PG&E bankruptcy plan calls for PeopleSoft software

CIOL Bureau
New Update

Leonard Anderson


SAN FRANCISCO: According to documents filed with the US Bankruptcy Court in

San Francisco, the PG&E Corp. utility subsidiary has tapped PeopleSoft to

install a "human resources management" system at three new energy

companies it plans to set up. PG&E Corp.'s subsidiary National Energy Group

unit has been running PeopleSoft payroll software since 1997.

Whether the order is placed hinges on bankruptcy Judge Dennis Montali

approving the utility's plan to emerge from bankruptcy by forming the three

companies to take over its power generation, electric transmission and gas

transmission operations.

The utility itself, which would continue as a separate company, said it plans

to keep running a 30-year-old software system for the time being if Montali

approves the reorganization. But in the court filings, Pacific Gas &

Electric, California's biggest utility with 13 million customers, said its

payroll and benefits system was based on outdated technology and breaking down

"with increasing frequency."


PeopleSoft and other giant makers of business software like Oracle Corp. and

Siebel Systems Inc. have been struggling with a sharp drop in demand as

customers hold off on new spending for software that automates many corporate


While the PG&E utility has examined the costs of a new system, company

spokesman Ron Low told Reuters "we have determined that there is not a need

to replace the existing human resources-payroll program at this time." Low

declined to say whether Pacific Gas & Electric would buy PeopleSoft software

to replace its aging network.

"There have been improvements and upgrades made throughout the years (to

the existing software)," Low said. The software currently serves 33,000

employees and retirees and handles four labor contracts, among other business

tasks, according to court papers.


Software brain drain

The PG&E filings also noted that "another consequence of the
outdated HR/payroll system is the decreasing number of knowledgeable employees

and other potential resources available to maintain the applications."

PG&E and PeopleSoft said the new order was an extension of PG&E

Corp.'s existing software license for about 4,000 more employees who would

transfer to the new companies if the bankruptcy plan gets the judge's nod. This

would boost the number of PG&E workers using the "human resources

management" software to about 8,000, said Megan Clark, a spokeswoman for

PeopleSoft, based in Pleasanton, California.


Another 14,000 employees would remain on the utility's old payroll and

benefits system, Low said. Bankruptcy Judge Dennis Montali last week approved

PG&E spending about $2.2 million in consulting fees to PeopleSoft for seven

to 12 months to work on the software.

San Francisco and four California counties opposed the expenditure in court

"because it's presumptuous to be spending money to implement a plan that

hasn't been accepted by the creditors' committee or approved by the court,"

said Joanne Sakai, an attorney for San Francisco.

Pacific Gas & Electric's creditors will begin voting June 17 on the

utility's plan and a rival rescue proposal by the California Public Utilities

Commission, with balloting to end Aug. 12. Montali is expected to begin hearings

later this summer on which reorganization plan to confirm so the utility can get

out of bankruptcy.

Under PG&E's plan, the three new energy companies would transfer to

federal from state regulations, which California officials strongly oppose,

while the utility business would continue to operate under state regulation. The

regulatory commission's plan would keep the utility intact and under state


(C) Reuters Limited.