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CA ENERGY CRISIS UPDATE May 2, 2001 ENERGY CRISIS UPDATECPUC SEEKS TO RETAIN CONTROL OVER PG&E The California Public Utilities Commission urged a federal bankruptcy judge on April 30 not to sever the commission's regulatory control of PG&E. PG&E has petitioned the Bankruptcy Court to block parts of a recent CPUC order that would have the effect of extending PG&E's rate freeze. The CPUC called PG&E's petition "the first step in (the company's) plan to deregulate itself." The CPUC said PG&E's petition should be dismissed on the grounds of "sovereign immunity-the state's right not to be sued by private parties-and because the nation's bankruptcy laws bar interference with the state's exercise of its regulatory powers. 'WINDFALL PROFITS TAX' BILL ADVANCES IN LEGISLATURE The Senate Appropriations Committee on April 30 approved a "windfall profits tax" on energy companies who make profits that are deemed unreasonable. The bill would force generators to give the state any money collected above a reasonable limit determined by the CPUC. The bill is aimed principally at five out-of-state companies-AES Corp., Due Energy Corp., Dynegy Inc., Mirant and Reliant-that bought California power plants under deregulation and saw profits increase last year at an average of 508%, according to some estimates. The bill's sponsor, state Sen. Nell Soto, has suggested a cap of 8 cents a kilowatt-hour, meaning that any price charged above that would be considered unreasonable.
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