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NEWS RELEASE
May 10, 2002


CONTACT: Doug Heller - 310-392-0522 x309

Consumer Group Calls CPUC Bankruptcy Hearing A Sham

CPUC Operates Under "Alice in Wonderland" Rules
Read FTCR's comments regarding the CPUC bankruptcy hearing.

In papers filed with the California Public Utilities Commission (CPUC) today, the Foundation for Taxpayer and Consumer Rights denounced as a "sham" a hearing called by the CPUC on the PG&E bankruptcy plan it submitted to a federal bankruptcy judge. The PUC bankruptcy plan would require PG&E residential and small business customers to pay off the billions of dollars in debt the utility incurred during last year's phony energy crisis. FTCR said today's hearing was an effort to defeat a lawsuit brought by FTCR against the CPUC.

In its extraordinary lawsuit filed in the California Supreme Court on April 11, FTCR pointed out that Art. III, Section 3.5 of the California Constitution, the 1996 deregulation law and other statutes prohibit the CPUC from making secret deals with the utility companies to force ratepayers to cover the utilities' deregulation losses -- an estimated $10 billion. FTCR asked the Supreme Court to order the CPUC to obey all state laws, including those that require public hearings on all rate issues.

In response, the CPUC promised the Supreme Court that it would hold a public hearing on the plan, which had been developed in secret. The CPUC proceeded to file its plan with the bankruptcy court, then announced it would give the public an opportunity to comment. But just a few days later, CPUC lawyers told the bankruptcy judge that the CPUC would stand by the plan regardless of what happened at the hearing.

The sharply worded letter from FTCR attorney Michael Strumwasser called the hearing a "sham" and a "fool's errand," saying "the CPUC's conduct is a supreme act of contempt for the public that was left in the dark, the Legislature whose refusal to bail out the utilities the CPUC now presumes to overrule, and the courts whom the CPUC unconscionably seeks to mislead. FTCR refuses to play along in this charade."

"The CPUC is operating like the lunatic King in 'Alice in Wonderland,'" said Harvey Rosenfield, President of FTCR. "It's 'verdict first, then the trial.'"

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Read FTCR's comments regarding the CPUC bankruptcy hearing.



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