ML032541144
| ML032541144 | |
| Person / Time | |
|---|---|
| Site: | Diablo Canyon  |
| Issue date: | 09/04/2003 |
| From: | Laubach W Sacramento Municipal Utility District (SMUD) |
| To: | Office of Nuclear Reactor Regulation, US Federal Judiciary, Bankruptcy Court, Northern District of California |
| References | |
| 01-30923 | |
| Download: ML032541144 (17) | |
Text
1 UNITED STATES BANKRUPTCY COURT NORTHERN DiSTRICT OF CALIFORNIA 2 SA1 FRANCISCO DIVISION 3 § In re:
4 § PACIFIC GAS AND ELECTRIC § Case No. 01-30923 5 COMPANY. a Califomia : §
§ ( 1tmd1
- Corporation 5O 3,15 6 § Debtor § 7 4 8
Relief From Stav Cover Sheet 9
Instructions: Complete caption and Section A for all motions. Complete Section B for mobile homes, motor vehicles, and personal property.
10 Complete Section C for real property. Utilize Section C as necessary. If moving party is not a secured creditor, briefly sumnnarize dhe nature of 014 the motion in Section D. - - I g94 E. 11 (A) Date Petition Filed: April 19,2001 1ii Chapter:
Prior hearings on this obligation: N/A 12 (B) Descripdon of personal property collateral (e g 1983 Ford Taurus):
13 Secured Creditor 0 or )ssor D IC.- Fair Market Value: S Source of value:
14 Contract Balance S Pre-Petition Default S.
Monthly Payment: S No. of Months:
ine Insurance Advance: S_ Post-Petition Default 15 No of Months: ^
~0 16 (C) Description of real property collateral (e g Single family residence; Oakland, CA).
14 Fair Market value: S Source of value _ If appraisal. date_
~SZ 17 Moving Party's position (first trust deed, second, abstract, etc.)
C) 18 Approx. Bal.: - S- -Pre-Peition Default: S As of(date): No. of Months:
19 Monthly Payment: S Post-Petition Default:
Notice of Default (date) No of months:
a: Notice of Trustee's Sale Advances Senior Lines S 0 20 a: Specify name and status of other liens and encumbrances, if known (eBtrust deeds, tax liens, etc.)
21 Amount Monthly Payment Defaults Position 22 12Trust Deed S 2 Trust Deed T S
-23 S (Total) S S 24 (D) Other pertinent information:
SMUD is a potential plaintiff in an action against PG&E proposed to be filed before FERC, concerning alleged wrongful termination 25 of certain rights by PG&E.
26 Dated September 4,2003 W .
Signature
-)--6(4isa1 b& M Fiad 27 Wendy K. Laubach Pint or Type Name 28 Attorney for Sacramento Municipal Utility District muaaui fORIMILIEF 14011014 NtIKILLLILI' LUVLKflLLI COVERSHEE1 547S6j .DOC elby'w U) i
I I I 1 Wendy K. Laubach Diamond McCarthy Taylor Finley Bryant & Lee, L.L.P.
2 909 Fannin, Suite 1500 3 Houston, Texas 77010 Telephone: (713)333-5100 4 Facsimile: (713) 333-5195 5 Attorneys for Claimant Sacramento Mlunicipal Utility District 6 UNITED STATES BANKRUPTCY COURT 7 NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 8
In re: § Case No. 01-30923 9 § Pi
,o 10PACIFIC GAS AND ELECTRIC
§ MOTION AND NOTICE OF MOTION
§ OF SMUD FOR RELIEF FROM
> 11 I COMPANY, a California § AUTOMATIC STAY IN LITIGATION zx < 0Corporation §
< " ^12 § Date: September 26, 2003 s 13 Debtor. § Time:- 10:30 A. M.
>t § Place: 235 Pine Street, 22 nd Floor,
- 14 ; § San Francisco, CA
§ cc* U § Judge: Honorable Dennis Montali
<, 0 16 PLEASE TAKE NOTICE that on the date and time set forth above, or as soon thereafter E4
>. 17 as the matter may be heard, Sacramento Municipal Utility District ("SMUD') will urge this 142-z r < 18 motion for an order for relief from the automatic stay in the above-captioned bankruptcy case in
>g a 19 order to proceed with an action to be filed before the Federal Energy Regulatory Commission z 20 0
4 SH 21 (F'ERC'). SMUD's motion will be made pursuant to 11 U.S.C. §362(d)(1), 28 U.S.C. §§ 22 157(c)(1) and 1334 (c)(1), Federal Rules- of Bankruptcy Procedure, Rule 4001, and Local 23 Bankruptcy Rules, Rules 4001-1 and 9015-2(f), and on the grounds that cause exists for lifting the 24 automatic stay.
25 This motion is based on the accompanying Memorandum of Points and Authorities, 26 Declaration of Harvey L. Reiter, the pleadings, records and files herein, and such evidence, oral 27 and documentary, as may be produced at the hearing on this motion. The relief from stay sought 28 MOTION AND NOTICE OF MOTION oF MUD FOR RLEF FROM AUOMATIC STAY 54757 1.DW
1 by SMUD is necessary .t permit SMUD-to file an action before FERC to require PG&E to extend 2 the term of a 200 MW transmission contract by and between SMUD, PG&E, Southern California Edison Company ("SCE'), and San Diego Gas & Electric Company("SDGE".
4 In order to name PG&E as a defendant in the FERC action, SMUD must first seek relief 5
from stay in this case. However, SMUD does not seek monetary damages against PG&E's estate.
SMUD seeks only a determijiatioji omf its rights under applicable FERC guidelines to require l h . ; . I-8 PG&E to extend the term of the transmission contract.
9 SMUD believes that there is "cause" to lift the stay pursuant to 11 U.S.C. section
- r 362(d)(1). "Cause" exists to lift the stay because allowing SMUD to proceed before FERC 10 a promotes the congressional policy of allowing specialized energy proceedings to be conducted
~~ 12
>. 13 before the administrative agency that has been entrusted by Congress with this function. It would w 13 not serve the interests of judicial economy for the Bankruptcy Court to be required to immerse 0
b
= 14 15 itself in such specialized conflicts. Relief from the stay would result in little or no harm to PG&E iF FA 16 in sending this dispute, like many similar disputes that have arisen in this case to date, to FERC 7' 17 for disposition. i -
- -t~r 18 PLEASE TAKE FURTHER NOTICE that this motion is made pursuant to Local 19 Bankruptcy.Rule .4001-1. A preliminary, hearing on this motion will, be held on 04 20 21 September 26,2003, at 10:30 am. at 235 Pine Street, 22"d Floor, San Francisco, California.
22 Pursuant to Local Rule 4001-1(f), respondent.is not required to, but may, file objections to this motion. Any objections filed must-also be served on counsel for SMUD at the address listed at
- - 23 24 the top left-hand comer of this Notice.
25 , -
26 27 28 2
MOTION ANDNOTICE OFMOTION OFSMUD FOR RELIEF FROM AUtOMATIC STAY
1 WHEREFORE, SMUD requests that the Court enter its order granting relief from the stay 2 to permit SMUD to file an action before FERC to require PG&E to extend its transmission 3
contract with SMUD.
4 Date: September 4, 2003 DIAMOND McCARTHY TAYLOR FINLEY 5 BRYANT & LEE, L.L.P.
6 By- Ldi fjow¢ 7
Wendy K. Laubach 7 ,0,55,.,7 Attorney for SMUD A 'd 8
9 48 . 10
- q .4 11 12 E..
13 10 NX
.3 14 15 co 16 Eq2 17 18 19 00 20 21 22 23 24 25 26 27 28 3
MOTION AND NOTICE OF MOTION OF SMUD FOR RELIEF FROM AUTOMATIC STAY
I : - -PROOF OF SERVICE c.c.p. § 1011; §1013(a)(c)(e) 2 I, Wendy K. Laubach, declare that:
4 I am a citizen of the United States, and employed in the County of Harris, Texas. I am over the age of eighteen years and not a party to the within action. My business address is: 909 5 Fannin, Suite 1500, Houston, Texas 77010.
6 On September 4, 2003, served the following document(s);
MOTION AND NOTICE OF MOTION OF SMUD FOR RELIEF FROM 8 THE AUTOMATIC STAY IN LITIGATION 9 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF SMUDiS MOTION FOR RELIEF FROM STAY IN LITIGATION 10 DECLARATION OF HARVEY L. REITER IN SUPPORT OF SMUD'S Ox 11 MOTION FOR RELIEF FROM STAY IN LITIGATION x 12 (x) by placing a true copy thereof enclosed in a sealed envelope with postage fully prepaid in
- &ef 13 the United States mail at Houston, Texas, following ordinary business practices, addressed as shown below.
x 14
- 5)( causing a true copy thereof enclosed in a sealed envelope to be hand delivered.
i' 15 a 16 ( ) by causing a true copy thereof enclosed in a sealed envelope to be delivered by UPS or other over-night delivery service.
= -- 17
)
. _( by facsimile to the facsimile numbers below.
DE 18X xk Counsel for PG&E 10., 19 Howard, Rice, Nemerovski, Canady, Falk & Rabkin 20
< Attn: James L. Lopes, Esq.
Three Embarcadero Center, 7t Floor -
21 SanFrancisco,CA 94111 22 Cooley Godward LLP Attn: Stephen C. Neal, Esq.
One Maritime Plaza, 2Oh Floor 24 San Francisco, CA 94111 25 Counsel for PG&E -
Dewey Ballantine LLP.
26 Attn: Alan S. Gover Bank of America Center 27 700 Louisiana, Suite 1900 28 Houston, TX 77002-2725
-- 4 O. M4. AN O MOTION AND NOTICE OF MOTION OF SMVD FOR RELIEF FROM AUTIOMATIC STAY
1 Weil, Gotshal & Manges LLP 2 Attn: Michael P. Kessler, Esq.
3 767 Fifth Ave.
Office of the United States Trustee 5 Attn: Patricia Cutler, Esq.
250 Montgomery St., Suite 1000 6 San Francisco, CA 94104 7
Counsel for the Official Committee of Unsecured Creditors 8 Milbank, Tweed, Hadley & McCloy Attn: Paul Aronzon, Esq.
9
-O 601 South Figueroa St.
°10 Los Angeles, CA 90017 11
- < Counsel for the California Public Utilities Commission Paul, Weiss, Rifkind, Wharton & Garrison LLP 12 Attn: AlanW.Komberg 4<o_ 1285 Avenue of the Americas a "Ed 13 New York, New York 10019-6064 a o-
> x 14 On September 5th and/or 6th, 2003, I also served the following document(s);
15 MOTION AND NOTICE OF MOTION OF SMUD FOR RELIEF FROM 16 THE AUTOMATIC STAY IN LITIGATION
- . 17 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF Z 18 SMUD'S MOTION FOR RELIEF FROM STAY IN LITIGATION a - 19 DECLARATION OF HARVEY L. REITER IN SUPPORT OF SMUD'S x1 MOTION FOR RELIEF FROM STAY IN LITIGATION 4
H20 (x) by placing a true copy thereof enclosed in a sealed envelope with postage fully prepaid in 21 the United States mail at Houston, Texas, following ordinary business practices, 22 addressed as shown on the Special Notice List Dated July 24, 2003.
I declare under penalty of perjury that the foregoing is true and correct. Executed 23 September 4, 2003 at Houston, Texas.
24 25 26 -' -4 _
27 WendyK.Laubacb fyPbrj 28 - .fio 1 5
MOTION AND NOTICE OF MOTION OF SMUD FOR RELIEF FROM AUTOMATIC STAY
I Wendy K Laubach ' --
Diamond McCarthy Taylor Finley Bryant & Lee, L.L.P.
Two Houston Center 3- : 909 Fannin, Suite 1500 Houston, Texas 77010 4 Telephone: (713)333-5100 -
Facsimile: (713) 333-5195 -
5 Attorneys for Claimant Sacramento Municipal Utility District UNITED'STATES BANKRUPTCY COURT A. 8 NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 9
° 10 In re: § Case No. 01-30923
§ ii0 117 e _ 00 T .L** § MEMORANDUM OF POINTS
§ AND AUTHORITIES IN SUPPORT c> -12 § OF MOTION OF SMUD FOR PACIFIC GAS AND ELECRIC § RELIEF FROM AUTOMATIC STAY 13 COMPANY, a California § IN LITIGATION
'lo §ra
§ x 14 Corporation In 15 n t- - D= § Date: September 26,2003 o Debto§ . Time: 10:30 A.M.
> ,- 16 §. § .-
- ...Pine.. Street, 0 . - 235
.Place: 2 2nd Floor,,
'17 , ^ .§ San Francisco, CA
§ Judge: Honorable Dennis Montali 20 Sacramento Municipal Utility District ("SMtD") hereby submits this memorandum of c - 21 points and authorities in support f iIts motion for relief from the automatic stay re non-22 bankruptcy litigation. SMUD seeks relief from the stay to file a complaint against PG&E before 23 ...
24 the Federal Energy Regulatory Commission ('FERC") under Section 206 of the Federal Power Act. -The purpose of the complaint is to obtain an order of FERC directing PG&E to comply with 25 0
- -26 certain FERC guidelines assuring transmission customers the right to extend the term of existing
- 27 u mtansmission contracts, on certain conditions, in order to permit customers to continue taking 28 transmission service from their existing transmission providers.
MEMORANDUM OF POINTS AND AUTHORITIES 54758_2.DOC
i' 1 I. BACKGROUND 2 On August 1, 1967, SMUD entered into an agreement for 200 MW of firm physical 3 transmission capacity with the Debtor, Southern California Edison Company ("SCE"), and San Diego Gas & Electric Company ("SDGF'), entitled "Contract Between California Companies 5
and Sacramento Municipal Utility District for Extra High Voltage Transmission and Exchange 6
Service (as amended, the "Transmission Contract").' PG&E's chapter 11 plan calls for the 7
8 assumption of the Transmission Contract. The contract currently is set to expire in January 2005.
9 However, as set forth below, applicable FERC guidelines authorize SMUD to extend the 10 contract's term.
XC 11 Under FERC Order 888 ("Promoting Wholesale Competition Through Open Access Non-
~~ 12 Z^i= 13 Discriminatory TransmissionServices by Public Utilities'),
0 >> all firm transmission customers (requirements and transmission-only),
X 14 upon the expiration of their contracts or at the time their contracts become
, lb subject to renewal or rollover, should have the right to continue to take
° 15 transmission service from their existing transmission provider. 2
.3 9d
,<0~~- 16 16 The limitations are that X7 . 17 the underlying contract must have been for a term of one-year or more and
>Z < 18 the existing customer must agree to match the rate offered by another 19 potential customer, up to the transmission provider's maximum filed s0 a transmission rate at that time, and to accept a contract term at least as long
^20 as that offered by the potential customer.
21 The purpose of this right-of-first-refusal procedure is "to preserve the certainty and continuity of 22 transmission service."4 23 24
'Though all three companies entered into the Transmission Contract with SMUD, PG&E is the sole owner of the 25 capacity made available to SMUD under the contract.
2 FERC Stats. & Regs, Reg. Preambles, para. 31,036 at 31,665 (1996). affd in relevantpartsub nom. Transmission Access Policy Study Group v. FERC, 225 F.3d 667, 735 (D.C. Cir. 2000), aff'd. New York v. FERC, 122 S. Ct. 1012 27 (2002).
3 id.
28 4 Transmission Access Policy Study Group v. FEAC, 225 F.3d at 735.
2 MEMORANDUM OF POINTS AND AUTHORITIES 5475SS2.DOC
K -
1 - SMUD plainly qualifies for a term extension under Order No. 888. It is an existing 2 customer under a contrrct with a term -ofone year or m , and has offered to match the rate and 3: term offered by other potential customers. Nevertheless, PG&E has refused, asserting (1) that its 4
continued abilitv to provide service- is rendered uncertain by the expiration of contractual 5
6 arrangements with third parties that PG&E-believes are necessary to fulfill its contract with
- SMUJD, and (2)'that Order No. 888'A h~ht of first refusal mechanism is incompatible with the 8 open-access transmission system managed by the California Independent- System Operator ("Cal 9 ISO")'
4 ° 10 SMUD believes that these defenses have no merit.- There is no need, however, for the Bankruptcy Court to take up the merits of PG&E's' defenses. Instead, the dispute over whether 1H" 12 f13 PG&E's refusal violates'FERC Order No. 888 should be submitted to FERC for decision.
14S K K : SMUD would experiehce an undue hardship and risk if it were required to wait until
- k. LP0 °
- 15 PG&E emerged from bankruptcy . befbre=
. initiating the proposed FERC complaint. SMUD has
-T 16 attempted to resolve this issue with PG&E informally since early 2003, without success.
XZ 17 Although SMUD intends to request fast-track processing from FERC,' which may reasonably be
- 2 18expected to lead to a resolution within two to three months after filing, there can be no guarantee
.19 that FERC -will grant this request., 'If FERC declines to fast-track the complaint, resolution may 20 be delayed for a substantial additional period. SMUD needs to file its FERC complaint 21 22 immediately in order to permit sufficient -time, in the event of an unfavorable disposition, for 23 SMUD to make alternative arrangements for the 200 MW of capacity that will be lost when the 24 Transmission Contract expires. Prudent industry practice requires lead time of many months to
-25 arrageforaltemativesourcesof transmiissioircapacity on the scale involved-in this dispute.
26; E CAUSE EXISTS TO LIFT THE STAY TO ALLOW SMUI) TO FILE ITS ACTION 7;-, ,-
II.
27 BEFORE FERC 28 Section 362(d) of the Bankruptcy Code provides in relevant part that 3
MUM"ruNDUIVIOr MM IS AND ALI a HOR.111 IES 54758.2.DOC
1 [o]n request of a party in interest . . . the court shall grant relief from the stay ... such as by terminating, annulling, modifying, or conditioning such 2 stay- (1) for cause .
11 U.S.C. section 362(d)(1). The burden is on the debtor to show that there is no cause for relief.5 4
Because there is no clear definition of what constitutes "cause," relief from stay must be 5
determined on a case-by-case basis.6 Four factors are most applicable in the contest of 6
7 determining cause to lift the stay to allow litigation to proceed in another forum: "(1) the harm to 8 the party seeking relief from the stay if the stay is not lifted; (2) the harm to the debtor if the stay 9 is lifted; (3) the interests of creditors; and (4) the effect on the fair and efficient administration of
.30 10 justice." 7 All of these factors support SMUD's request for relief.
4 11 A. The Balance-of-Harm Analysis Favors SMUD.
E4.~ 12 X 1 In determining whether cause exists to grant relief from the stay, courts apply a balancing test, "finding 'cause' when the stay will harm the creditor and lifting the stay will not unjustly X= x14 x 1 harm the debtor or other creditors.' 4 In this case, the balance-of-harm test clearly favors SMUD's In
> > 16 request for relief. Regardless of whether the stay is lifted, PG&E is obligated to comply with all 17 applicable FERC regulations. The only issue is whether the dispute over what those regulations
.Z~
> Z 18 require will be resolved in this Court or before FERC. There will be no harm to PG&E in n oW 19 submitting its dispute with SMUD before FERC. FERC is in a unique position to provide an N 20 efficient resolution of the dispute over the Transmission Contract. FERC is a specialized tribunal 21 22 that handles Federal Power Act disputes of this sort as a matter of routine. In contrast, SMUD 23 5 II U.S.C. section 362(g); In re Ellis, 60 B.R. 432,435 (B.A.P. 9* Cir. 1985); In re Gavin, 24 B.R. 578, 580 (B.A.P.
24 9Cir. 1981).
6In re Tucson Estates, Inc., 912 F.2d 1162,1166 (9d Cir. 1990) (citing In re MacDonald, 755 F.2d 715-717 (9* Cir.
25 1985)); see aloIn re Conejo Enterprises,Inc., 96 F.3d346, 352 (9* Cir. 1996); In re Castlerock Properties,781 26 F.2d 159, 163 99gCir. 1986); In re Beguelin, 220 B.R. 94,98 (9* Cir. BAP 1998).
7 PeerlessInc. Co. v. Rivera, 208 B.R. 313,315 (D.R.I 1997) (citing Tucson Estates, 912 F.2d at 1166).
27 7In re Silverling, 179 B.R. 909, 911 (Bankr. E.D. Cal. 1995) (emphasis in original); see also In re C&S Grain Co.,
47 F.3d 233, 238 (7* Cir. 1995) ("In determining whether cause exists, the bankruptcy court should base its decision 28 on the hardships imposed on the parties with an eye towards the overall goals of the Bankruptcy Code.").
4 MEMORANDUM OF POINTS AND AUTHORMTIES 5475382.DOC
i will lose important rights of first refusal under FERC Order No. 888 if it is not permitted to seek a 2 timely resolution of.this dispute sufficiently in advance of the contract's currently scheduled expiration date.
.4 B. Lifting the Stay Will Have No Impact on Creditors.
5 5.The court in Peerless Inc. Co. v. Rivera9 found that the important issue for creditors was 6
not where a particular dispute'witi the debttorwasdecided, but what the outcome was. The court 8 also found that the interests of -he creditors would be best served by proceeding in the non-
- 9 bankruptcy forum, which would maximize the thances of settlement and minimize litigation 10 r costs.'0 Similarly, PG&E's creditors should be indifferent even to the resolution of the merits of
- dispute, let alone the forum. SMUD is not seeking monetary damages against PG&E's lthis
~~ 12 13 Zag *estate. If anything, creditors should support an extension of the Transmission Contract, because 9:S 13:: Ee 3, K 14 SMUD currently is paying below maximum tariff transmission prices and may have to increase I 0-
, W.
1 its rates-to posted tariff levels in ordr to obtain an extension.
0 N 16 ,H C. Relief from thie Stay W Promote
-uld me the Fair and Efficient Administration of
~~ ~16Co thS ud In Rlefr Justice. -
F7' 17 The Ninth Circuit recognizes that "[t]he the stay may be lifted as a matter of judicial 19
.e-1 economy."" In In re Universal Life Church, Inc., a California bankruptcy court acknowledged 00~
20
< that the interests ofjudicial economy were best served by permitting the IRS to proceed with a tax 21 claim before the specialized tax court, which was "likely to produce a more uniform and prompt 22 23-
-24 ' 208 B.R. 313, 315 (D.R.I. 1997).
--25 °'0 1d.at31-17. . - - .
"An re Beguelin, 220 B.I 94, 98 (96 Cir. BAP 198) (citing In re Westwood Broadcasrfg., 'Inc, 35 B.R. 47, 4849 26 D. Hawai,1983) (granting the plaintiffs' motion for relief rmn stay to allow them to proceed with litigation co.(Bankr.
- 27 in state court)); In re Kemble, 776 R2d 802, 806 (9 Cir. 1985) (lifling stay.for purposes of judicial economy to allow litigation to proceed in district court was not abuse of discretion); see also Conejo Enterprises,96 F.3d at 353
("Judicial economy and efficient administration of the estate [are] properly considered by the bankruptcy court" in 2: determining whether or not to grant relief from stay).
MEMORANDUM OF POINTS AND AUTHORIS 54755_).DOC
I resolution of the tax issue." 12 Similarly, in the present case, judicial economy will be best served 2 by sending this Federal Power Act dispute to FERC, which handles such specialized disputes as a 3
matter of routine.
4 The Second Circuit has explicitly acknowledged the relationship between the existence of 5
a specialized non-bankruptcy tribunal and the promotion of judicial economy. The Second 6
Circuit considers 12 factors when deciding whether or not to lift a stay in order that litigation may 7
8 continue to completion in another tribunal.13 Although "[n]ot every one of these factors will be 9 relevant in every case,"' 4 the fourth factor, "whether a specialized tribunal with the necessary
..10 10 expertise has been established to hear the cause of action," is instructive in the present case. Like 94 HiT 11 the "efficient administration of justice" factor in the Ninth Circuit, this factor militates in favor of
'42 ., 12
.4he ^ 13 sending specialized FERC disputes to FERC for efficient resolution.
~~ 13 0 x 14 III. CONCLUSION X 14
^ °
- 15 This Court should grant SMUD's motion for relief from the automatic stay. The Court 0 a
.,, z 16 has permitted other claimants to pursue their claims before specialized non-bankruptcy forums in a
- 17 this bankruptcy proceeding. In so doing, the Court has avoided being caught up in highly Hi Z 18 specialized energy-section proceedings that are most efficiently left to other regulatory bodies.
3oeg 19 The Court should follow its prior practice and rule in SMUD's favor.
14 20 21 12127 B.R. 453,454-55 (E.D. Cal. 1991) (citing H.R. No. 595, 95& Cong, I Sess. 343, 1977 U.S. Code Cong. &
22 Admin. News 5787, 6300, for the proposition that the need to pursue litigation in another tribunal may provide cause for relief from stay).
23 13 In re Bogdanovich, 292 F.3d 104 (2d Cir. 2002). The Second Circuit considers "(1) whether relief would result in a partial or complete resolution of the issues; (2) lack of any connection with or interference with the bankruptcy 24 case; (3) whether the other proceeding involves the debtor as a fiduciary, (4) whether a specialized tribunal with the necessary expertise has been established to hear the cause of action; (5) whether the debtoes insurer has assumed full 25 responsibility for a defense; (6) whether the action primarily involves third parties; (7) whether litigation in another forum would prejudice the interests of other creditors; (8) whether the judgment claim arising from the other action is 26 subject to equitable subordination; (9) whether the movants success in the other proceeding would result in a judicial lien avoidable by the debtor, (10) the interests of judicial economy and the expeditious and economical resolution of 27 litigation; (11) whether the parties are ready for trial in the other proceeding; and (12) the impact of the stay on the parties and the balance of harms." Id. at I10 nl.
28 14 Id.
MEMORANDUM OF POINTS AND AUTHORITIES 5475852.DOC
I Respectfully submitted, 2 Date: September 4, 2003 DIAMOND McCARTHY TAYLOR FNLEY BRYAkT & LEE, L.L.P.
3 4
-A!
- By -
5 Wendy K. Laubach Attorney for Claimant 6 Sacramento Municipal Utility District
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.27 28 7
7-MEMORANDUM OF POINTS AND AUTHORMIES 54758J2.DOC
I UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF CALIFORNIA 2 SAN FRANCISCO DIVISION 3
In re: § Case No. 01-30923 4 §
§ DECLARATION OF HARVEY 5 § REITER RE MOTION OF SUNID PACIFIC GAS AND ]ELECTRIC § FOR RELIEF FROM AUTOMATIC 6 COMPANY, a Califoimnia § STAY IN LITIGATION 7 Corporation .,, ~§
§ Date: September Aj, 2003 8 Debtor. § Time: 10: 30 A.M.
§ Place: 235 Pine Street, 22nd Floor, 9 § San Francisco, CA 10
§
§ Judge: Honorable Dennis Montali 11 S E-0%
12 I, Harvey L. Reiter, declare as follows:
4'-- 13
- 1. I am a partner in the Washington, D.C., office of the law firm of Stinson Morrison 0o 14 N ol 15 Hecker LLP. My areas of concentration include practice before the Federal Energy Regulatory E4z 16 Commission ("FERC").
lba 17 2. I represent Sacramento Municipal Utility District ("SMUD") in matters pertaining to 14 at~
18 SMUD's rights under an agreement for 200 MW of firm physical transmission capacity with 19 PG&E, Southern California Edison Company ("SCE"), and San Diego Gas & Electric Company 0
20 4 ("SDGE"), entitled "Contract Between California Companies and Sacramento Municipal Utility 21 22 District for Extra High Voltage Transmission and Exchange Service," dated August 1, 1967 (as 23 amended, the "Transmission Contract"). (Though all three companies entered into the 24 Transmission Contract with SMUD, PG&E is the sole owner of the capacity made available to 25 SMUD under the contract.)
26
- 3. PG&E's chapter 11 plan calls for the assumption of the Transmission Contract.
27 28 AFFIDAVIT RE SMUD MOTION FOR RELIEF C:\MY DOCUMENTS\SMUD MOTION FOR RELIEF AFFIDAVIT ON CALIFORNIA PAPERDOC
aor 1 4. The -Transmission Contract currently is set to expire in January 2005. I have prepared 2 a draft complaint to be filed by SMUD against PG&E before FERC under Section 206 of the Federal Power Act, in which SMUD seeks an order of FERC directing PG&E to extend the term 4
of the'contract.' As set forth in -SMUD's Memorandum of Points and Authorities in support of its 6 Motion for Relief from"Stay, applicable FERC; guidelines authorize SMUD to extend the contract's term. These FERC guidelines assure transmission customers the right to extend the 8 term of existing-transmission contracts, on certain conditions, in order to permit customers to A 9 continue taking transmission service from their existing transmission providers. The purpose of
-10 the FERC guidelines, including a right-of-first-refusal procedure, is to preserve the certainty and N.40 X4
> ._12continuity of transmission service.
SCo> ^ 12 5. SMUD plainly qualifies for a term extension under FERC guidelines. It is an existing
~~ 13
. 14 customer under a contract with a term bf one year or more, and has offered to match the rate and tn 15 term offered'by other potential customers. Nevertheless, PG&E has refused, asserting (1) that its FP~n-16 continued ability to provide service is' rendered uncertain by-the expiration of contractual
.02 17 arrangements with third parties that, PQ&E believes are necessary- to fulfill its contract with 18 fSMUD, and (2) 'that FERC's right~of-first-refusal mechanism is incompatible with the open-02 ~19*
Do access transmission system managed by~the California Independent System Operator ("Cal ISO").
20
- SMUD disagrees.' SMUD, has beeniattempting to resolve this issue with PG&E since at least 21 2early 2003, without success, 'and;now has no alternative to seeking an immediate resolution of this 23 dispute before FERC. --
a24 -6. -SMUD would experience' ah undue hardship and risk if it were required to wait until 25 PG&E emerged from bankruptcy before initiating the proposed FERC complaint. Although 26 WSMLD intends to request fast-track processing from FERC, which may reasonably be'expected to 27 28 lead to a resolution within two to three months after filing, there can be no guarantee that FERC 28~~~~~~~~~~~~~~
rR OIO NO R2 E-AFFIAVI RE SMU MOtO NFOR RELIEF
I will grant this request. If FERC declines to fast-track the complaint, resolution may be delayed 2 for a substantial additional period. SMUD needs to file its FERC complaint immediately in order 3 to permit sufficient time, in the event of an unfavorable disposition, for SMUD to make 4
alternative arrangements for the 200 MW of capacity that will be lost when the Transmission 5
6 Contract expires. Prudent industry practice requires lead time of many months to arrange for 7 alternative sources of transmission capacity on the scale involved in this dispute.
8 7. Regardless of whether the stay is lifted, PG&E is obligated to comply with all 9 applicable FERC regulations. The only issue is whether the dispute over what those regulations r 10 require will be resolved in this Court or before FERC. There will be no harm to PG&E in
,, T 12 submitting its dispute with SMUD before FERC. FERC is in a unique position to provide an
~~ 12 a -I 13 efficient resolution of the dispute over the Transmission Contract. FERC is a specialized tribunal 2 14 that handles Federal Power Act disputes of this sort as a matter of routine.
- ° 1 8. In contrast, SMUD will lose important rights of first refusal under FERC guidelines if 0
n 16 it is not permitted to seek a timely resolution of this dispute sufficiently in advance of the 4 17 contract's currently scheduled expiration date.
5 18 9. PG&E's creditors should be indifferent to the resolution of this dispute is resolved.
- $ > 19 0 o SMUD is not seeking monetary damages from PG&E's estate. If anything, creditors should N 20 21 support an extension of the Transmission Contract, because SMUD currently is paying below 22 maximum tariff transmission prices and may have to increase its rates to posted tariff levels in 23 order to obtain an extension.
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- ~~AMFDAVI RE SMUD MOTIO NFORt RLErLEF
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1 I declare under penalty of perury under the laws of the United States of America and the 2 State of California that the foregoing is true and correct. Executed this iday of August, 2003, 3 -
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Sworn to before me, a notary public, on this __ day of August, 2003.
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