffers in July, ending a battle by each group to advance its own blueprint dictating the terms of PG&E’s exit from bankruptcy. The confirmation trial over the new, single PG&E bankruptcy reorganization plan concluded in federal bankruptcy court last week. But the CPUC must also bless the settlement agreement for the plan to be valid. A number of critics slammed the agreement as too costly for ratepayers and warned that provisions giving the bankruptcy court jurisdiction over enforcement of the agreement would effectively surrender the CPUC’s ratemaking authority. “Whatever you do, please maintain your jurisdiction,” said Robert Cagen on behalf of the Office of Ratepayers Advocates. “I promise you that the delegation of ratemaking authority to a bankruptcy court is a bad idea.” Some of the commissioners appeared uneasy with PG&E’s contention that the settlement agreement was a take-it-or-leave-it proposition, not open to negotiations or modification. Commissioner Jeff Brown asked Smith if PG&E would agree to settlement agreement changes that did not affect the utility’s creditworthiness. “I am not prepared to support any settlement other than the settlement we reached with your staff,” replied Smith. This inflexible position could prove problematic when the commissioners vote on the agreement, which is expected to happen Dec. 18. Last month, Administrative Law Judge Robert Barnett issued a proposed decision advising the commissioners to reject the settlement agreement unless serious modifications were made, including deleting the provision giving enforcement jurisdiction to the bankruptcy court. And at Tuesday’s hearing, the commissioners repeatedly asked questions about making other modifications, such as tweaking the nine-year duration of the plan’s $2.1 billion regulatory asset. Several objectors to the plan advised the commissioners to shave down the size of the asset. “The evidence demonstrates that there is more money here for PG&E than is actually necessary to get PG&E out of bankruptcy,” said Theresa Mueller, a lawyer in the San Francisco city attorney’s office.

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