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Darwin E. Farrar (SBN 152735) 

Chief Counsel 

Public Advocates Office 

California Public Utilities Commission 

505 Van Ness Avenue 

San Francisco, California 94102 

Tel: 415-703-1599 

Email: darwin.farrar@cpuc.ca.gov

And 

Alisa C. Lacey (AZ 010571) (Pro Hac Vice) 

Thomas J. Salerno (AZ 007492) (Pro Hac Vice) 

Anthony P. Cali (AZ 028261) (Pro Hac Vice) 

Stinson LLP 

1850 N. Central Ave., #2100 

Phoenix, AZ 85004 

Tel: 602-279-1600 

Fax: 602-240-6925 

Email: alisa.lacey@stinson.com 

Email: thomas.salerno@stinson.com 

Email: anthony.cali@stinson.com 

Attorneys for the Public Advocates Office 

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

In re: 

PG&E Corporation 

 and 

Pacific Gas and Electric Company, 

 Debtors. 

Bankruptcy Case 

No. 19-30088 (DM) 

Chapter 11 

(Lead Case) 

(Jointly Administered) 

THE PUBLIC ADVOCATES OFFICE'S 

STATEMENT OF POSITION RE: 

JOINT MOTION OF THE OFFICIAL 

COMMITTEE OF TORT CLAIMANTS 

AND AD HOC COMMITTEE OF 

SENIOR UNSECURED 

NOTEHOLDERS TO TERMINATE 

THE DEBTORS' EXCLUSIVE 

PERIODS 

Case: 19-30088 Doc# 4052 Filed: 10/01/19 Entered: 10/01/19 15:51:55 Page 1 of

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□ Affects PG&E Corporation

□ Affects Pacific Gas and Electric 

Company 

■ All Debtors 

*All papers shall be filed in the Lead 

Case, 

No. 19-30088 (DM)

Hearing Date: October 7, 2019 

Hearing Time: 1:30 p.m. 

Place: Courtroom 17 

The Public Advocates Office at the California Public Utilities Commission (the 

“CPUC”) submits its statement of position with respect to the Joint Motion of the 

Official Committee of Tort Claimants and Ad Hoc Committee of Senior Unsecured 

Noteholders to Terminate the Debtors' Exclusive Periods Pursuant to Section 1121(d)(1) 

of the Bankruptcy Code ("the Motion") [DE 3940]. 

The Public Advocates Office agrees that the Court should terminate the Debtors' 

exclusive periods for filing and seeking acceptances of a plan of reorganization. This 

should not be interpreted as an endorsement of any plan or term sheet. Rather, the Public 

Advocates Office believes that the Debtors’ First Amended Joint Chapter 11 Plan of 

Reorganization [DE 3966] (the “Plan”), does not comply with Public Utilities Code 

Section 3292 (added by AB 1054 [Holden, Stats. of 2019]). Terminating exclusivity at 

this time would serve all constituencies as competition will foster judicial economy, 

ensure adequate compensation to victims and creditors, protection of ratepayer interests, 

and compliance with state law, including AB 1054. 

The Debtors' proposed Plan provides no evidence or guarantee of ratepayer 

neutrality or ratepayer compensation. These are mandatory prerequisites for the 

Reorganized Debtors’ participation in California’s new Wildfire Fund, per California 

Public Utilities Code, Section 3292. This section of state law conditions the Reorganized 

Debtors’ participation in the Wildfire Fund on the CPUC's findings that the Plan is 

“neutral, on average, to the ratepayers” and that it “recognize[s] the contributions of 

ratepayers, if any, and compensate[s] them accordingly through mechanisms approved 

by the commission, which may include sharing of value appreciation.” 

Case: 19-30088 Doc# 4052 Filed: 10/01/19 Entered: 10/01/19 15:51:55 Page 2 of

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The Public Advocates Office’s concerns include, but are not limited to, the 

following: 

• Future Rate Increases: The Plan contains no language precluding the 

Reorganized Debtors from seeking further cost recovery from ratepayers 

after the Effective Date of the Plan, including future cost recovery 

applications for liabilities that the Plan contemplates resolving through its 

proposed Wildfire Trust payments. State law generally permits an electrical 

utility to seek cost recovery for wildfire-related costs and expenses that were 

prudently incurred. The Debtors contend that they are not liable for at least 

one of the fires (the Tubbs Fire) that has given rise to a significant portion of 

the wildfire-related claims against the Debtors, and the CPUC has not ruled 

on the prudence of the Debtors’ actions with respect to all other fires. The 

extent of the Debtors’ aggregate Tubbs Fire liability is uncertain, pending the 

conclusion of the Tubbs Fire trial, and may prove significant, by comparison 

with the size of the proposed Wildfire Trust for non-subrogation claims. 

Absent prohibitive language in the Plan, any payments for Tubbs Fire claims 

that are not ultimately contained within the proposed Wildfire Trusts may 

cause the Reorganized Debtors to seek rate increases through a cost recovery 

application before the CPUC. Conversely, if the Tubbs Fire claims are 

ultimately included within the Wildfire Trust, the Reorganized Debtors may 

nonetheless file a future cost recovery application with the CPUC, following 

any CPUC finding of prudence. Absent language in the Plan prohibiting 

these actions, the Plan violates the ratepayer neutrality requirement of AB 

1054. See, Cal. P.U.C. § 3292(b)(1)(D)(ii). 

• Fines and Penalties: The Plan proposes to channel wildfire-related fines

and penalties into the “Other Wildfire Trust” [See Plan at p. 28]. The Plan 

does not provide for the means for Debtors' compliance with non-wildfirerelated financial remedies that the CPUC may impose during the pendency of 

the Chapter 11 cases as may result from open investigations into the Debtors’ 

Case: 19-30088 Doc# 4052 Filed: 10/01/19 Entered: 10/01/19 15:51:55 Page 3 of

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ex parte and locate-and-mark practices. The Plan also does not provide for 

compliance with other equitable remedies that the CPUC or other regulatory 

bodies may impose in the interest of public safety and welfare. Any 

attempted abrogation of remedies imposed by state agencies to implement 

their police and regulatory powers violates the ratepayer neutrality 

requirement, and the statutory provision that conditions the Reorganized 

Debtors’ participation in the Wildfire Fund upon a CPUC determination that 

the Plan is “acceptable in light of the electrical corporation’s safety history, 

criminal probation, [etc.]” required by Cal. P.U.C. § 3292(b)(1)(C). 1

 

• Customer Deposits and Advances: The Plan contains no language 

describing the treatment and disposition of $278 million in ratepayer funds 

categorized as Customer Deposits and Advances. The Debtors have indicated 

in their quarterly reports to the Securities and Exchange Commission that 

these ratepayer funds are included within the “Liabilities Subject to 

Compromise” in the Chapter 11 cases [See: Debtors’ Quarterly Report (10-

Q) for the quarter ended June 30, 2019, at p. 24]. At the same time, PG&E 

has filed testimony before the CPUC stating that, “out of an abundance of 

caution to protect customers whose deposits are held by PG&E from 

becoming creditors,” it currently “manages its daily cash balances to 

maintain a minimum cash balance equal to its CDs” [See A.18-12-009, Ex. 

PG&E-24, Chapter 14A, page 4, lines 6-14]. The inconsistency of these 

statements, and the silence of the Plan on the matter, raises the prospect that 

the Plan may not fully provide for all Customer Deposits, Customer 

Advances, and associated interest. A plan that fails to recognize and preserve 

 

1

 Such a provision also violates the State of California's and the CPUC's sovereign 

immunity. Under 11 U.S.C. § 106, there is no permitted abrogation of the ability to 

regulate public health and safety concerns through the proposal of a Chapter 11 Plan. 

Section 1123 is not among the sections listed in Section 106(a). Neither is Section 1129. 

The Public Advocates Office expressly reserves this objection and all other potential 

objections. 

Case: 19-30088 Doc# 4052 Filed: 10/01/19 Entered: 10/01/19 15:51:55 Page 4 of

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such rights also violates the ratepayer neutrality requirement in Section 

3292(b)(1)(D)(ii). 

If a plan does not meet the state statutory requirements to participate in the 

Wildfire Fund under AB 1054, and the Code provisions which implement it, any such 

plan is not feasible, and will not meet the requirements for confirmation under 11 U.S.C. 

§ 1129. (Among other issues barring confirmation, such a plan cannot be approved by 

the CPUC as required by 11 U.S.C. § 1129(a)(6).) The Debtors' proposed Plan currently 

fails to meet the requirements of AB 1054 and, therefore, is not confirmable. 

The Public Advocates Office, therefore, respectfully asserts that the Court should 

terminate exclusivity. 

Dated: October 1, 2019. 

PUBLIC ADVOCATES OFFICE 

By: 

Darwin E. Farrar (SBN 152735) 

Chief Counsel, Public Advocates Office 

California Public Utilities Commission 

505 Van Ness Avenue 

San Francisco, California 94102 

Tel: 415-703-1599 

Email: darwin.farrar@cpuc.ca.gov; 

 And 

STINSON LLP 

/s/ Alisa C. Lacey 

Alisa C. Lacey 

Thomas J. Salerno 

Anthony P. Cali 

1850 N. Central Ave., #2100 

Phoenix, AZ 85004 

Tel: 602-279-1600 

Fax: 602-240-6925 

Email: alisa.lacey@stinson.com 

Email: thomas.salerno@stinson.com 

Email: anthony.cali@stinson.com 

Attorneys for the Public Advocates Office

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