Message-ID: <9223505.1075851645463.JavaMail.evans@thyme> Date: Thu, 20 Sep 2001 16:32:35 -0700 (PDT) From: susan.mara@enron.com To: jeff.dasovich@enron.com Subject: FW: PG&E's Plan of Reorganization under the Chapter 11 bankruptcy pro cess Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable X-From: Mara, Susan X-To: Dasovich, Jeff X-cc: X-bcc: X-Folder: \Dasovich, Jeff (Non-Privileged)\Dasovich, Jeff\Inbox X-Origin: DASOVICH-J X-FileName: Dasovich, Jeff (Non-Privileged).pst -----Original Message----- From: =09Hetrick, Nancy =20 Sent:=09Thursday, September 20, 2001 4:24 PM To:=09Mara, Susan; Kingerski, Harry; Steffes, James D. Cc:=09Huddleson, Diann; Hughes, Evan Subject:=09FW: PG&E's Plan of Reorganization under the Chapter 11 bankruptc= y pro=09cess Importance:=09High FYI! Nancy A. Hetrick Enron Corp. Director, Government Affairs Phone: 712-366-3399 Pager: 888-912-1426 -----Original Message----- From: =09"Lerma, Yolanda" @ENRON [mailto:IMCEANOTES-+22Lerma+= 2C+20Yolanda+22+20+3CYxD1+40pge+2Ecom+3E+40ENRON@ENRON.com]=20 Sent:=09Thursday, September 20, 2001 5:52 PM To:=09ABAG01 (elec) - ABAG Power, 1st Jerry Lahr (E-mail); ACNNRG (elec) AC= N Energy -2nd Mark Warno (E-mail); ACNNRG (gas/ elec) - ACN Energy Inc. 2nd= Hans Herzog (E-mail); ACNNRG gas/ elec) - ACN Energy 1st Tony Cusati (E-ma= il); AESINC (elec) - AMERICAN ENERGY SAVINGS INC., 1st RUSS KOEHLER (E-mail= ); ARZPS1 (elec) - Arizona Public Service,1st Merilyn Ferrara (E-mail); CEE= - Clean Earth Energy Inc. 2nd/SP2C Joslyn Tran (E-mail); CEE (elec) -Clean= Earth Energy Inc., 1st CRAIG KONRAD (E-mail); CLNEGY (elec) - Consumer Ene= rgy Services (previously Clean Earth), 1st Desmond Cojohn (E-mail); CLNG (e= lec) - Go-Green (cleen'n green), 1st contact Dennis Dyc (E-mail); CSC Energ= y - Julie Logsdon (E-mail); CWEC01 (elec) Commonwealth Energy, 1st Rebecca = Schlanert (E-mail); DES (elec) - Dynegy, 1st Tom O'Neil (E-mail); DUKSOL (e= lec) - DukeSolutions Inc., 1st Kathy Abernethy (E-mail); EDSRC1 (elec) - Ed= ison Source, 1st Steve Buss (E-mail); EPMI (elec) - ENRON Energy Servcices = Inc. 1a Diann Huddleson (E-mail); EPMI (elec) - ENRON Energy Services Inc. = 1st contact - Nancy Hetrick (E-mail); EPMI(elec) - Debbie Weakley (E-mail);= GRNMT1 (elec) - Green Mountain Energy Resources L. L. C. - 1st contact - A= gnes Barard (E-mail); GRNMT1 (elec) SP2C/Dasr 2nd Heidi Silloway (E-mail); = IPCMAR (elec) - Idaho Power Company 1st Gordon Pickering (E-mail); IPCMAR (= elec) - Idaho Power, 2nd Tami Spangler (E-mail); LID (elec) - Laguna Irriga= tion District, 1st Doug/Carol Rayner (E-mail); NEWEV1- NewEnergy California= 1st Add'tl Bill Chen (E-mail); NEWEV1(elec) - NewEnergy California LLC - 1= st contact/outage-Martha Dobler (E-mail); NPW (elec) - New Power Company 1s= t Al Pollard (E-mail); NPW (elec) - The New Power Company2nd Peter Bray (E-= mail); NWERG1 (elec) - New West Energy - 1st Janie Mollon (E-mail); NWERG1 = (elec) New West Energy 2nd/SP2C Carolyn Johnson (E-mail); P4LESS (elec) - P= ower For Less - Clark Nunes (E-mail); PGEES1 (elec) - Enron Energy Marketin= g Corp - PGEES (elec) - 1st/Outage/EDI/DASR Di'onne Williams (E-mail); PGEE= SV (elec) - PG&E Energy Services Venture sLLC 1st Don Stuphin (replacesJAME= S C DAVIS) (E-mail); PILOT - Pilot power Group Inc. (E-mail); POWERS (elec)= - PowerSource Ltd., 1st Roman Gordon (E-mail); SEACL1 (elec) - City of Sea= ttle City Light Dept. 1st Marilynn Semro (E-mail); SEMPRA (elec) - Sempra E= nergy Solutions, 1st Edwin Hornquist (E-mail); SMUDCO (elec) - Sacramento M= unicipal Utility District - Rhonda Hensley (E-mail); SMUDCO (elec) Sacramen= to Municipal Utility District, 1st Sherri Eklof (E-mail); TNDPWR (elec) - T= enderLand Power, 1st Patricia Y. Lee (E-mail); UNIENM (gas/elec) - United G= as Managmeent 2nd K Hatz (E-mail); UNIENM (gas/elec) United Gas Mgmnt,1st T= Lewis (E-mail); UTILIS (elec) - Utilisource Corporation,1st Tracy L Rush (= E-mail); WWE (elec) - Utility. com, 1st David Bayless (E-mail); WWE (elec) = cc Rob Mac Aulay (E-mail) Cc:=09Yee, Calvin M (ESP Relations); Alexander, Michael (RAS) Subject:=09PG&E's Plan of Reorganization under the Chapter 11 bankruptcy pr= o=09cess Importance:=09High To all Electric Energy Service Providers: Because you provide Direct Access service to PG&E electric distribution customers, we knew that you would be interested in today's announcement of our Plan of Reorganization under the Chapter 11 bankruptcy process. The plan involves a restructuring of the Pacific Gas and Electric Company business and a refinancing of our assets. As noted in our press release, the plan has the full support of the creditor's committee. Following is the press release we issued this morning. Further information and a copy of the Plan of Reorganization is -- or soon will be -- available at www.pge.com. I am sending this message simply for your information, not because of any expected effect on the Direct Access program. I expect that you will continue to work with essentially the same people and work groups after the transition as before. Also, recognize that this is a long process, which w= e hope will be complete by January 2003. You can follow major events in our pursuit of approval and consummation of this plan on our web site. We believe the completion of this plan will resolve creditors' valid claims and maintain stability for our customers an= d employees, as well as provide long-term benefits to the state. If you have questions, please do not hesitate to call Calvin Yee @ (415/973-5683) or Michael Alexander @ (415/973-2932) ---------------------------------------------------------------------------= - ---------------------------------------------------------------------------= - ------------------------- Pacific Gas and Electric Company and PG&E Corporation File Plan of Reorganization 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 Pacific Gas and Electric Company jointly filed a Plan of Reorganization in U.S. Bankruptcy Court today that enables Pacific Gas and Electric Company t= o pay all valid creditor claims in full and emerge from Chapter 11 bankruptcy proceedings. The official creditors' committee supports the plan. "This plan is an achievable solution that will enable Pacific Gas and Electric Company to move out of Chapter 11 as a financially strong business positioned to continue safe, reliable and responsive delivery of gas and electricity to its customers, pay all valid creditor claims in full, and do so without 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 President of PG&E Corporation. "And, the plan will enable us to provide long-term growth prospects to shareholders." The plan reorganizes Pacific Gas and Electric Company and PG&E Corporation into two separate, stand-alone companies no longer affiliated with one another. The reorganized Pacific Gas and Electric Company will continue to own and operate the existing retail electric and natural gas distribution system. The electric generation, electric transmission, and natural gas transmission operations currently under Pacific Gas and Electric Company will be part of PG&E Corporation. The common shares of the reorganized Pacific Gas and Electric will be distributed to PG&E Corporation shareholders. The electric generation, electric transmission and gas transmission operations, when reorganized as new businesses under PG&E Corporation, will have the ability to issue debt that will be combined with new financing at Pacific Gas and Electric and used to help pay creditors' claims. The plan also restructures certain existing debt and uses $3.3 billion in cash on hand to satisfy creditor claims. Under the plan, all valid creditor claims will be paid in full, using a combination of cash and long-term notes. In total, the plan will provide creditors with about $9.1 billion in cash and $4.1 billion in notes. The vast majority of creditors-those with allowed claims of $100,000 or less-will receive cash payments for the full amount of their allowed claims on the effective date of the plan. Most secured creditors will also receive 100 percent of their allowed claims in cash. Finally, unsecured creditors with allowed claims in excess of the $100,000 threshold will be paid 60 percent in cash and 40 percent in notes. Following the restructuring, Pacific Gas and Electric Company and PG&E Corporation will be organized as follows: *=09Pacific Gas and Electric Company will be a separate California corporation focused on providing electric and natural gas distribution service to its customers in Northern and Central California. It will hold 7= 0 percent of the current utility assets (in terms of book value) and will employ 16,000 people. Pacific Gas and Electric Company will continue to provide the full range of utility services to one out of every 20 Americans= . *=09PG&E Corporation, in addition to its existing National Energy Group business, will have three new businesses that will own and operate the electric generation, electric transmission and gas transmission operations formerly under Pacific Gas and Electric Company. The new electric generation business will be a California company established to own and operate the hydroelectric and nuclear generation assets and associated lands, and to assume the power contracts with irrigation districts, now held by the utility. In total, the unit will have approximately 7,100 megawatts of generation. The facilities will be operate= d in accordance with all current FERC and Nuclear Regulatory Commission licenses, and in keeping with sound environmental stewardship policies. The generating business will sell its power back to the reorganized Pacific Gas and Electric Company under a 12-year contract at a stable, market-based rate. The new electric transmission business will be a California company established to own and operate the transmission system currently operated b= y the utility. 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 gas storage facilities. Following the reorganization, the California Public Utilities Commission will continue to regulate the reorganized Pacific Gas and Electric Company, including retail electric and natural gas rates. The Federal Energy Regulatory Commission (FERC) will continue to have jurisdiction over the licenses for the hydroelectric assets, and the rates, terms and conditions of service provided by the electric transmission business. FERC will also assume jurisdiction over rates for the power generated by the Diablo Canyon Nuclear Power Plant, and over the rates, terms and conditions of service fo= r the gas transmission system, which will become an interstate pipeline. Glynn said, "This plan, without raising retail rates, provides a safe, reliable and long-term electric supply to California customers. It enables our company to maintain a qualified workforce. And it enables us to keep ou= r 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 essentially the same people who operate the various assets under the curren= t organization. "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 th= e people who know how to run them best." In addition to resolving creditors' claims and maintaining stability for customers and employees, the plan also provides long-term benefits to the state. It provides the state with a path to exit the business of buying power for customers, by identifying conditions under which Pacific Gas and Electric Company would be financially able to re-assume the procurement responsibility that is currently being fulfilled by the state Department of Water Resources. The Chapter 11 process requires that the plan of reorganization ultimately be confirmed by the Bankruptcy Court before it can be implemented. Paul Aronzon, legal counsel for the Official Committee of Unsecured Creditors, said "This plan provides a comprehensive and responsible framework to resolve creditors' claims and restore PG&E's creditworthiness. It has our full support, and we look forward to an expeditious resolution o= f the Chapter 11 process." "With this plan filed," said Glynn, "we are now focused on bringing the Chapter 11 process to completion, reaffirming the financial health and creditworthiness of our operations through this reorganization, restoring customers' confidence, and rebuilding value for our shareholders." --PG&E News Calvin Yee Sr. Account Manager, Beale, MC B19C San Francisco, CA 94105 phone: 415-973-5683; fax: 415-973-8494