Message-ID: <2967881.1075851644734.JavaMail.evans@thyme> Date: Thu, 20 Sep 2001 12:12:25 -0700 (PDT) From: david.parquet@enron.com To: jeff.dasovich@enron.com Subject: RE: PACIFIC GAS AND ELECTRIC COMPANY AND PG&E CORPORATION FILE PLAN OF REORGANIZATION Cc: f..calger@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable Bcc: f..calger@enron.com X-From: Parquet, David X-To: Dasovich, Jeff X-cc: Calger, Christopher F. X-bcc: X-Folder: \Dasovich, Jeff (Non-Privileged)\Dasovich, Jeff\Inbox X-Origin: DASOVICH-J X-FileName: Dasovich, Jeff (Non-Privileged).pst Thanks really would like to know your thoughts on who would get the retail custome= rs that are connected to the transmission system - stay with Pacific Gas an= d Electric Company or go with the new PG&E Corporation. Will they fall und= er CPUC jurisdiction or FERC jurisdiction? To the point, for example, woul= d Hanson (and other similarly situated large industrials), who presently co= nnect under the E-20T tariff today (I think there are about 100 such custom= ers, if I remember correctly) now NOT be under CPUC jurisdiction as they ar= e today? Or possibly worse, would they now be under BOTH jurisdictions? W= hat is your opinion re direct access for this class of customers? Would th= at be under a FERC-approved, vs a CPUC approved, direct access tariff? How= does all the stuff in the legislature that may or may not get straighted o= ut in the 3rd emergency session anticipated by Davis interplay with this? W= hat about surcharges? Etc. Etc. Anything you get on this developing story would be interesting. -----Original Message----- From: =09Dasovich, Jeff =20 Sent:=09Thursday, September 20, 2001 10:58 AM To:=09Parquet, David Subject:=09FW: PACIFIC GAS AND ELECTRIC COMPANY AND PG&E CORPORATION FILE P= LAN OF REORGANIZATION=20 -----Original Message----- From: =09Comnes, Alan =20 Sent:=09Thursday, September 20, 2001 12:46 PM To:=09Alonso, Tom; Alvarez, Ray; Badeer, Robert; Belden, Tim; Calger, Chris= topher F.; Choi, Paul; Dasovich, Jeff; Driscoll, Michael M.; Fischer, Mark;= Foster, Chris H.; Guzman, Mark; Hall, Steve C. (Legal); Heizenrader, Tim; = Kaufman, Paul; Mainzer, Elliot; Mallory, Chris; Malowney, John; Mara, Susan= ; Motley, Matt; Perrino, Dave; Platter, Phillip; Rance, Susan; Richter, Jef= f; Rosman, Stewart; Scholtes, Diana; Stokley, Chris; Swain, Steve; Swerzbin= , Mike; Symes, Kate; Walton, Steve; Williams III, Bill Subject:=09PACIFIC GAS AND ELECTRIC COMPANY AND PG&E CORPORATION FILE PLAN = OF REORGANIZATION=20 It's out ... FOR IMMEDIATE RELEASE=09September 20, 2001 CONTACT: PG&E News Department (415) 973-5930 PACIFIC GAS AND ELECTRIC COMPANY AND PG&E CORPORATION FILE PLAN OF REORGANI= ZATION=20 Plan Pays Claims in Full, Does Not Call for Retail Rate Increases or State = Bailout (San Francisco, CA)- PG&E Corporation (NYSE: PCG) and its utility unit Paci= fic Gas and Electric Company jointly filed a Plan of Reorganization in U.S.= Bankruptcy Court today that enables Pacific Gas and Electric Company to pa= y all valid creditor claims in full and emerge from Chapter 11 bankruptcy p= roceedings. The official creditors' committee supports the plan. "This plan is an achievable solution that will enable Pacific Gas and Elect= ric Company to move out of Chapter 11 as a financially strong business posi= tioned to continue safe, reliable and responsive delivery of gas and electr= icity to its customers, pay all valid creditor claims in full, and do so wi= thout asking for a rate increase or a state bailout," said Robert D. Glynn,= Jr., Chairman of Pacific Gas and Electric Company and Chairman, CEO and Pr= esident of PG&E Corporation. "And, the plan will enable us to provide long= -term growth prospects to shareholders." =20 The plan reorganizes Pacific Gas and Electric Company and PG&E Corporation = into two separate, stand-alone companies no longer affiliated with one anot= her. The reorganized Pacific Gas and Electric Company will continue to own = and operate the existing retail electric and natural gas distribution syste= m. The electric generation, electric transmission, and natural gas transmi= ssion operations currently under Pacific Gas and Electric Company will be p= art of PG&E Corporation. The common shares of the reorganized Pacific Gas a= nd Electric will be distributed to PG&E Corporation shareholders. The electric generation, electric transmission and gas transmission operati= ons, when reorganized as new businesses under PG&E Corporation, will have t= he ability to issue debt that will be combined with new financing at Pacifi= c Gas and Electric and used to help pay creditors' claims. The plan also re= structures certain existing debt and uses $3.3 billion in cash on hand to s= atisfy creditor claims.=20 Under the plan, all valid creditor claims will be paid in full, using a com= bination of cash and long-term notes. In total, the plan will provide cred= itors with about $9.1 billion in cash and $4.1 billion in notes. The vast m= ajority of creditors-those with allowed claims of $100,000 or less-will rec= eive cash payments for the full amount of their allowed claims on the effec= tive date of the plan. Most secured creditors will also receive 100 percen= t of their allowed claims in cash. Finally, unsecured creditors with allow= ed claims in excess of the $100,000 threshold will be paid 60 percent in ca= sh and 40 percent in notes. =09Following the restructuring, Pacific Gas and Electric Company and PG&E = Corporation will be organized as follows:=20 ?=09Pacific Gas and Electric Company will be a separate California corporat= ion focused on providing electric and natural gas distribution service to i= ts customers in Northern and Central California. It will hold 70 percent o= f the current utility assets (in terms of book value) and will employ 16,00= 0 people. Pacific Gas and Electric Company will continue to provide the fu= ll range of utility services to one out of every 20 Americans. =20 ?=09PG&E Corporation, in addition to its existing National Energy Group bus= iness, will have three new businesses that will own and operate the electri= c generation, electric transmission and gas transmission operations formerl= y under Pacific Gas and Electric Company.=20 The new electric generation business will be a California company establish= ed to own and operate the hydroelectric and nuclear generation assets and a= ssociated lands, and to assume the power contracts with irrigation district= s, now held by the utility. In total, the unit will have approximately 7,1= 00 megawatts of generation. The facilities will be operated in accordance = with all current FERC and Nuclear Regulatory Commission licenses, and in ke= eping with sound environmental stewardship policies. The generating busine= ss will sell its power back to the reorganized Pacific Gas and Electric Com= pany under a 12-year contract at a stable, market-based rate.=20 The new electric transmission business will be a California company establi= shed to own and operate the transmission system currently operated by the u= tility. The system comprises 18,500 circuit miles of electric transmission= lines and cables. The new gas transmission business will be a California company established = to own and operate the natural gas transmission assets currently operated b= y the utility, including 6,300 miles of transmission pipelines and three ga= s storage facilities. =20 Following the reorganization, the California Public Utilities Commission wi= ll continue to regulate the reorganized Pacific Gas and Electric Company, i= ncluding retail electric and natural gas rates. The Federal Energy Regulat= ory Commission (FERC) will continue to have jurisdiction over the licenses = for the hydroelectric assets, and the rates, terms and conditions of servic= e provided by the electric transmission business. FERC will also assume ju= risdiction over rates for the power generated by the Diablo Canyon Nuclear = Power Plant, and over the rates, terms and conditions of service for the ga= s transmission system, which will become an interstate pipeline. =20 Glynn said, "This plan, without raising retail rates, provides a safe, reli= able and long-term electric supply to California customers. It enables our= company to maintain a qualified workforce. And it enables us to keep our = generating assets intact and integrated, rather than selling them piecemeal= to pay creditors." The company expects that roles and responsibilities for the vast majority o= f its workforce will be unaffected by the plan. The reorganized Pacific Gas= and Electric Company and the newly established entities will employ essent= ially the same people who operate the various assets under the current orga= nization.=20 "We envision essentially the same experienced, dedicated team continuing to= do their jobs with a comparable level of pay and benefits programs," said = Glynn. "We believe these businesses should be operated and maintained by t= he people who know how to run them best." In addition to resolving creditors' claims and maintaining stability for cu= stomers and employees, the plan also provides long-term benefits to the sta= te. It provides the state with a path to exit the business of buying power= for customers, by identifying conditions under which Pacific Gas and Elect= ric Company would be financially able to re-assume the procurement responsi= bility that is currently being fulfilled by the state Department of Water R= esources. The Chapter 11 process requires that the plan of reorganization ultimately = be confirmed by the Bankruptcy Court before it can be implemented.=20 Paul Aronzon, legal counsel for the Official Committee of Unsecured Credito= rs, said "This plan provides a comprehensive and responsible framework to r= esolve creditors' claims and restore PG&E's creditworthiness. It has our f= ull support, and we look forward to an expeditious resolution of the Chapte= r 11 process."=20 "With this plan filed," said Glynn, "we are now focused on bringing the Cha= pter 11 process to completion, reaffirming the financial health and creditw= orthiness of our operations through this reorganization, restoring customer= s' confidence, and rebuilding value for our shareholders." - 30 - At 10:00 AM Pacific Time today, PG&E Corporation and Pacific Gas and Electr= ic Company will discuss the plan of reorganization on a conference call for= members of the media. The dial-in number for the call is 1 (877) 691-0877= or 1 (800) 521-5461. Passcode 7234. At 11:30 AM Pacific Time today, PG&E Corporation and Pacific Gas and Electr= ic Company will discuss the plan on a conference call for members of the fi= nancial community. The call will be webcast. To access the webcast, go to = www.pgecorp.com. On Monday, September 24, at 5:30 AM Pacific Time, PG&E Corporation and Paci= fic Gas and Electric Company will make a presentation to financial analysts= on the plan. The presentation will be webcast. To access the webcast, go= to www.pgecorp.com. This release contains forward looking statements about the proposed plan of= reorganization (Plan) under Chapter 11 of the Bankruptcy Code for Pacific = Gas and Electric Company (Utility). These statements are necessarily subjec= t to various risks and uncertainties that could cause actual results to dif= fer materially from those contemplated by the forward looking statements. = Although PG&E Corporation and the Utility are not able to predict all of th= e factors that may affect whether the Plan will be confirmed, or whether, i= f confirmed, it will become effective, some of the factors that could affec= t the outcome materially include: the pace of the Bankruptcy Court proceedi= ngs; the extent to which the Plan is amended or modified; legislative and r= egulatory initiatives regarding deregulation and restructuring of the elect= ric and natural gas industries in the United States, particularly in Califo= rnia; whether the Utility is able to obtain timely regulatory approvals or = whether the Utility is able to obtain regulatory approvals at all; risks re= lating to the issuance of new debt securities by each of the disaggregated = entities, including higher interest rates than are assumed in the financial= projections which could affect the amount of cash raised to satisfy allowe= d claims, and the inability to successfully market the debt securities due = to, among other reasons, an adverse change in market conditions or in the c= ondition of the disaggregated entities before completion of the offerings; = whether the Bankruptcy Court exercises its authority to pre-empt relevant n= on-bankruptcy law and if so, whether and the extent to which such assertion= of jurisdiction is successfully challenged; whether a favorable tax ruling= or opinion is obtained regarding the tax-free nature of the internal restr= ucturings and spin off contemplated by the Plan; and the ability of the Ut= ility to successfully disaggregate its businesses;=20 Please visit our websites: www.pgecorp.com and www.pge.com