California’s leading advocacy group for electricity ratepayers wants the bankruptcy court overseeing PG&E Corp.’s PCG -0.28% restructuring to let the troubled utility’s various stakeholders chime in on how it should be overhauled.
The Utility Reform Network, or TURN, agrees with a legal filing by the company’s bondholders last week petitioning the California bankruptcy court overseeing the case to lift PG&E’s exclusive right to file a restructuring plan, said TURN’s Executive Director Mark Toney.
“The sooner the exclusivity period is over, the sooner potential proposals can get on the table from all stakeholders,” said Mr. Toney. “That is what we’re most interested in.” TURN is focused on ensuring whatever proposal the bankruptcy court ultimately approves doesn’t rely on rate increases to pay for the company’s recapitalization, he said.
Debtors benefit from exclusivity periods that can last for years after they seek bankruptcy protection, allowing them time and leverage to negotiate restructuring plans with their creditors. It is rare for bankruptcy judges to lift exclusivity, but Judge Dennis Montali, who is overseeing the PG&E case, indicated in May he might consider hearing competing plans. PG&E’s current exclusivity period expires in September.
TURN hasn’t decided whether it supports the bondholder plan, but the organization wants exclusivity to end so ratepayers can see as many alternatives as possible before choosing which one to endorse, Mr. Toney said. Judge Montali rejected in April a request by TURN to have standing as a creditor in PG&E’s case, but the support of the advocacy group would add to the political viability of any restructuring proposal, analysts said.
The utility’s 6.05% bond due in 2034 traded at 110.50 today, up from around 105 before the committee made its request.
Rising power costs are a hot-button issue in California, giving TURN clout in state politics, which are playing an outsize role in PG&E’s bankruptcy. Ratepayers, victims of wildfires and insurers who cover them are all participants in the process.
PG&E has yet to file a plan of reorganization, but the company is working on a financing that would not entail issuance of equity, which would dilute existing shareholders, or raise customer rates to pay fire-related liabilities, a person familiar with the matter said.
U.S. government-bond yields edged higher Monday, with the yield on the benchmark 10-year Treasury note settling at 2.033% from 2% Friday. The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, rose to 89.98 Monday from 89.54 Friday.