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>From Jim Seymour on RealMoney.com
"That said, my big worry is a little-known corner of the 1978 bankruptcy law providing that utilities in bankruptcy proceedings can, if they do not have assurance they will get paid, stop delivering power.
My guess is the power generators that provide PG&E's electricity will, now that PG&E is subject to the bankruptcy code, try to turn this part of the law to their advantage, claiming that they are utilities, and that they can now stop delivering electricity to PG&E, no matter what the governor, public utility commission or legislature says."
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>From Chris Edmonds, also on RealMoney.com
"The action by Pacific Gas & Electric returns a federal lawsuit to the forefront of the crisis.
In the lawsuit, both PG&E and Edison are asking a federal court to require the CPUC to retroactively raise California retail power rates. The lawsuit sites a longstanding federal precedent, the "filed rate doctrine," that should allow the utilities to pass wholesale power costs through to retail customers. In a February comment, Merrill Lynch utilities analyst Steve Fleishman indicated that the claim is tenable. "They have a very strong case. There is a general expectation that the utilities likely will win this case."
Indeed, while neither side will admit as much, Gov. Davis' insistence that the suit be dropped as part of a political solution has likely been the stumbling block to reaching a solution with PG&E. "Why give up on something you are likely to win?" says a source close to the negotiations. "Davis' demand it be dropped suggests he is worried about the outcome."