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Pacific Gas & Electric Co. filed a revised plan to emerge from bankruptcy Thursday, one month after a judge rejected its first attempt as a “full-scale attack” on state laws. The San Francisco-based utility again asked U.S. Bankruptcy Court Judge Dennis Montali to allow it to sidestep certain aspects of state authority, contending that such an arrangement would help it repay creditors. In its new filing, PG&E narrowed its request, asking for permission to preempt “only those laws necessary” to effect the plan. In particular, PG&E wants exemption from state provisions that prohibit it from selling property and assets, issuing debt or securities and operating its affiliates. “PG&E continues to believe that its plan for reorganization is the only feasible solution,” said PG&E chairman and CEO Robert Glynn Jr. In last month’s rebuke of PG&E’s plan, Montali did not say state laws could not be preempted by the bankruptcy plan. He underscored, however, that a “balancing test” must be applied to the state’s interests and PG&E’s. He ordered the utility to provide more detail and change its plan. Thursday’s filing was in response to that order. PG&E’s reorganization plan would break the utility into four new entities, three of which would no longer fall under state regulation. Once reshuffled, the affiliates would raise money by leveraging their assets to pay back the $13.2 billion it owes to creditors. The California Public Utilities Commission, which in January was granted permission to file an alternative plan, has opposed allowing PG&E to side-step state laws. The CPUC proposes the utility use the $6.1 billion it estimates it will have in cash on hand by Jan. 2003 to pay off certain creditors, while refinancing and reinstating balances owed to holders of long-term notes and other obligations not immediately due. Additionally, the CPUC wants PG&E to stop paying dividends through 2003 and reap additional cash from ratepayers through 2003 to pay creditors. The California Public Utilities Commission is represented by Walter Rieman of New York-based firm Paul, Weiss, Rifkin, Wharton & Garrison. Objections to PG&E’s plan are due in court March 19. Then on March 26 the bankruptcy court is scheduled to hold a hearing on PG&E’s latest reorganization plan. PG&E filed for Chapter 11 protection in April 2001. At that time the company posted $9 billion in losses buying power at prices higher than state law allowed it to charge customers. PG&E submitted its revised plan after the stock market’s close. Shares of PG&E were little changed on Thursday, closing down .04 percent at $22.60. Jim Lopes, a partner at San Francisco’s Howard Rice Nemerovsky Canady Falk & Rabkin, is heading up the case for PG&E. Copyright (c)2002 TDD, LLC. All rights reserved.

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