A consumer group’s proposal that a committee represent Pacific Gas and Electric Co.’s millions of ratepayers during its bankruptcy proceedings is not authorized by law or necessary to protect ratepayers’ interests, the judge overseeing the case ruled Tuesday.
Since the state’s largest public utility, facing huge debts from wildfires, filed for bankruptcy in January, committees have been appointed to represent its unsecured creditors and holders of legal claims against the company that are backed by secured assets, which is standard procedure in such cases. The Utility Reform Network argued this month for a separate committee to represent ratepayers, saying they will have to pay the bill if PG&E can’t afford the costs of wildfires for which it is held responsible.
But U.S. Bankruptcy Judge Dennis Montali said Tuesday the law would allow him to appoint a new committee only if it represented another group of creditors, and “ratepayers are not creditors.”
The consumer group argued that ratepayers are creditors because they currently receive credits on their bills every six months from the fees utilities pay for emissions of greenhouse gases under California’s cap-and-trade program. But Montali said those credits are automatic, are deducted from each customer’s rates, and do not make ratepayers the equivalent of creditors.
He also said a new committee is unnecessary because the California Public Utilities Commission regulates PG&E’s rates.
“If any future plan (following the bankruptcy) includes a rate change, the utility would first have to obtain full approval from the CPUC, and any ratepayer or entity would have the opportunity to be heard by the regulatory agency,” Montali said.
The consumer group’s executive director, Mark Toney, said he was “disappointed that PG&E has prevailed in getting the judge to deny a ratepayer vote in the bankruptcy court.” The Public Utilities Commission represents the entire public interest, including PG&E, and not just ratepayer interests, he said.
But Toney said his group would start raising funds to form its own ratepayer committee that would submit comments and participate, even if unofficially, in the bankruptcy proceedings.