Huge PeopleSoft deal on the cards...if the customer is allowed to emerge from bankruptcy

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PeopleSoft is on the brink of securing a massive contract from Pacific Gas & Electric to introduce a new multi-million dollar employee payroll and benefits system from PeopleSoft. But the roll-out is dependent on the courts allowing the utility to emerge from bankruptcy.

According to documents filed with the U.S. Bankruptcy Court in San Francisco, the utility intends to install a PeopleSoft HR system at three new energy companies it plans to set up to replace its current structure.

In the court filings, Pacific Gas & Electric admitted that its payroll and benefits system was based on outdated technology and breaking down "with increasing frequency." The filings also noted that "another consequence of the outdated HR/payroll system is the decreasing number of knowledgeable employees and other potential resources available to maintain the applications."

The new order would be an extension of PG&E Corp.'s existing software licence for about 4,000 more employees who would transfer to the new companies if the bankruptcy plan is approved. This would boost the number of PG&E workers using the HR software to about 8,000. Another 14,000 employees would remain on the utility's old payroll and benefits system.

Judge Dennis Montali has yet to approve 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. However he has approved PG&E spending about $2.2 million in consulting fees to PeopleSoft for seven to 12 months to work on the software.

But San Francisco and four California counties have come out as opposed to the spending on the grounds that “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". Pacific Gas & Electric's creditors will begin voting June 17 on the rescue plan with a result not known until early August.

Meanwhile PeopleSoft has officially confirmed it is ditching post-Enron scandal Arthur Andersen as its auditors in favour of rival KPMG LLP.

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