By the OGJ Online Staff
HOUSTON, Mar. 30�PG&E Corp. Friday said because of an accounting change, it may take a fourth-quarter aftertax charge of $4.1 billion to write off power purchase costs incurred by its Pacific Gas & Electric Co. utility unit.
The company also said it plans to request a 15-day delay to file its annual report, due Monday, to assess recent actions by California regulators to address the state's power crisis. Tuesday the California Public Utilities Commission awarded Pacific Gas & Electric and Southern California Edison Co. a 3�/kw-hr rate increase.
In a Friday conference call, Peter Darby, chief financial officer for PG&E Corp., said the company believes the PUC actions amount to an "unconstitutional taking" and it will challenge them in all appropriate forums, including requesting a temporary restraining order in court, if necessary.
He said the company has held no substantive negotiations with the governor's office concerning a global settlement for 2 weeks, but talks are expected to resume next week. Darby said the company understood Gov. Gray Davis and his staff want to complete a deal with Southern California Edison to buy out that company's transmission system and "then switch to us."
In its filing with the US Securities and Exchange Commission, PG&E said its utility unit had $8.9 billion in uncollected balances as of Feb. 28.
PG&E and its utility unit said if power costs rise above maximum retail rates, they may need to take additional charges, pushing common stockholders' equity ''potentially below zero.''
In addition, the utility expects to owe about $1.5 billion between now and Apr. 30. This includes $550 million to the California Independent System Operator, $470 million to gas suppliers, and $340 million to qualifying facilities (QF), small generators that sell electricity under contract to the utilities.
As of Mar. 29, Pacific Gas & Electric had $2.6 billion cash on hand, PG&E said. Had the utility made all its payments on time, its cash position would have been a negative $1.8 billion, the company said.
Darby said the company has secured an extension to Apr. 14 of a forbearance agreement with its banks.
