Pacific Gas & Electric asks court for DWR hearing

Pacific Gas & Electric Co. said it asked a Sacramento Superior Court to require the state Department of Water Resources (DWR) to hold a public hearing before determining whether its $13 billion in power purchase contract costs are just and reasonable and should be charged to electric retail ratepayers.

The California utility, presently operating in bankruptcy court, claimed an analysis indicated DWR padded its revenue requirement for 2001-2002 by more than $3 billion due to overestimating the cost for spot power purchases and natural gas. As a result, PG&E said its customers would overpay over $1.4 billion in the next 2 years alone.

The petition requested the court to order DWR to withdraw its determination its revenue requirement is just and reasonable until it complies with federal and state laws and holds a public hearing.

The state agency began purchasing electricity on behalf of PG&E, Southern California Edison Co., and to a lesser extent San Diego Gas & Electric Co. when they could no longer pay their wholesale electricity bills. Pacific Gas & Electric filed for bankruptcy protection while Southern California Edison has struck a deal with California Gov. Gray Davis for a bailout.

Roger Peters, Pacific Gas and Electric’s senior vice-president and general counsel, said under California and federal law DWR must hold a hearing to allow utility customers, consumer groups, and all other interested parties an opportunity to comment on the justness and reasonableness of its revenue demands.

At stake are $68 billion of costs to utility customers over the next 10 years under DWR contracts which have never been reviewed in a public hearing, the utility said, or about $6,800 for each of the 10 million electric customers within the service areas of Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electrc.

DWR has claimed an exemption from any review by the public or the California Public Utilities Commission (PUC), Pacific Gas & Electric said.

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