ML032410274
| ML032410274 | |
| Person / Time | |
|---|---|
| Site: | Diablo Canyon  |
| Issue date: | 08/21/2003 |
| From: | Gordon B Howard, Rice, Nemerovski, Canady, Falk & Rabkin, Pacific Gas & Electric Co |
| To: | Office of Nuclear Reactor Regulation, US Federal Judiciary, Bankruptcy Court, Northern District of California |
| References | |
| 01-30923 D M, 94-0742640 | |
| Download: ML032410274 (6) | |
Text
HOMPOf WCE NEMERD~vSKI CANADY fif ABKJN 1
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10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 JAMES L. LOPES (No. 63678)
JANET A. NEXON (No. 104747)
BARBARA GORDON (No. 52424)
HOWARD, RICE, NEMEROVSKI, CANADY, FALK & RABKIN A Professional Corporation Three Embarcadero Center, 7th Floor San Francisco, California 94111-4024 Telephone:
415/434-1600 Facsimile:
415/217-5910 Attorneys for Debtor and Debtor in Possession PACIFIC GAS AND ELECTRIC COMPANY UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION In re PACIFIC GAS AND ELECTRIC COMPANY, a California corporation, Debtor.
Federal I.D. No. 94-0742640 Case No. 0 1-30923 DM Chapter 11 Case Date:
September 10, 2003 Time:
9:30 a.m.
Place:
235 Pine Street, 22nd Floor San Francisco, California Judge:
Hon. Dennis Montali
. 56-2776 3 -) 3 DEBTOR'S NOTICE OF MOTION AND MOTION FOR ORDER AUTHORIZING PAYMENT OF CERTAIN NON-ENERGY BILLING ADJUSTMENTS; SUPPORTING MEMORANDUM OF POINTS AND AUTHORITIES
[DECLARATION OF DAVID W. PHILLIPS IN SUPPORT HEREOF FILED SEPARATELY]
PLEASE TAKE NOTICE that on September 10, 2003 at 9:30 a.m., or as soon thereafter as the matter may be heard, in the Courtroom of the Honorable Dennis Montali, located at 235 Pine Street, 22nd Floor, San Francisco, California, Pacific Gas and Electric Company, the debtor and debtor in possession in the above-captioned Chapter 11 case
("PG&E" or the "Debtor"), will and hereby does move the Court (the "Motion") for entry of an order authorizing PG&E to pay certain pre-petition non-energy billing adjustments to MOT. TO PAY NON-ENERGY BILLING ADJUSTMENTS A
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HOWARD RICE NEMERY CANADY FALK
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9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 approximately 150 customers in accordance with PG&E's non-energy billing adjustment policies.
This Motion is made pursuant to Section 105(a) of the United States Bankruptcy Code (II U.S.C. § 105(a)), and is based on this Notice of Motion and Motion, accompanying Memorandum of Points and Authorities, the Declaration of David W. Phillips filed concurrently herewith (the "Phillips Declaration"), the record of this case and any evidence presented at or prior to the hearing on this Motion.
PLEASE TAKE FURTHER NOTICE that pursuant to Rule 9014-l(c)(2) of the Bankruptcy Local Rules for the Northern District of California, any written opposition to the Motion and the relief requested therein must be filed with the Bankruptcy Court and served upon appropriate parties (including counsel for PG&E, the Office of the United States Trustee and the Official Committee of Unsecured Creditors) at least five (5) days prior to the scheduled hearing date. If there is no timely objection to the requested relief, the Court may enter an order granting such relief without further hearing.
MOT. TO PAY NON-ENERGY BILLING ADJUSTMENTS 1
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15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES INTRODUCTION PG&E hereby moves this Court for an order authorizing PG&E to pay certain amounts currently owed and amounts that become due to customers as a result of pre-petition non-energy billing ("NEB") adjustments, in an aggregate amount of approximately
$2,250,000.
I.
FACTUAL BACKGROUND' PG&E performs construction and engineering work for its customers that is generally related to the overall provision of gas and electric service.2 For example, PG&E may relocate a PG&E-owned gas meter for the convenience of the customer, convert facilities for temporary services, or perform construction or engineering services related to distribution and transmission projects. Because of its expertise and specialized equipment, PG&E is often the first, if not the only, choice for this work.
Typically the customer requests that PG&E perform certain work. PG&E designs the job and provides a contract with a stated amount to be charged for the work. The contract is signed and the money is collected in advance of performance of the construction or engineering work. The funds are deposited into the non-energy billing system ("NEBS").
Certain such contracts were entered into prior to the filing of the Chapter 11 case and, as a result thereof, funds were deposited into NEBS. After the filing and during the Chapter case, certain customers cancelled or modified the construction projects or the engineering work resulting in a partial or total reduction of the contract cost. Since the work had been paid for in full pre-petition, the funds remain in NEBS. Prior to the Chapter 11 case, PG&E would in such situations make the appropriate adjustment to NEBS and pay the full or unused portion of the contract amount from NEB to the customer. The typical cancellation
'The evidentiary basis and support for the facts set forth in this Motion are contained in the Declaration of David W. Phillips filed concurrently herewith.
2Work related to main line extension contracts ("MLX") is not included in this Motion because it was the subject of this Court's orders dated April 2001 and March 25, 2002.
MOT. TO PAY NON-ENERGY BILLING ADJUSTMENTS I
or modification adjustment amount is estimated to be $10,000 or less.
2 A similar situation exists under "Actual Cost Contracts" entered into prior to the 3
Chapter 11 case for services generally related to transmission projects. Again, the customer 4
contacted PG&E to perform construction or engineering or design work relating to the 5
building of higher voltage projects. PG&E and the customer entered into an Actual Cost 6
Contract. PG&E then designed the job, billed the customer and funds were collected and 7
deposited into NEBS. The terms of the Actual Cost Contracts provide for a reconciliation at 8
the time of completion of the project between the actual cost of the project and the billed and 9
collected amount. Prior to the Chapter 11 case, in such situations, PG&E reconciled the 10 Actual Cost Contract amount with the actual project cost. When the adjustment was a credit 11 balance, the amount was paid to the customer. Since the filing of the Chapter 11 case, these 12 funds have been held in NEBS.
HOWRD 13 PG&E currently holds approximately 164 outstanding pre-petition credit McE CANADY 14 adjustments relating to such cancellations or modifications, totaling approximately $2.25 15 million. Of the 164 credit adjustments, 131 credits are under $10,000. Since substantially 16 higher amounts are involved in transmission projects, the cancellation or modification of 17 transmission projects result in significantly higher credit adjustments averaging 18 approximately $28,000. PG&E also estimates that a small percentage of additional NEB 19 credit adjustments for Actual Cost Contracts or cancellations or modifications as described 20 above are likely to accrue in NEBS during the remaining pendency of the Chapter 11 case.
21 22 II.
23 DISCUSSION 24 This Court Should Authorize Payment Of The Adjustments 25 Pursuant To Section 105(a) And The Court's Inherent Powers.
26 PG&E requests that this Court authorize the payment of certain adjustments 27 described above pursuant to Section 105(a) of the Bankruptcy Code and the Court's inherent 28 powers. Sections 105 authorizes this Court to "issue any order, process, or judgment that is MOT. TO PAY NON-ENERGY BILLING ADJUSTMENTS I
necessary or appropriate to carry out the provisions of this title." The purpose of 2
Section 105 is "to assure the bankruptcy court's power to take whatever action is appropriate 3
or necessary in aid of the exercise of their jurisdiction." 2 Collier on Bankruptcy, 1 05.01 at 4
105-06 (15th ed. Rev. 2000).
5 Although payment of pre-petition obligations prior to confirmation of a plan in a 6
Chapter 11 case is generally not allowed, Section 105(a) confers the power to authorize 7
payments irrespective of priorities where circumstances so warrant. See, e.g., Crafts 8
Precision Indus. Inc. v. U. S. Healthcare. Inc. (In re Crafts Precision Indus.. Inc.), 244 B.R.
9 178, 183 (B.A.P. 1st Cir. 2000) (affirming authorization of vacation payments "pursuant to 10
§ 105, irrespective of them being non-priority obligations"); In re Equalnet Communications 11 Corp., 258 B.R. 368, 369 n.2 (Bankr. S.D. Tex. 2000) (exceptions to general rule against 12 pre-confirmation payment of pre-petition claims "arise primarily out of common sense and HoamD 13 the presence of a legal or factual inevitability of payment"). For instance, pursuant to MCE NEMER0VIA C^NsAY 14 Section 105(a), courts have authorized immediate redemption of pre-petition retail coupons, 15 the honoring of credit card debits, credits or chargebacks by retail stores, and the issuance of 16 billing credits to retail customers in connection with pre-petition telephone services. See id.
1 7 at 369. Such claims are allowed to aid reorganization, prevent the loss of the Debtor's 18 customer base, and to prevent "potential harm to... 'silent' or unrepresented 19 constituencies" such as the individual customers affected by PG&E's non-energy billing 20 adjustment policies. Id. at 370 n.4.
21 The logic of these cases applies in the current context. The Debtor's continued 22 inability to pay may impose hardships on the Debtor's customers. The amount of money 23 that the Debtor requests to pay represents a very small percentage of the Debtor's total assets 24 and the average outstanding payment for the majority of the customers amounts to under 25
$10,000.
26 In addition, the affected customers were required to submit these payments in 27 connection with what has come to be recognized as a basic necessity in today's economy.
28 See Nunemaker v. P.T.&T. Co., Nos. 8735 & 8770, 1969 WL 18575 at *7,70 C.P.U.C. 38 MOT. TO PAY NON-ENERGY BILLING ADJUSTMENTS I
(Cal. C.P.U.C. Aug. 26, 1969) ("Water, gas, electric and telephone service have come to be 2
regarded largely as public necessities, and they may not be denied even to the impecunious 3
or to the financially irresponsible members of the public."). Customers needing PG&E's 4
engineering and construction services generally have little choice but to submit payment and 5
do so with the understanding that their services will be performed or, when cancelled or 6
modified, they will be treated fairly and with promptness. Customers with Actual Cost 7
Contracts are entitled to prompt payment of adjustments.
8 In sum, equitable considerations mitigate in favor of authorizing the Debtor to 9
pay adjustments consistent with PG&E's non-energy billing policies. The Debtor therefore 10 requests authority to pay all pre-petition customer non-energy billing adjustments held in 11 NEBS and as such further adjustments occur consistent with such policies.
12 D 13 III.
NEMO cNAm 14 CONCLUSION 15 For all of the foregoing reasons, PG&E respectfully requests that this Court make 16 and enter an order authorizing PG&E to pay pre-petition non-energy billing adjustments to 17 customers consistent with PG&E's non-energy adjustment policies.
18 DATED: August 21,2003.
19 HOWARD, RICE, NEMEROVSKI, CANADY, FALK & RABKIN 20 A Professional Corporation 21 22 B:BARBARA GORDO 23 Attorneys for Debtor and Debtor in Possession PACIFIC GAS AND ELECTRIC COMPANY 24 25 26 27 28 WD 071503/1-1419903/1089839/vl MOT. TO PAY NON-ENERGY BILLING ADJUSTMENTS