10
Reorganization Agreement
¨Guarantees
that the CPUC will deem prudent and recoverable all financing costs
associated with the OCC/CPUC Plan
¨Creates a $1.75 billion regulatory
asset to be amortized over 10 years
¨Requires CPUC to establish rates
sufficient to
—pay interest and principal on securities issued under
the OCC/CPUC plan
—pay prudently incurred operating and capital costs
—amortize Regulatory Asset
—achieve and maintain investment-grade credit
ratings
¨Expressly waives CPUC’s sovereign
immunity, allowing the Bankruptcy Court to enforce the Reorganization
Agreement
—Reorganization Agreement will bind future commissions
Included in the OCC/CPUC Plan is a
Reorganization Agreement that affirms the CPUC’s commitment to PG&E’s
credit quality