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HERRERA CHALLENGES PG&E SETTLEMENT State regulators ignored key requirements when they approved Pacific Gas & Electric Co.’s plan to emerge from bankruptcy last month, according to the San Francisco city attorney. In papers filed with the California Public Utilities Commission late Tuesday, S.F. City Attorney Dennis Herrera requested a new hearing on the proposed settlement agreement at the heart of PG&E’s Chapter 11 reorganization plan. “The legally flawed and unduly restricted process that resulted [in the decision] did not provide for an adequate public review of the settlement or a reasoned analysis of the amount of money in fact required,” reads Herrera’s filing. According to the city attorney, the plan to lift PG&E out of bankruptcy imposes excessive costs on ratepayers, unlawfully binds the CPUC to its terms for the next nine years and fails to meet the commission’s “just and reasonable” standard for approving settlement agreements. PG&E’s reorganization plan was endorsed by U.S. Bankruptcy Judge Dennis Montali in December, shortly after the CPUC concluded in a 3-2 vote that it was in the public interest. Herrera contends that the commission failed to determine whether a less costly alternative for ratepayers exists, since no evidence was ever presented establishing the minimum amount of money necessary to restructure PG&E while maintaining its investment-grade rating. “Without this demonstration, there is no basis to support a determination that [the agreement] is just and reasonable, since ratepayers could be forced to pay more than is required to accomplish these objectives,” the filing says. Herrera also claims that last-minute modifications to the agreement (incorporating elements of an alternative plan proposed by The Utility Reform Network) were not subjected to adequate public review. Moreover, the filing contends that CPUC President Michael Peevey should have recused himself from voting to approve the plan since he participated in the closed-door negotiations between PG&E and CPUC staff members that led to the settlement agreement. The CPUC has 60 days to issue a decision on whether to rehear the matter. — Alexei Oreskovic JUSTICES ADDRESS BUDGET PROBLEMS The Conference of Chief Justices approved two resolutions on Wednesday aimed at helping the judiciary get through harsh economic times while retaining its equal status as one of the three branches of government. “This is a serious, and quite wonderful, effort to set out key principles and practical strategies for dealing with these extraordinarily difficult times,” New York Chief Judge Judith Kaye said in presenting the proposals during a meeting in San Francisco. Both resolutions follow the recommendations of a position paper adopted last month by the National Center for State Courts. One of them provides guidelines for running court systems efficiently and responsibly, while the other offers ideas about how to weather tough economic times. Both are aimed at maintaining the bench as an independent branch of the government and preventing it from being treated financially as a department of the executive and legislative branches. California Chief Justice Ronald George said the resolutions would be sent to state bars and court systems in all the states and territories, and possibly to Congress. — Mike McKee

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