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Enron Mail |
The Hearings
The hearings have transitioned to the more traditional, courtroom-like environment, with lawyers engaged in detailed cross-examination of utility witnesses. The hearing focused solely on the utility claims of financial hardship. The hearings went from 9AM-5PM and only managed to make it through two PG&E witnesses--extensive, detailed questions on PG&E's cash management practices since restructuring started in 1998. Questions to witnesses focused in particular on PG&E's use of cash for investment and financing activities over the past 2-3 years (e.g., dividend/stock repurchase activities, transfer of cash from IOU to parent and parent's use of that cash for investment activities). Questions also focused on options other than rate increases available to the utility (e.g., liquidate certain assets of unregulated biz units, loans from parent, bankruptcy). The commissioners and the ALJ have reacted in extremely hostile manner toward PG&E's repeated attempts to amend and add to their proposal as the hearings progress. Questioning of PG&E witnesses will continue at 10 AM on Tuesday, followed by Edison witness. Unclear when the hearings will end, though the Commission is scheduled to issue its decision on Thursday. At this point, it seems very unlikely that the Commission will have developed the record necessary to do anything other than raise rates under its general ratemaking authority. Outside the Hearing Intense negotiations between Governor's office and utility management continue. Seems that the Commission/Administration is beating up on the utilities inside the hearing room in an attempt to soften the utilities up and gain some leverage in the negotiations taking place outside the hearing room. Governor continues to try to bring consumer groups into the negotiations with utilities, but consumer groups continue to resist and continue to oppose any rate increases. Governor seems to be attempting to set up a situation where the Commission absorbs the political heat for raising rates on the 4th, and the Governor follows-up with a more comprehensive set of proposals as part of his state of the state speech on the 8th.
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