Pacific Gas and Electric Co.’s bankruptcy won’t prevent San Francisco from pursuing its claims that the utility is holding up some local public projects and charging too much to deliver power to them, the judge in the bankruptcy case ruled yesterday, the San Francisco Chronicle reported. When a company files for bankruptcy, as PG&E did in January, lawsuits and other legal actions against the filer are generally suspended. But U.S. Bankruptcy Judge Dennis Montali said San Francisco can ask the Federal Energy Regulatory Commission to decide whether the utility is violating federal law in the conditions it requires for supplying electricity to a variety of local projects, including housing developments, parks and homeless shelters. “The stakes are high for the city,” Judge Montali said at yesterday’s hearing, and “if (PG&E)’s culpable, it’s going to have to pay the piper anyway.” But if the federal commission decides San Francisco is entitled to a refund, he said, the city will have to stand in line with other creditors in the bankruptcy proceedings. San Francisco buys much of its own electricity but relies on PG&E to supply customers over its transmission lines. City officials say the company has required the city to invest huge sums in infrastructure upgrades and has regularly refused to provide power at wholesale rates, instead charging premiums and insisting on unnecessary equipment.
