The bill allows a special-purpose entity to issue the "energy recovery bonds" to securitize some of the rates paid by the utility's customers. The bond plan was created at the insistence of a consumer group looking for a way to allow the utility to repay its debts while lessening the burden on ratepayers.

PG&E filed for Chapter 11 bankruptcy in 2001 after the state's electricity deregulation scheme went haywire. It emerged from bankruptcy in June.

As part of its regulatory action to approve the bankruptcy settlement, the California Public Utility Commission included language to clarify that the new energy recovery bonds do not have any impact on the more than $11 billion in bonds sold by the state's Department of Water Resources to pay for electricity purchased by the state during the energy crisis. Fees charged to ratepayers secure those bonds. Copyright 2004 Thomson Media Inc. All Rights Reserved. http://www.thomsonmedia.com http://www.bondbuyer.com @