California Utility to Restructure

The Federal Energy Regulatory Commission gave California utility Pacific Gas & Electric permission to restructure. The decision effectively insulates the bulk of Pacific Gas & Electric’s assets from credit problems.

As a part of the restructuring, Pacific Gas & Electric created the National Energy Group to act as its business arm. The National Energy Group will own power generating facilities and natural gas projects.

Creating the new company lessens the financial risk for Pacific Gas & Electric, giving the utility a company to act as a backer for new projects, such as the construction of power plants in California and Arizona.

Critics of Pacific Gas & Electric’s restructuring efforts say the reorganization puts the parent company's assets further out of reach of the utility's creditors.

However, Pacific Gas & Electric holds that even without the restructuring, its unregulated assets couldn't be tapped to cover its debts.

In response to consumer complaints of the restructuring, the California Public Utilities Commission has asked for an audit of the entire corporation's holdings.