3
Situation Overview
¨PG&E
filed for Chapter 11 in April 2001
¨In
September 2001, PG&E proposed its Plan of Reorganization
—separates PG&E into four entities along functional
lines
—transfers certain assets from CPUC to FERC regulation
—disaggregation requires more than 100
separate operating agreements between generation, transmission and distribution entities
¨In April 2002, the CPUC proposed an
Alternative Plan of Reorganization
—maintains PG&E as an integrated utility
—originally contemplated issuance of $1.5 billion in common
equity
¨In August 2002, the OCC joined the CPUC to
become co-proponents of a revised OCC/CPUC
Plan of Reorganization
—OCC/CPUC Plan now contemplates issuance of
first mortgage bonds and substitutes
an issuance of $1.5 billion in preferred securities and senior unsecured debt for issuance of common equity
—includes $1.75 billion regulatory asset to be amortized over
10 years
¨In January 2003, the OCC terminated an
earlier plan support agreement with PG&E
¨On February 24, 2003, PG&E materially
altered its plan
—alters creditor treatment and requires $700 million equity
issuance by PG&E’s parent