Judge Denies Ratepayers’ Bid for Representation in PG&E Bankruptcy

The bankruptcy court presiding over PG&E Corp.’s chapter 11 case denied California ratepayers’ attempt to gain a seat at the negotiating table as an official committee.

In papers filed Tuesday, Judge Dennis Montali ruled that ratepayers aren’t creditors and don’t need separate representation apart from the official committee of unsecured creditors or the official committee of tort claimants.

At a hearing earlier in May, Cecily Dumas, the lead lawyer for the official committee of wildfire victims, told Judge Montali that customers fear PG&E’s bankruptcy will end in higher rates for electricity.

Official committee status would entitle ratepayers to hire professionals and to send the bill to PG&E. In addition to its own lawyers and advisers, PG&E in bankruptcy is required to pay for lawyers and advisers for other official committees.

PG&E damages from wildfires last year could prove to be higher than $30 billion, the fire victims have said in court papers. With more than $24 billion owed to bondholders, lenders and other creditors, PG&E might have to raise rates if it wants to emerge from chapter 11 with all its debts paid.

Moody’s Investors Service, in a report earlier this year, also cited the possibility that PG&E’s customers will see higher bills because of the utility’s fire damages.

The Utility Reform Network, an organization that represents California ratepayers that was pushing in court for the appointment of an official ratepayers’ committee, argued that ratepayers are creditors because they are entitled to a semiannual credit on their utility bills worth over $450 million. The semiannual credit, however, doesn’t qualify as a claim in bankruptcy because the court already has entered an order permitting PG&E to continue applying those credits, and the credits are mandated by the California Public Utilities Commission and a state law, according to Judge Montali’s decision.