pg & e plan of reorganization all :
attached is a csfb synopsis of pg & e ' s plan of reorganization ( por ) . the key to successful consummation of the por is being able to move pg & e ' s retained generating assets ( primarily diablo canyon nuclear and the hydro ) from cpuc jurisdiction to ferc jurisdiction , under a disaggregation of the assets ( genco , disco , electransco & gastransco ) . the current cost of service generation rate at cpuc for these assets is approximately 2 . 8 cents per kwh . the por envisions a ppa between genco and disco at approximately 4 . 5 cents per kwh . the ferc would use a concept of benchmarking in approving this rate . benchmarking is a market rate comparison .
while the por contemplates no rate increase from the existing average generation rate of 9 . 4 cents per kwh , with the now lower cdwr revenue requirement , the cpuc could possibly reduce rates in the interim . this could give the cpuc cover in alleging that the por is a rate increase . the critical legal point in the por is preemption in the bankruptcy court . under this doctrine , federal law can preempt state law , as part of the por . judge montali will have to approve this move . while pg & e envisions por consummation by 12 / 31 / 02 , given the precedent setting nature of this move and what will surely be an adverse cpuc attitude , the process could drag on longer as it is fully adjudicated through the appeals process .
on our claims , the por at consumation would pay 60 cents cash and 40 cents in reconstituted notes designed to trade at par . interest would be paid from por confirmation to consummation . our $ 403 million in px credits claims are listed as contested . the challenges listed are based on : 1 ) the rate freeze having ended and 2 ) the effect of ferc price mitigation on the px clearing price .
regards ,
michael