EDITORS: Please do not use
"Pacific Gas and Electric" or "PG&E" when
referring to PG&E Corporation or its National Energy Group.
The PG&E National Energy Group is not the same company as Pacific
Gas and Electric Company, the utility, and is not regulated by the
California Public Utilities Commission. Customers of Pacific Gas
and Electric Company do not have to buy products or services from
the National Energy Group in order to continue to receive quality
regulated services from Pacific Gas and Electric Company.
OF REORGANIZATION RECEIVES OVERWHELMING CREDITOR APPROVAL; CREDITORS
SOUNDLY REJECT CPUC PLAN AND OCC'S RECOMMENDATION
PG&E's Plan Receives Approval
from 9 of 10 Voting Classes, While CPUC's Alternative Plan Only
Receives Approval from 1 of 8 Voting Classes
(San Francisco) -- Pacific
Gas and Electric Company today issued the following statement after
the independent voting agent, Innisfree M & A, submitted the results
of the creditor vote to the U.S. Bankruptcy Court. The final tabulation
showed that PG&E's reorganization plan received approval from nine
of the ten voting classes:
"We are gratified that our
plan of reorganization received overwhelming support from equity
holders and creditors, including the large financial institutions,
capital market participants and other key organizations.
"Our plan received approval
from nine of the ten voting classes. This outcome is an important
vote of confidence that our plan will resolve creditor claims, in
a financially feasible manner, without seeking a bailout from customers.
The only class voting against our plan was Class 7, Energy Service
Providers, a class dominated by claims of Enron Corporation; this
class voted against both plans and their negative vote will not
prevent the confirmation of our Plan.
"Despite a recommendation
from the Official Creditors' Committee (OCC) urging creditors to
vote affirmatively for both plans, the CPUC's alternative plan was
rejected by seven of the eight voting classes, including the unsecured
creditors in Class 5. This group, consisting of sophisticated financial
institutions and capital market participants, clearly did not believe
that the CPUC's plan is credible, even though it purports to pay
all creditor claims.
"This vote is a rejection
by creditors of the recommendation of the Official Creditors' Committee.
In a cover letter sent to all creditors, the OCC urged them to vote
affirmatively for both plans.
"After the voting period
ended, the CPUC amended its alternative plan, based on an agreement
with the Official Creditors' Committee, and is seeking to resolicit
the votes of certain creditors. PG&E will respond to that motion
on September 17th.
"However, the CPUC and OCC
have declared that their amended plan is, in the words of their
counsel, 'not a new plan, it involves relatively minor modifications
to our existing plan.' In that case, the overwhelming creditor vote
against the CPUC plan would be unlikely to change.
"PG&E continues to believe
it has developed the only practical solution that allows the utility
to emerge from Chapter 11 as an investment-grade company, pays all
valid claims in full with interest and achieves these goals without
asking the Bankruptcy Court to raise rates or the State for a bailout."
PG&E's plan of reorganization
also enjoys broad based support from a number of local and statewide
organizations, including labor unions, business associations and
The Bankruptcy Court confirmation
hearings are scheduled to begin on November 12th.