Regulators have agreed to let PG&E delay paying two-thirds of the $1 billion it owes customers, allowing the power company to take the next two years to pay the full amount.
The utility company was supposed make a full payment into a fund designed to repay customers for helping finance a $7.5 billion wildfire bailout by March 31.
In a letter granting the utility permission to pay just one third now, CPUC executive director Rachel Peterson stressed that the utility must pay in full should the fund to credit customers run dry.
PG&E said in a statement that it appreciated the agency’s “thoughtful review” of its request and stressed that the delayed payment will not impact rates.
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But critics said the delay raises questions about PG&E management.
“We don't have the money, so please let us off the hook,” was the message being conveyed, said Steve Weissman, a former CPUC regulatory judge who is now a lecturer at UC Berkeley’s Goldman School of Public Policy.
He said the company’s failure to make its full commitment should raise a major red flag for regulators.
“The commission should be seeing what's going on there and why they don't have those funds set aside and what their plan B is, if they don't get their way in terms of spinning off their power plants.”
One reason the utility said it could not make the full payment at the end of this month was regulators had been slow to act on its plan to sell off a $3.5 billion stake in its dams and other power plants to raise needed cash.
The plan recently suffered a blow, however, when a CPUC regulatory law judge rejected it as “not in the public interest.” The judge said in a proposed decision – subject to review by the full utilities commission – that the details were vague and it posed the risk of higher rates.
Former CPUC president Loretta Lynch had worried about the idea of selling off a huge stake in the “crown jewel” of PG&E’s system, including the so-called “Stairway of Power” dams along the Feather River.
She questioned whether PG&E was in a true financial bind -- since the utility took in more than $2 billion in earnings last year and has been granted a recent string of rate increases.
“The idea that the shareholders, after reporting record profits, don't have the money to fulfill their legal obligations is laughable,” she said.
But PG&E told regulators that it had reinvested nearly all the profits back into its system.
The utility says it will respond to the judge’s rejection of its plan early next month – that’s when the commission is expected to consider whether to formally accept the judge’s findings.
