<PAGE>
As filed with the Securities and Exchange Commission on March 7, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 33-50601
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Savings Fund Plan for Employees of
Pacific Gas and Electric Company
B. Name of issuer of the securities held pursuant to the Plan and the
address of its principal executive office:
PG&E Corporation
77 Beale Street
P.O. Box 77000
San Francisco, CA 94177
<PAGE>
REQUIRED INFORMATION
1. The financial statements of the Savings Fund Plan Master Trust and the
Savings Fund Plan Parts I and II as of December 31, 1996 and 1995, the
statements of net assets as of December 31, 1996 and 1995, the statements of
changes in the net assets of the Plans for the year ended December 31, 1996 and
the Savings Fund Plan Master Trust schedule of assets held for investment
purposes as of December 31, 1996 and the schedule of reportable transactions for
the year ended December 31, 1996, together with the reports of Arthur Andersen
LLP, independent accountants, are contained in Exhibit 1 to this Annual Report.
2. Consent of Arthur Andersen LLP, independent accountants, is contained
in Exhibit 2 to this Annual Report.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
SAVINGS FUND PLAN FOR EMPLOYEES OF
PACIFIC GAS AND ELECTRIC COMPANY
Date: March 7, 1997 By: G. BRENT STANLEY
------------------------------
G. Brent Stanley
Chairman, Employee Benefit
Administrative Committee
2
<PAGE>
EXHIBIT 1
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN MASTER TRUST
FINANCIAL STATEMENTS
TABLE OF CONTENTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statements of Net Assets - December 31, 1996 and 1995
Statements of Changes in Net Assets for the Year Ended December 31,
1996
Notes to Financial Statements - December 31, 1996
SCHEDULES
Schedule I: Line 27(a) - Schedule of Assets Held for Investment
Purposes - December 31, 1996
Schedule II: Line 27(d) - Schedule of Reportable Transactions for
the Year Ended December 31,1996
<PAGE>
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Employee Benefit Finance Committee
of Pacific Gas and Electric Company and
Participants in the Savings Fund Plans:
We have audited the accompanying statements of net assets of Pacific Gas and
Electric Company Savings Fund Plan Master Trust (the Trust) as of December 31,
1996 and 1995, and the related statement of changes in net assets for the year
ended December 31, 1996. These financial statements and the schedules referred
to below are the responsibility of the Trust's management. Our responsibility is
to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
The accompanying statements are those of the Trust established under the Pacific
Gas and Electric Company Savings Fund Plan Master Trust. These statements do not
purport to present the financial statements of the individual employee benefit
plans and do not contain disclosures necessary for a fair presentation of the
financial statements of the individual employee benefit plans in conformity with
generally accepted accounting principles. Furthermore, these statements do not
purport to satisfy the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974 relating to financial statements of employee benefit plans. Reference
should be made to the Form 5500s and related financial statements of the
individual employee benefit plans that have been prepared and filed pursuant to
these reporting rules and regulations.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets of the Trust as of December 31, 1996 and
1995, and the changes in net assets for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes as of December 31, 1996, and reportable transactions for
the year ended December 31, 1996, are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The fund information in the statements of net assets and
changes in net assets is presented for the purpose of additional analysis rather
than to present the net assets and changes in net assets of each fund. The
supplemental schedules and fund information have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
Arthur Andersen LLP
San Francisco, California
February 26, 1997
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN MASTER TRUST
STATEMENT OF NET ASSETS
December 31, 1996
<TABLE>
<CAPTION>
Fund Information
---------------------------------------------------------------------------------
United
Company States Diversified Guaranteed Bond Stock and Utility
Stock Bond Equity Income Index Bond Stock
Fund Fund Fund Fund Fund Fund Fund Total
------ ------ ----------- --------- ------ -------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(in thousands)
ASSETS
Investments, at fair value
Pacific Gas and Electric Company - $ 830,689 $ - $ - $ - $ - $ - $ - $ 830,689
United States government securities - 4,542 1,193 - - - - 5,735
Corporate stocks - common - - 740,165 - - - - 740,165
Corporate debt instruments - - - 35,582 - - - 35,582
Insurance company general accounts - - - 224,294 - - - 224,294
Registered investment companies
Vanguard Bond Index Fund - - - - 28,369 - - 28,369
Columbia Balanced Fund - - - - - 151,074 - 151,074
Mellon Bank Utility Stock Fund - - - - - - 40,436 40,436
Interest bearing accounts 24,230 - 22,926 11,603 - - - 58,759
--------- ------ --------- ------------ ------- -------- ------- ----------
Total Investments 854,919 4,542 764,284 271,479 28,369 151,074 40,436 2,115,103
--------- ------ --------- ------------ ------- -------- ------- ----------
Receivables
Dividends and interest 11,939 - 1,445 1,376 159 - - 14,919
Other receivables - - 537 - - - - 537
--------- ------ --------- -------- ------- -------- ------- ----------
Total Receivables 11,939 - 1,982 1,376 159 - - 15,456
--------- ------ --------- -------- ------- -------- ------- ----------
Total Assets 866,858 4,542 766,266 272,855 28,528 151,074 40,436 2,130,559
--------- ------ --------- -------- ------- -------- ------- ----------
LIABILITIES 1,505 - 420 - - - - 1,925
--------- ------ --------- -------- ------- -------- ------- ----------
NET ASSETS $ 865,353 $4,542 $ 765,846 $272,855 $28,528 $151,074 $40,436 $2,128,634
========= ====== ========= ======== ======= ======== ======= ==========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
statements.
1
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN MASTER TRUST
STATEMENT OF NET ASSETS
December 31, 1995
<TABLE>
<CAPTION>
Fund Information
-----------------------------------------------------------------------
United
Company States Diversified Guaranteed
Stock Bond Equity Income
Fund Fund Fund Fund
---- ------ ---------- ----------
<S> <C> <C> <C> <C>
(in thousands)
ASSETS
Investments, at fair value
Pacific Gas and Electric Company - common stock $ 1,161,205 $ - $ - $ -
United States government securities - 4,424 1,042 -
Corporate stocks - common - - 503,528 -
Corporate debt instruments - - - 63,540
Insurance company general accounts - - - 146,976
Registered investment companies
Vanguard Bond Index Fund - - - -
Columbia Balanced Fund - - - -
Mellon Bank Utility Stock Fund - - - -
Interest bearing accounts 25,082 - 20,205 10,297
------------ ----------- ------------- -----------
Total Investments 1,186,287 4,424 524,775 220,813
------------ ----------- ------------- -----------
Receivables
Dividends and interest 20,369 - 1,137 1,051
Other receivables 3,354 - 22 8
------------ ----------- ------------- -----------
Total Receivables 23,723 - 1,159 1,059
------------ ----------- ------------- -----------
Total Assets 1,210,010 4,424 525,934 221,872
------------ ----------- ------------- -----------
LIABILITIES - - - -
------------ ----------- ------------- -----------
NET ASSETS $ 1,210,010 $ 4,424 $ 525,934 $ 221,872
============ =========== ============= ===========
<CAPTION>
Fund Information
-----------------------------------------------------------------------
Bond Stock and Utility
Index Bond Stock
Fund Fund Fund Total
----- --------- -------- -----
<S> <C> <C> <C> <C>
(in thousands)
ASSETS
Investments, at fair value
Pacific Gas and Electric Company - common stock $ $ $ $ 1,161,205
United States government securities 5,466
Corporate stocks - common 503,528
Corporate debt instruments 63,540
Insurance company general accounts 146,976
Registered investment companies
Vanguard Bond Index Fund 26,394 26,394
Columbia Balanced Fund 127,992 127,992
Mellon Bank Utility Stock Fund 49,284 49,284
Interest bearing accounts 55,584
------------ ----------- ------------ -------------
Total Investments 26,394 127,992 49,284 2,139,969
------------ ----------- ------------ -------------
Receivables
Dividends and interest 141 - - 22,698
Other receivables - - - 3,384
------------ ----------- ------------- -------------
Total Receivables 141 - 0 26,082
------------- ----------- ------------- -------------
Total Assets 26,535 127,992 49,284 2,166,051
------------- ----------- ------------- -------------
LIABILITIES - - - -
------------ ----------- ------------- -------------
NET ASSETS $ 26,535 $ 127,992 $ 49,284 $ 2,166,051
============ =========== ============= =============
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
statements.
2
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN MASTER TRUST
STATEMENT OF CHANGES IN NET ASSETS
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
Fund Information
-----------------------------------------------------------------------------------
United
Company States Diversified Guaranteed
Stock Bond Equity Income
Fund Fund Fund Fund
--------------- --------------- ------------- ------------------
<S> <C> <C> <C> <C>
(in thousands)
BALANCE, JANUARY 1, 1996 $1,210,010 $4,424 $525,934 $221,872
--------------- --------------- ------------- ------------------
ADDITIONS
Participating plans contributions
Participant 42,515 - 32,914 5,342
Employer 14,955 - 11,102 1,843
-------------- --------------- ------------- -----------------
Total participating plans contributions 57,470 - 44,016 7,185
-------------- --------------- ------------- -----------------
Earnings from investments
Interest
Interest bearing accounts 1,220 - 1,134 481
United States government securities 189 -
Fixed income investments - 13,263
-------------- --------------- ------------- -----------------
Total interest 1,220 189 1,134 13,744
Dividends - common stock 71,285 - 13,764 -
Registered investment company
dividends - - -
Other income 251 - 9 -
-------------- --------------- ------------- -----------------
Total earnings
from investments 72,756 189 14,907 13,744
-------------- --------------- ------------- -----------------
Net appreciation (depreciation) in fair value
of assets held (298,733) - 123,788 -
-------------- --------------- ------------- -----------------
Total additions (reductions) (168,507) 189 182,711 20,929
-------------- --------------- ------------- -----------------
<CAPTION>
Fund Information
-------------------------------------------------------------------------------
Bond Stock and Utility
Index Bond Stock
Fund Fund Fund Total
------------ --------------- ------------- ----------------
<S> <C> <C> <C> <C>
(in thousands)
BALANCE, JANUARY 1, 1996 $26,535 $127,992 $49,284 $2,166,051
------------ --------------- ------------- ----------------
ADDITIONS
Participating plans contributions
Participant 1,255 7,365 2,856 92,247
Employer 449 2,512 890 31,751
------------ --------------- ------------- ----------------
Total participating plans contributions 1,704 9,877 3,746 123,998
------------ --------------- ------------- ----------------
Earnings from investments
Interest
Interest bearing accounts - - - 2,835
United States government securities - - - 189
Fixed income investments - - - 13,263
------------ --------------- ------------- ----------------
Total interest - - - 16,287
Dividends - common stock - - - 85,049
Registered investment company
dividends 1,790 - 2,492 4,282
Other income - - - 260
------------ --------------- ------------- ----------------
Total earnings
from investments 1,790 - 2,492 105,878
------------ --------------- ------------- ----------------
Net appreciation (depreciation) in fair value
of assets held (798) 16,161 (2,379) (161,961)
------------ --------------- ------------- ----------------
Total additions (reductions) 2,696 26,038 3,859 67,915
------------ --------------- ------------- ----------------
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
statements.
3
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN MASTER TRUST
STATEMENT OF CHANGES IN NET ASSETS (Continued)
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
Fund Information
----------------------------------------------------------------------
United
Company States Diversified Guaranteed
Stock Bond Equity Income
Fund Fund Fund Fund
------- ------- ----------- ----------
<S> <C> <C> <C> <C>
(in thousands)
DEDUCTIONS
Withdrawals paid to participating plans
for benefit payments $ 47,575 $ 71 $ 26,763 $ 22,550
---------- ----------- ---------- -----------
Total deductions 47,575 71 26,763 22,550
---------- ----------- ---------- -----------
TRANSFERS between investment funds (128,575) - 83,964 52,604
---------- ----------- ---------- -----------
CHANGE IN NET ASSETS (344,657) 118 239,912 50,983
---------- ----------- ---------- -----------
BALANCE, DECEMBER 31, 1996 $ 865,353 $ 4,542 $ 765,846 $ 272,855
========== =========== ========== ===========
<CAPTION>
Fund Information
----------------------------------------------------------------------
Bond Stock and Utility
Index Bond Stock
Fund Fund Fund Total
----------- ------------ ---------- -----------------
<S> <C> <C> <C> <C>
(in thousands)
DEDUCTIONS
Withdrawals paid to participating plans
for benefit payments $ 1,043 $ 4,884 $ 2,446 $ 105,332
---------- ----------- ----------- ------------
Total deductions 1,043 4,884 2,446 105,332
---------- ----------- ----------- ------------
TRANSFERS between investment funds 340 1,928 (10,261) -
---------- ----------- ----------- ------------
CHANGE IN NET ASSETS 1,993 23,082 (8,848) ($37,417)
---------- ----------- ----------- ------------
BALANCE, DECEMBER 31, 1996 $ 28,528 $ 151,074 $ 40,436 $ 2,128,634
========== =========== =========== ============
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
statements.
4
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN MASTER TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 1: Master Trust Description
Pacific Gas and Electric Company (the Company) established the Savings
Fund Plan Master Trust (the Master Trust) on January 1, 1988 to hold the assets
of the Company Savings Fund Plans. The Pacific Service Employees Association
also participates in the Master Trust. The Master Trust is administered by
the Company's Employee Benefit Administrative Committee and Employee Benefit
Finance Committee, and State Street Bank and Trust Company is the trustee (the
Trustee).
Interest income, dividends, investment management fees, where
appropriate, and the net appreciation or depreciation in the fair value of
investments held by the Master Trust are allocated to the individual
participating plans each day based upon their proportional share of the fund
balances.
Although the Company has not expressed any intent to do so, its Board
of Directors reserves the right to amend or terminate the Master Trust at any
time by giving written notice to the Trustee. If the Master Trust is terminated,
the Master Trust assets shall be paid out to each separate participating plan in
proportion to its interest in the Master Trust.
NOTE 2: Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Master Trust are prepared in
conformity with generally accepted accounting principles. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions. These estimates and
assumptions affect the reported amounts of additions, deductions, assets, and
liabilities and disclosure of contingencies. Actual results could differ from
these estimates. These financial statements do not purport to present the net
assets available for benefits or the change in net assets available for benefits
of any of the individual participating retirement plans and do not include all
disclosures necessary for a fair presentation of the financial statements of the
individual participating plans in conformity with generally accepted accounting
principles.
NOTE 3: Federal Income Taxes
The Company received a favorable tax determination letter from the
Internal Revenue Service (IRS) in November of 1995, and the IRS has ruled that
the Master Trust is exempt under Section 501(a). Accordingly, no provision for
federal income taxes has been made in the financial statements. The Plan sponsor
believes that the Master Trust continues to be designed and operated in
accordance with IRS requirements.
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN MASTER TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 4: Investments
The Trustee invests a significant portion of the contributions from
the participating plans in the common stock of the Company. The Company pays
all costs of administering the Master Trust, including fees and expenses of the
Trustee and investment management fees for the Diversified Equity Fund and the
Guaranteed Income Fund.
Individual plan participants designate the way in which their
contributions are invested and may change their investment designation at any
time. Participants may elect to have their contributions invested in one or
more of the following funds:
- Company Stock Fund, invested in Pacific Gas and Electric
Company common stock;
- Diversified Equity Fund (DEF), invested in a diversified
portfolio of common stock of other companies;
- Guaranteed Income Fund (GIF), invested in contracts which offer
a fixed rate of interest for a specified period of time;
- Bond Index Fund (BIF), invested in Vanguard Bond Index Fund, a
diversified portfolio consisting of marketable fixed-income
securities;
- Stock and Bond Fund (SBF), invested in a Columbia Balanced
Fund, a diversified portfolio of marketable equity securities
and marketable fixed-income securities.
- Utility Stock Fund (USF), invested in Mellon Bank Utility Stock
Fund, a portfolio of marketable equity securities of electric
utility companies that are members of the Edison Electric
Institute, including Pacific Gas and Electric Company.
The United States Bond Fund was closed to new contributions on July 1,
1991.
A participant's interest in the investment funds is represented by
participation units allocated on the basis of contributions and assigned a unit
value on the basis of the total value of each fund. For investments in the
United States Savings Bond Fund, a unit is one bond.
Valuation of Investments
All investments (other than GIF) held by the Master Trust are stated
at fair value based on published market quotations. Investments in the GIF are
valued at cost which approximates fair value.
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN MASTER TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 4: Investments (Continued)
The net depreciation in fair value of investments in the accompanying
statement of changes in net assets reflects the net difference between fair
value and cost of investments bought during the year and the net difference
between the beginning of the year fair value and the fair value of the assets
held, sold or distributed.
Financial Investments with Off-Balance Sheet Risk
The Employee Benefit Finance Committee has adopted a "Position
Statement on Risk Management and the Use of Derivatives" which applies to the
Master Trust. This statement recognizes that derivatives may be used by the
Master Trust's investment managers to achieve their investment objectives.
However, the Master Trust assets will not be exposed to risks through
derivatives that would be inappropriate in their absence.
J.P. Morgan routinely enters into Standard and Poor's (S&P) 500 Index
futures contracts for hedging purposes. J.P. Morgan, the investment manager for
the DEF, uses S&P 500 index futures contracts to maintain unleveraged stock
market exposure while providing the liquidity necessary to accommodate
participant cashflows. A margin position is taken on these contracts on a daily
basis, with a resulting appreciation or depreciation in the fair value of assets
held. As of December 31, 1996, there were 63 S&P 500 index futures
contracts valued at approximately $23 million, with a settlement date of March
20, 1997. The net depreciation recorded as of December 31, 1996 on these
contracts was approximately $131,000. The collateral (included in interest
bearing
accounts) with respect to these contracts consisted of a $1,300,000 US T-bill
which will mature on February 13, 1997.
NOTE 5: Subsequent Event
Effective January 1, 1997, the Company became a subsidiary of its new
parent holding company, PG&E Corporation. The Company's ownership interest in
Pacific Gas Transmission Company (PGT) and PG&E Enterprises (Enterprises) was
transferred to PG&E Corporation. The Company's outstanding common stock was
converted on a share-for-share basis into PG&E Corporation common stock. All
stock held by the Company Stock Fund is now PG&E Corporation common stock.
<PAGE>
SAVINGS FUND PLAN
FOR EMPLOYEES OF PACIFIC GAS AND ELECTRIC COMPANY
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
US SAVINGS BONDS
NAME OF ISSUER AND DESCRIPTION HELD AT CLOSE OF PERIOD COST CURRENT VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS)
COMPANY STOCK FUND
*PACIFIC GAS AND ELECTRIC COMPANY COMMON STOCK 39,556,596 $878,189 $830,689
INTEREST BEARING ACCOUNTS
*STATE STREET BANK + TRUST CO
SHORT TERM INVESTMENT FUND 24,227,647 24,230 24,230
----------- ----------- -----------
TOTAL COMMON STOCK FUND 63,784,243 $902,419 $854,919
============== ============= =============
UNITED STATES BOND FUND
UNITED STATES SAVINGS BONDS, SERIES E 5,340 $ 100 $ 404
(UNITS OF $18.75 COST AND $25.00 MATURITY)
UNITED STATES SAVINGS BONDS, SERIES EE 80,032 2,001 3,500
(UNITS OF $25.00 COST AND $50.00 MATURITY)
UNITED STATES SAVINGS BONDS SERIES EE 9,108 455 638
(UNITS OF $50.00 COST AND $100.00 MATURITY)
----------- ----------- -----------
TOTAL UNITED STATES BOND FUND 94,480 $ 2,556 $ 4,542
============== ============= =============
DIVERSIFIED EQUITY FUND
ABBOTT LABS 30,300 $ 1,142 $ 1,538
ADVANTA CORP 3,600 158 147
AETNA INC 29,700 1,939 2,376
AHMANSON H F AND CO 18,300 335 595
AIR PRODS + CHEMS INC 20,900 1,126 1,445
AIRTOUCH COMMUNICATIONS INC 107,200 3,057 2,707
ALBEMARLE CORP 10,500 144 190
ALBERTSONS INC 53,700 1,907 1,913
ALCAN ALUM LTD 47,700 1,412 1,604
</TABLE>
<PAGE>
SAVINGS FUND PLAN
FOR EMPLOYEES OF PACIFIC GAS AND ELECTRIC COMPANY
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
US SAVINGS BONDS
NAME OF ISSUER AND DESCRIPTION HELD AT CLOSE OF PERIOD COST CURRENT VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ALLEGHENY POWER SYSTEMS INC 18,200 462 553
ALLEGHENY TELDYNE INC 46,700 883 1,074
ALLIED SIGNAL INC 91,600 3,186 6,137
ALTERA CORP 8,300 394 603
ALUMINUM CO AMER 53,000 1,778 3,379
ALZA CORP 62,900 1,822 1,628
AMBAC INC 4,000 167 266
AMERICAN EXPRESS CO 39,300 2,094 2,220
AMERICAN GEN CORP 48,400 1,591 1,978
AMERICAN HOME PRODUCTS CORP 108,300 3,973 6,349
AMERICAN INTL GROUP INC 27,300 1,565 2,955
AMERICAN WTR WKS INC 11,600 234 239
AMERITECH CORP 85,800 4,492 5,202
AMOCO CORP 28,600 1,905 2,302
AMR CORP DEL 15,100 994 1,331
ANADARKO PETE CORP 10,900 465 706
ANHEUSER BUSCH COS INC 103,000 2,852 4,120
ANIXTER INTL INC 10,200 191 164
APPLIED MATERIALS INC 30,700 939 1,103
APRIA HEALTHCARE GROUP INC 46,400 1,100 870
ASHLAND INC 12,100 439 531
ASSOCIATES FIRST CAP CORP 300 14 13
AT + T CORP 250,200 9,282 10,884
ATLANTIC RICHFIELD CO 9,100 968 1,206
AUTODESK INCORPORATED 8,100 289 227
AUTOZONE INC 32,100 984 883
AVON PRODS INC 28,500 973 1,628
BALTIMORE GAS + ELEC CO 22,300 521 597
BANC ONE CORP 74,900 2,281 3,221
BANCORP HAWAII INC 6,200 221 260
BANK OF BOSTON CORP 25,400 995 1,632
BANKAMERICA CORP 61,900 3,189 6,174
BARD C R INC 3,400 110 95
BARNES + NOBLE INC 8,300 267 224
BARNETT BKS INC 33,200 1,041 1,365
BAUSCH + LOMB INC 39,700 1,488 1,389
BAY NETWORKS INC 32,900 890 687
</TABLE>
<PAGE>
SAVINGS FUND PLAN
FOR EMPLOYEES OF PACIFIC GAS AND ELECTRIC COMPANY
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
US SAVINGS BONDS
NAME OF ISSUER AND DESCRIPTION HELD AT CLOSE OF PERIOD COST CURRENT VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BEAR STEARNS COS INC 19,100 373 532
BELL ATLANTIC CORP 67,900 3,776 4,396
BELLSOUTH CORP 55,800 1,931 2,253
BENEFICIAL CORP 9,200 483 583
BETHLEHAM STL CORP 26,800 326 241
BLACK + DECKER CORPORATION 47,200 854 1,422
BOATMENS BANCSHARES INC 25,800 1,443 1,664
BOEING CO 84,700 4,528 9,010
BOISE CASCADE CORP 14,500 474 460
BORDERS GROUP INC 9,600 290 344
BOWATER INC 11,800 533 444
BOYD GAMING CORP 6,900 113 57
BRISTOL MYERS SQUIBB CO 91,600 8,648 9,961
BROWNING FERRIS INDS INC 104,300 3,089 2,738
BURLINGTON NORTHN SANTA FE 25,000 1,735 2,159
CALIBER SYS INC 5,900 221 113
CARNIVAL CORP 48,400 1,134 1,597
CATERPILLAR INC 48,900 1,386 3,680
CENTRAL FID BKS INC 9,000 206 232
CHAMPION INTL CORP 28,700 1,407 1,241
CHARTER ONE FINL INC 7,400 243 311
CHASE MANHATTAN CORP NEW 15,600 801 1,392
CHEVRON CORP 106,200 4,549 6,903
CHUBB CORP 40,900 1,840 2,198
CIGNA CORP 17,900 1,782 2,445
CINCINNATI MILACRON INC 9,000 231 197
CINERGY CORP 24,500 825 818
CIRCUIT CITY STORES INC 26,000 673 783
CIRCUS CIRCUS ENTERPRISES INC 21,200 724 729
CISCO SYS INC 108,900 6,140 6,929
CITICORP 79,100 3,802 8,147
COCA COLA CO 246,200 6,311 12,956
COLGATE PALMOLIVE CO 31,000 2,125 2,860
COLTEC INDS INC 10,900 218 206
COLUMBIA / HCA HEALTHCARE CORP 178,900 5,298 7,290
COLUMBIA GAS SYS INC 15,900 766 1,012
COMCAST CORP 66,500 1,113 1,184
</TABLE>
<PAGE>
SAVINGS FUND PLAN
FOR EMPLOYEES OF PACIFIC GAS AND ELECTRIC COMPANY
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
US SAVINGS BONDS
NAME OF ISSUER AND DESCRIPTION HELD AT CLOSE OF PERIOD COST CURRENT VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMPAQ COMPUTER CORP 50,900 1,810 3,779
COMPUTER ASSOC INTL INC 61,300 3,640 3,050
CONSOLIDATED EDISON CO NY INC 36,400 1,028 1,065
CONSOLIDATED FREIGHTWAYS CORP 3,000 21 27
CONSOLIDATED FREIGHTWAYS INC 6,100 135 136
CONSOLIDATED NAT GAS CO 13,600 752 751
CONTIFINANCIAL CORP 7,300 213 264
COOPER CAMERON CORP 8,781 171 672
COOPER INDS INC 24,400 1,047 1,028
COOPER TIRE + RUBR CO 13,900 345 274
CORESTATES FINL CORP 38,300 1,324 1,987
COX COMMUNICATIONS INC NEW 11,000 260 254
CPC INTL INC 34,100 1,653 2,643
CREDIT ACCEPTANCE CORP 7,600 199 179
CRESTAR FINL CORP 6,900 399 513
CROMPTON + KNOWLES CORP 16,400 288 316
CROWN CORK + SEAL INC 24,100 946 1,310
CSX CORP 32,900 1,333 1,390
CUMMINS ENGINE INC 9,100 390 419
CYTEC INDS INC 9,300 245 378
DANA CORP 3,900 120 127
DAYTON HUDSON CORP 46,200 1,469 1,813
DEAN WITTER DISCOVER + CO 28,200 1,149 1,868
DELTA AIR LINES INC DE 7,900 550 560
DIME BANCORP INC NEW 18,300 221 270
DISNEY WALT CO 137,800 6,371 9,594
DOMINION RES INC VA 27,700 1,040 1,067
DONNELLEY R R + SONS CO 33,500 960 1,051
DOW CHEM CO 48,700 3,133 3,817
DTE ENERGY CO 22,400 777 725
DU PONT E I DE NEMOURS + CO 112,900 6,509 10,655
DURACELL INTL INC 6,600 405 461
E M C CORP MASS 41,200 866 1,365
EATON CORP 17,600 826 1,228
ECOLAB INC 12,900 422 485
EDISON INTL 70,300 1,368 1,397
EDWARDS A G INC 9,900 254 333
</TABLE>
<PAGE>
SAVINGS FUND PLAN
FOR EMPLOYEES OF PACIFIC GAS AND ELECTRIC COMPANY
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
US SAVINGS BONDS
NAME OF ISSUER AND DESCRIPTION HELD AT CLOSE OF PERIOD COST CURRENT VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
EL PASO NAT GAS CO 7,671 279 387
EMERSON ELEC CO 28,600 2,134 2,767
ENRON CORP 59,600 1,909 2,570
ENTERGY CORP 20,800 638 577
ETHYL CORP 22,100 223 213
EXIDE CORP 6,700 303 154
EXTENDED STAY AMER INC 14,100 214 284
EXXON CORP 195,100 14,014 19,120
FEDERAL EXPRESS CORP 17,000 568 756
FEDERAL HOME LN MTG CORP 30,700 2,385 3,381
FEDERAL NATL MTG ASSN 186,700 3,808 6,954
FEDERATED DEPT STORES INC DEL 46,100 1,487 1,573
FINOVA GROUP INC 4,300 219 276
FIRST CHICAGO NBD CORP 54,400 1,740 2,924
FIRST DATA CORP 86,400 3,350 3,154
FIRST EMPIRE ST CORP 1,200 314 346
FIRST TENN NATL CORP 11,500 308 431
FIRST UN CORP 48,000 2,185 3,552
FIRST USA INC 19,800 412 686
FIRST VA BKS INC 5,100 204 244
FIRSTAR CORP NEW 12,900 489 677
FLEET FINL GROUP INC 45,100 1,412 2,249
FOOTSTAR INC 8,500 168 211
FORD MTR CO DEL 215,200 5,894 6,860
FOREST LABS INC 40,300 1,696 1,320
FOSTER WHEELER CORP 8,600 306 319
FPL GROUP INC 29,100 996 1,339
FRONTIER CORP 25,500 697 577
FRUIT OF THE LOOM INC 23,200 681 879
GENERAL DYNAMICS CORP 11,400 451 804
GENERAL ELEC CO 175,500 8,454 17,353
GENERAL INSTRUMENT CORP 22,800 659 493
GENERAL MLS INC 30,900 1,758 1,958
GENERAL MTRS CORP 137,500 6,051 7,666
GENERAL MTRS CORP 67,900 2,918 3,819
GENERAL NUTRITION COS INC 20,600 358 348
GENERAL RE CORP 14,600 2,328 2,303
</TABLE>
<PAGE>
SAVINGS FUND PLAN
FOR EMPLOYEES OF PACIFIC GAS AND ELECTRIC COMPANY
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
US SAVINGS BONDS
NAME OF ISSUER AND DESCRIPTION HELD AT CLOSE OF PERIOD COST CURRENT VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GEORGIA GULF CORP 6,400 201 172
GEORGIA PAC CORP 1,500 111 108
GILLETTE CO 1,600 102 124
GLOBAL MARINE INC 31,700 545 654
GOLDEN WEST FINL CORP DEL 9,400 473 593
GOODYEAR TIRE AND RUBBER 26,600 1,100 1,366
GPU INC 19,000 548 639
GRAINGER W W INC 11,500 669 923
GRAND CASINOS INC 7,500 178 101
GREAT WESTN FINL CORP 23,000 404 667
GREENPOINT FINL CORP 8,200 229 388
GTE CORP 153,000 5,590 6,962
HARRAHS ENTMT INC 20,800 602 413
HARRIS CORP DEL 7,400 414 508
HEALTH MGMT ASSOC 43,000 667 967
HEINZ H J CO 73,500 2,440 2,628
HEWLETT PACKARD CO 182,400 3,685 9,166
HILTON HOTELS CORP 28,800 768 752
HOME DEPOT INC 5,600 287 281
HOUSEHOLD INTL INC 8,100 744 747
HOUSTON INDS INC 100 2 2
HUMANA INC 100,400 2,066 1,920
HUNTINGTON BANCSHARES INC 23,500 521 620
ILLINOVA CORP 11,400 293 313
IMC GLOBAL INC 18,600 730 728
INCO LTD 27,200 890 867
INGERSOLL RAND CO 24,300 896 1,081
INLAND STL INDS INC 12,900 325 258
INPUT/OUTPUT INC 7,400 255 137
INTEL CORP 137,100 8,652 17,951
INTERNATIONAL BUSINESS MACHS 95,400 5,909 14,405
INTERNATIONAL FLAVOURS 23,500 1,110 1,057
INTERNATIONAL GAME TECHNOLOGY 29,200 603 533
ITT CORP NEW 24,100 1,341 1,045
ITT HARTFORD GROUP INC 32,800 0 2,214
ITT INDS INC 57,300 2,702 1,404
JOHNSON + JOHNSON 101,800 3,177 5,064
</TABLE>
<PAGE>
SAVINGS FUND PLAN
FOR EMPLOYEES OF PACIFIC GAS AND ELECTRIC COMPANY
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
US SAVINGS BONDS
NAME OF ISSUER AND DESCRIPTION HELD AT CLOSE OF PERIOD COST CURRENT VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
JOHNSON CTLS INC 31,600 1,955 2,619
JONES APPAREL GROUP INC 15,400 374 575
KANSAS CITY PWR + LT CO 4,700 127 134
KELLOGG CO 44,600 3,326 2,927
KIMBERLY CLARK CORP 6,800 578 648
KU ENERGY CORP 900 27 27
LEAR CORP 11,500 360 392
LEHMAN BROTHERS HLDGS INC 16,400 367 514
LILLY ELI + CO 18,500 783 1,350
LIMITED INC 58,900 1,142 1,082
LINCOLN NATL CORP IN 24,400 1,077 1,281
LOCKHEED MARTIN CORP 30,300 1,037 2,772
LOUISIANA PAC CORP 32,700 780 691
LOWES COS INC 11,400 438 405
LUCENT TECHNOLOGIES INC 100,800 4,574 4,662
LYONDELL PETROCHEMICAL CO 14,900 389 328
MANOR CARE INC 25,700 499 694
MATTEL INC 80,400 2,051 2,231
MAYTAG CORP 17,500 344 346
MBIA INC 10,000 712 1,012
MCDONALDS CORP 63,700 2,661 2,882
MCDONNELL DOUGLAS CORP 34,200 1,014 2,189
MCI COMMUNICATIONS CORP 107,600 2,322 3,517
MEAD CORP 19,800 1,058 1,151
MERCANTILE BANCORPORATION INC 9,800 484 504
MERCANTILE BANKSHARES CORP 8,200 216 262
MERCK + CO INC 109,400 5,529 8,670
MERCURY FIN CO 30,500 405 374
MERCURY GEN CORP NEW 5,300 246 278
MERRILL LYNCH + CO INC 28,000 1,709 2,282
MFS COMMUNICATIONS INC 63,200 3,213 3,444
MGM GRAND INC 11,100 417 387
MICROSOFT CORP 107,200 4,074 8,857
MINNESOTA MNG + MFG CO 6,400 498 530
MIRAGE RESORTS INC 37,100 674 802
MOBIL CORP 66,300 6,724 8,105
MODINE MFG CO 7,000 211 187
</TABLE>
<PAGE>
SAVINGS FUND PLAN
FOR EMPLOYEES OF PACIFIC GAS AND ELECTRIC COMPANY
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
US SAVINGS BONDS
NAME OF ISSUER AND DESCRIPTION HELD AT CLOSE OF PERIOD COST CURRENT VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MOLEX INC 9,400 278 335
MONEY STORE INC 9,900 285 274
MONSANTO CO 3,200 133 124
MORGAN STANLEY GROUP INC 25,500 1,294 1,457
MOTOROLA INC 75,400 3,838 4,628
NABISCO HLDGS CORP 12,900 391 502
NATIONAL SEMICONDUCTOR CORP 25,900 548 631
NATIONAL SVC INDS INC 11,000 384 411
NATIONSBANK CORP 50,800 2,720 4,966
NEW ENGLAND ELEC SYS 10,200 346 356
NEWPORT NEWS SHIPBUILDING INC 13,700 212 206
NINE WEST GROUP INC 9,900 400 459
NORDSTROM INC 18,000 824 638
NORFOLK SOUTHN CORP 12,700 1,115 1,111
NORTHEAST UTILS 19,200 311 254
NORTHERN STS PWR CO MN 12,500 594 573
NORTHERN TRUST CORP 18,700 637 678
NORTHROP GRUMMAN CORP 1,000 57 83
NUCOR CORP 23,200 1,294 1,183
NYNEX CORP 67,700 3,183 3,258
OHIO CAS CORP 7,900 265 281
OLD KENT FINL CORP 7,600 337 363
ORACLE SYS CORP 124,500 1,951 5,198
OWENS CORNING 17,200 583 733
P P + L RES INC 24,000 556 552
PACCAR INC 8,800 448 598
PACIFIC TELESIS GROUP 28,300 857 1,040
PAGING NETWORK INC 18,100 359 276
PAINE WEBBER GROUP INC 14,500 301 408
PANENERGY CORP 61,000 1,974 2,745
PARKER HANNIFIN CORP 15,700 574 608
PENNEY J C INC 63,100 2,935 3,076
PEPSICO INC 300,900 6,171 8,801
PERKIN ELMER CORP 28,800 1,546 1,697
PFIZER INC 120,300 6,036 9,970
PHELPS DODGE CORP 17,200 830 1,161
PHILIP MORRIS COS INC 142,300 10,889 16,027
</TABLE>
<PAGE>
SAVINGS FUND PLAN
FOR EMPLOYEES OF PACIFIC GAS AND ELECTRIC COMPANY
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
US SAVINGS BONDS
NAME OF ISSUER AND DESCRIPTION HELD AT CLOSE OF PERIOD COST CURRENT VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PHILLIPS PETE CO 47,800 1,498 2,115
PINNACLE WEST CAP CORP 13,200 301 419
PIONEER HI BRED INTL INC 16,600 1,196 1,162
PMI GROUP INC 8,200 362 454
PNC BK CORP 58,600 1,288 2,205
POGO PRODUCING CO 6,900 241 326
PORTLAND GEN CORP 29,000 1,051 1,218
POTOMAC ELEC PWR CO 18,400 461 474
PRAXAIR INC 3,600 140 166
PRICE COSTCO INC 37,700 690 947
PROCTER + GAMBLE CO 125,300 5,700 13,470
PROVIDIAN CORP 21,900 808 1,125
QUANTUM CORP 12,000 213 344
RALSTON PURINA CO 23,500 1,197 1,724
RAYTHEON CO 21,400 691 1,030
READ RITE CORP 8,000 176 202
REGIONS FINL CORP 10,200 438 527
REPUBLIC NY CORP 9,500 496 775
REYNOLDS METALS CO 16,300 801 919
ROHM + HAAS CO 13,100 810 1,069
ROYAL DUTCH PETE CO 91,300 7,830 15,590
RUBBERMAID INC 49,400 1,183 1,124
RYDER SYS INC 12,400 325 349
SAFECO CORP 25,000 767 986
SALOMON INC 18,100 735 853
SARA LEE CORP 99,500 2,941 3,705
SBC COMMUNICATIONS INC 76,300 3,595 3,949
SCHERING PLOUGH CORP 42,100 2,841 2,726
SCHLUMBERGER LTD 23,700 2,359 2,367
SCIENTIFIC ATLANTA INC 13,200 218 198
SEAGRAM LTD 26,300 864 1,019
SEARS ROEBUCK + CO 87,100 4,394 4,018
SENSORMATIC ELECTRS CORP 13,600 288 228
SERVICE CORP INTL 47,600 594 1,333
SIGNET BANKING CORP 10,200 295 314
SILICON GRAPHICS INC 30,700 711 783
SMITH INTL INC 8,100 251 364
</TABLE>
<PAGE>
SAVINGS FUND PLAN
FOR EMPLOYEES OF PACIFIC GAS AND ELECTRIC COMPANY
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
US SAVINGS BONDS
NAME OF ISSUER AND DESCRIPTION HELD AT CLOSE OF PERIOD COST CURRENT VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SONAT INC 700 37 36
SOUTHERN CO 105,000 2,413 2,376
SOUTHERN NATL CORP N C 16,100 375 584
SOUTHTRUST CORP 16,100 374 562
SOUTHWEST AIRLS CO 23,800 588 527
SPRINT CORP 67,400 1,903 2,688
SPS TRANSACTION SVCS INC 6,500 211 99
ST PAUL COS INC 37,100 983 2,175
STANDARD FED BANCORPORATION 4,900 204 279
SUMMIT BANCORP 14,800 534 648
SUN INC 4,500 120 110
SUN MICROSYSTEMS INC 69,800 663 1,793
SYMBOL TECHNOLOGIES INC 5,200 239 230
TCF FINANCIAL CORP 5,600 196 244
TCI SATELLITE ENTMT INC 12,600 178 124
TELE COMMUNICATIONS INC NEW 126,100 1,866 1,647
TEMPLE INLAND INC 17,100 856 926
TENET HEALTHCARE CORP 88,300 1,669 1,932
TENNECO INC NEW 68,500 2,959 3,091
TEXACO INC 52,300 3,422 5,132
TIME WARNER INC 103,200 3,766 3,870
TORCHMARK INC 14,300 660 722
TOSCO CORP 8,100 450 641
TOYS R US INC 77,000 2,543 2,310
TRANSAMERICA CORP 15,700 1,150 1,240
TRAVELERS GROUP INC 71,602 2,252 3,249
TRINOVA CORP 6,500 218 236
TYCO INT LTD 80,000 2,291 4,230
U S WEST INC 74,400 1,881 2,399
U S WEST INC 130,500 2,312 2,414
ULTRAMAR DIAMOND SHAMROCK 5,788 179 183
UNICOM CORP 33,900 852 920
UNILEVER N V 33,900 4,623 5,941
UNION CAMP CORP 5,900 284 282
UNION CARBIDE CORP 29,900 630 1,222
UNION ELEC CO 15,500 567 597
UNION PAC CORP 41,300 1,027 2,483
</TABLE>
<PAGE>
SAVINGS FUND PLAN
FOR EMPLOYEES OF PACIFIC GAS AND ELECTRIC COMPANY
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
US SAVINGS BONDS
NAME OF ISSUER AND DESCRIPTION HELD AT CLOSE OF PERIOD COST CURRENT VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
UNION PACIFIC RES GROUP INC 35,000 501 1,024
UNION PLANTERS CORP 10,500 337 410
UNITED CAROLINA BANCSHARES 1,900 74 75
UNITED HEALTHCARE CORP 95,200 4,433 4,284
UNUM CORP 14,500 952 1,048
USG CORP 15,000 419 508
USLIFE CORP 8,000 247 266
USX U S STL GROUP 16,900 544 530
V F CORP 21,000 1,045 1,418
VIACOM INC 71,400 3,314 2,490
VIVRA INC 15,400 456 425
WABASH NATL CORP 1,300 53 24
WAL MART STORES INC 453,300 11,950 10,369
WARNER LAMBERT CO 80,700 3,611 6,053
WASHINGTON FED INC 7,400 158 196
WASHINGTON MUT INC 12,400 318 537
WATSON PHARMACEUTICALS INC 8,900 322 400
WELLS FARGO + CO 1,100 304 297
WESTERN ATLAS INC 300 19 21
WESTERN RES INC 9,500 317 293
WEYERHAEUSER CO 46,400 1,995 2,198
WHIRLPOOL CORP 25,000 1,316 1,166
WILMINGTON TR CORP 5,500 179 217
WISCONSIN ENERGY CORP 14,500 387 390
WMX TECHNOLOGIES INC 169,800 5,329 5,540
WORTHINGTON INDS IN 3,400 67 62
XEROX CORP 66,700 3,387 3,510
360 COMMUNICATIONS CO 25,600 472 593
3COM CORP 21,800 806 1,600
-------------- -------------- --------------
TOTAL COMMON STOCKS 14,408,142 545,915 740,165
UNITED STATES GOVERNMENT SECURITIES
UNITED STATES TREASURY BILLS 1,200,000 1,190 1,193
</TABLE>
<PAGE>
SAVINGS FUND PLAN
FOR EMPLOYEES OF PACIFIC GAS AND ELECTRIC COMPANY
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
US SAVINGS BONDS
NAME OF ISSUER AND DESCRIPTION HELD AT CLOSE OF PERIOD COST CURRENT VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INTEREST BEARING ACCOUNTS
*STATE STREET BANK + TRUST CO
SHORT TERM INVESTMENT FUND 22,926,097 22,926 22,926
------------- ----------- ----------
TOTAL DIVERSIFIED EQUITY FUND 38,534,239 $570,031 $764,284
============== ============= ==============
GUARANTEED INCOME FUND (1)
CORPORATE DEBT INSTRUMENTS
BANKERS TR 07/97 5.02% N/A $ 5,330 $ 5,330
CAISSE DES DEPOTS 06/98 6.22% N/A 3,567 3,567
CAISSE DES DEPOTS 12/99 6.19% N/A 2,881 2,881
CAISSE DES DEPOTS (DC) 09/00 6.15% N/A 4,043 4,043
CDC INVESTMENT MGMT CORP 06/98 7.11% N/A 4,023 4,023
CDC INVESTMENT MGMT CORP 10/99 7.59% N/A 3,017 3,017
CDC INVESTMENT MGMT CORP 12/20 6.53% N/A 3,578 3,578
UNION BANK OF SWITZERLAND 03/00 4.62% N/A 2,020 2,020
UNION BANK OF SWITZERLAND 08/97 4.62% N/A 3,545 3,545
UNION BANK OF SWITZERLAND 10/98 5.63% N/A 2 2
UNION BANK OS SWITZERLAND 03/00 5.15% N/A 1,577 1,577
UNITED OF OMAHA LIFE INS 07/00 5.63% N/A 1,999 1,999
------------- ----------- ----------
TOTAL CORPORATE DEBT INSTRUMENTS N/A 35,582 35,582
INSURANCE COMPANY GENERAL ACCOUNTS
ALLSTATE LIFE INS CO 10/98 6.80% N/A 3,033 3,033
ALLSTATE LIFE INSURANCE CO 11/99 8.28% N/A 5,825 5,825
ALLSTATE LIFE INSURANCE CO 02/02 5.94% N/A 15,666 15,666
CROWN LIFE INS CO GIC 9005871 03/98 3.97% N/A 701 701
HANCOCK JOHN MUTUAL LIFE 7201 12/99 6.60% N/A 3,350 3,350
HANCOCK JOHN MUTUAL LIFE 06/20 5.99% N/A 2,984 2,984
HANCOCK JOHN MUTUAL LIFE 09/00 6.70% N/A 4,035 4,035
HANCOCK JOHN MUTUAL LIFE 10/97 4.82% N/A 8,094 8,094
</TABLE>
<PAGE>
SAVINGS FUND PLAN
FOR EMPLOYEES OF PACIFIC GAS AND ELECTRIC COMPANY
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
US SAVINGS BONDS
NAME OF ISSUER AND DESCRIPTION HELD AT CLOSE OF PERIOD COST CURRENT VALUE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LIFE INS CO OF VIRGINIA 02/00 6.37% N/A 4,000 4,000
MASS MUTUAL LIFE INS 11/03 5.95% N/A 16,407 16,407
MERRILL LYNCH MTG INVS INC 09/20 6.69% N/A 2,011 2,011
MET LIFE INS GAC 12700 08/99 7.42% N/A 13,480 13,480
METROPOLITAN LIFE INS CO 12/99 6.47% N/A 10,384 10,384
METROPOLITAN LIFE INS CO 12/99 6.43% N/A 1,144 1,144
NEW YORK LIFE INS CO 10/00 7.05% N/A 10,299 10,299
NEW YORK LIFE INS CO 12/98 6.18% N/A 5,090 5,090
NEW YORK LIFE INS CO 12/99 5.49% N/A 8,985 8,985
PEOPLES SECURITY LIFE 09/96 4.10% N/A 277 277
PEOPLES SECURITY LIFE 11/00 6.48% N/A 3,512 3,512
PEOPLES SECURITY LIFE 07/98 5.50% N/A 5,979 5,979
PEOPLES SECURITY LIFE 06/99 7.11% N/A 4,046 4,046
PEOPLES SECURITY LIFE 06/97 4.75% N/A 3,824 3,824
PEOPLES SECURITY LIFE 01/98 5.42% N/A 2,802 2,802
PEOPLES SECURITY LIFE 09/98 5.63% N/A 3,230 3,230
PEOPLES SECURITY LIFE 03/99 5.30% N/A 4,991 4,991
PEOPLES SECURITY LIFE 09/97 5.11% N/A 2,890 2,890
PEOPLES SECURITY LIFE 12/99 6.62% N/A 4,034 4,034
PEOPLES SECURITY LIFE 12/99 6.36% N/A 5,176 5,176
PROVIDENT LIFE + ACCIDENT 03/99 6.57% N/A 22,295 22,295
PRUDENTIAL INS CO OF AMER 09/98 6.16% N/A 2,060 2,060
SECURITY LIFE OF DENVER 08/98 6.20% N/A 6,017 6,017
SECURITY LIFE OF DENVER 10/99 6.01% N/A 5,025 5,025
STATE STREET BANK 11/00 7.07% N/A 987 987
STATE STREET BANK 01/01 6.34% N/A 1,774 1,774
STATE STREET BANK AND TRUST 05/00 7.16% N/A 4,899 4,899
STATE STREET BANK + TRUST 05/01 6.87% N/A 5,222 5,222
STATE STREET BANK + TRUST 09/01 6.84% N/A 8,462 8,462
STATE STREET BANK LEHMAN 10/00 7.17% N/A 6,053 6,053
STATE STREET BANK MIDLAND 04/03 7.32% N/A 1,850 1,850
STATE STREET BANK NYEG 10/02 6.75% N/A 1,977 1,977
U S DEPT VETERAN AFFAIRS REMIC 12/09 6.75% N/A 1,422 1,424
---------- ---------- ----------
TOTAL INSURANCE COMPANY GENERAL ACCOUNTS N/A 224,292 224,294
</TABLE>
<PAGE>
SAVINGS FUND PLAN
FOR EMPLOYEES OF PACIFIC GAS AND ELECTRIC COMPANY
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
US SAVINGS BONDS
NAME OF ISSUER AND DESCRIPTION HELD AT CLOSE OF PERIOD COST CURRENT VALUE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INTEREST BEARING ACCOUNTS
*STATE STREET BANK + TRUST CO
SHORT TERM INVESTMENT FUND 11,603,063 11,603 11,603
---------- -------- --------
TOTAL GUARANTEED INCOME FUND 11,603,063 $271,477 $271,479
================ ============== ===============
BOND INDEX FUND
VANGUARD BOND INDEX FUND INC 2,883,027 $ 28,474 $ 28,369
================ ============== ===============
STOCK AND BOND FUND
COLUMBIA BALANCED FUND INC 16,541,842 $107,533 $151,074
================ ============== ===============
UTILITY STOCK FUND
MELLON BANK UTILITY STOCK FUND 3,056,403 $ 40,932 $ 40,436
================ ============== ===============
TOTAL INVESTMENTS $1,923,422 $2,115,103
============== ==============
</TABLE>
(1) The Guaranteed Income Fund is not measured in number of shares and is not
applicable (N/A)
* A party-in-interest as defined by ERISA
<PAGE>
LINE 27 (D) - SCHEDULE OF REPORTABLE TRANSACTIONS FOR
THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
COMPANY STOCK FUND PACIFIC GAS & ELECTRIC SAVINGS
BENEFIT PLAN SERVICES
ERISA 5500 SCHEDULE OF 5% REPORTABLE SERIES OF TRANSACTIONS
FROM DATE: 01/01/96 TO DATE: 12/31/96
BEGINNING NET ASSET VALUE: 1,210,009,870.00
5% OF ASSET VALUE: 60,500,493.50
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
ASSET ID SECURITY DESCRIPTION RATE MAT DATE
# PURCHASES PURCHASE COST # SALES SALE PROCEEDS 5500 GAIN/LOSS TOTAL # TOTAL COST/PROCEEDS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMMON AND PREFERRED
- --------------------
56 152,507,457.76 236 184,291,862.87 -35,598,077.91 292 336,799,320.63
FIXED INCOME
- ------------
119 125,514,334.30 133 26,595,327 0.00 252 252,109,661.68
SHORT TERM
- ----------
0 0.00 0 0.00 0.00 0 0.00
REPORTABLE TRANSACTION TOTALS
- -----------------------------
175 278,021,792.06 369 310,887,190.25 -35,598,077.91 544 588,908,982.31
NON-REPORTABLE TRANSACTION TOTALS
- ---------------------------------
0 0.00 0 0.00 0.00 0 0.00
</TABLE>
<PAGE>
LINE 27 (D) - SCHEDULE OF REPORTABLE TRANSACTIONS FOR
THE YEAR ENDED DECEMBER 31, 1996
UNITED STATES BOND FUND PACIFIC GAS & ELECTRIC SAVINGS
PACIFIC GAS & ELECTRIC
ERISA 55000 SCHEDULE OF 5% REPORTABLE SERIES OF TRANSACTIONS
FROM DATE: 01/01/96 TO DATE: 12/31/96
BEGINNING NET ASSET VALUE: 4,424,073.00
5% OF ASSET VALUE: 221,203.65
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
ASSET ID SECURITY DESCRIPTION RATE MAT DATE
# PUCHASES PURCHASE COST # SALES SALE PROCEEDS 5500 GAIN/LOSS TOTAL # TOTAL COST/PROCEEDS
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COMMON AND PREFERRED
- --------------------
0 0.00 0 000 000 0 0.00
FIXED INCOME
- ------------
0 0.00 0 000 000 0 0.00
SHORT TERM
- ----------
0 0.00 0 000 000 0 0.00
REPORTABLE TRANSACTION TOTALS
- -----------------------------
0 0.00 0 000 000 0 0.00
NON-REPORTABLE TRANSACTION TOTALS
- ---------------------------------
0 0.00 33 71,631.25 000 33 71,631.25
</TABLE>
<PAGE>
LINE 27(D) - SCHEDULE OF REPORTABLE TRANSACTIONS FOR
THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
DIVERSIFIED EQUITY FUND PACIFIC GAS & ELECTRIC SAVINGS
J.P. MORGAN/NEW YORK
ERISA 5500 SCHEDULE OF 5% REPORTABLE SERIES OF TRANSACTIONS
FROM DATE: 01/01/96 TO DATE: 12/31/96
BEGINNING NET ASSET VALUE: 525,934,407.82
5% OF ASSET VALUE: 26,296,720.39
- ------------------------------------------------------------------------------------------------------------------------------------
ASSET ID SECURITY DESCRIPTION RATE MAT DATE
# PURCHASES PURCHASE COST # SALES SALE PROCEEDS 5500 GAIN/LOSS TOTAL # TOTAL COST/PROCEEDS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COMMON AND PREFERRED
- --------------------
0 0.00 0 0.00 0.00 0 0.00
FIXED INCOME
- ------------
151 171,167,728.94 101 167,266,751.72 0.00 252 338,434,480.66
SHORT TERM
- ----------
0 0.00 0 0.00 0.00 0 0.00
REPORTABLE TRANSACTION TOTALS
- -----------------------------
151 171,167,728.94 101 167,266,751.72 0.00 252 338,434,480.66
NON-REPORTABLE TRANSACTION TOTALS
- ---------------------------------
1637 359,394,898.44 732 242,911,857.32 20,089,445.54 2369 602,306,755.76
</TABLE>
RUN DATE: 01/16/97
<PAGE>
LINE 27 (D) - SCHEDULE OF REPORTABLE TRANSACTIONS FOR
THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
GUARANTEED INCOME FUND PACIFIC GAS & ELECTRIC CO SFP
PRIMCO INVESTMENT MANAGEMENT
ERISA 5500 SCHEDULE OF 5% REPORTABLE SERIES OF TRANSACTIONS
FROM DATE: 01/01/96 TO DATE: 12/31/96
BEGINNING NET ASSET VALUE: 221,871,754.83
5% OF ASSET VALUE: 11,093,587.74
- ----------------------------------------------------------------------------------------------------------------------------------
ASSET ID SECURITY DESCRIPTION RATE MAT DATE
# PURCHASES PURCHASE COST # SALES SALE PROCEEDS 5500 GAIN/LOSS TOTAL # TOTAL COST/PROCEEDS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMMON AND PREFERRED
- --------------------
0 0.00 0 0.00 0.00 0 0.00
FIXED INCOME
- ------------
204 215,435,335.77 205 206,966,880.60 0.00 409 422,402,216.37
SHORT TERM
- ----------
0 0.00 0 0.00 0.00 0 0.00
REPORTABLE TRANSACTION TOTALS
- -----------------------------
204 215,435,335.77 205 206,966,880.60 0.00 409 422,402,216.37
NON-REPORTABLE TRANSACTION TOTALS
- ---------------------------------
486 113,504,393.58 284 69,973,480.43 0.00 770 183,477,874.01
</TABLE>
<PAGE>
LINE 27 (D) - SCHEDULE OF REPORTABLE TRANSACTIONS FOR
THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
BOND INDEX FUND PACIFIC GAS & ELECTRIC SAVINGS
VANGUARD BOND MARKET FUND
ERISA 5500 SCHEDULE OF 5% REPORTABLE SERIES OF TRANSACTIONS
FROM DATE: 01/01/96 TO DATE: 12/31/96
BEGINNING NET ASSET VALUE: 26,535,037.11
5% OF ASSET VALUE: 1,326,751.86
- ----------------------------------------------------------------------------------------------------------------------------------
ASSET ID SECURITY DESCRIPTION RATE MAT DATE
# PURCHASES PURCHASE COST # SALES SALE PROCEEDS 5500 GAIN/LOSS TOTAL # TOTAL COST/PROCEEDS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMMON AND PREFERRED
- --------------------
140 11,205,648.26 128 8,432,569.85 -251,831.24 268 19,638,218.11
FIXED INCOME
- ------------
0 0.00 0 0.00 0.00 0 0.00
SHORT TERM
- ----------
0 0.00 0 0.00 0.00 0 0.00
REPORTABLE TRANSACTION TOTALS
- -----------------------------
140 11,205,648.26 128 8,432,569.85 -251,831.24 268 19,638,218.11
NON-REPORTABLE TRANSACTION TOTALS
- ---------------------------------
0 0.00 0 0.00 0.00 0 0.00
</TABLE>
<PAGE>
LINE 27 (D) - SCHEDULE OF REPORTABLE TRANSACTIONS FOR
THE YEAR ENDED DECEMBER 31,1996
<TABLE>
<CAPTION>
STOCK AND BOND FUND PACIFIC GAS & ELECTRIC SAVINGS
COLUMBIA BALANCED FUND
ERISA 5500 SCHEDULE OF 5% REPORTABLE SERIES OF TRANSACTIONS
FROM DATE: 01/01/96 TO DATE: 12/31/96
BEGINNING NET ASSET VALUE: 127,992,410 .19
5% OF ASSET VALUE: 6,399,620.51
- ------------------------------------------------------------------------------------------------------------------------------------
ASSET ID SECURITY DESCRIPTION RATE MAT DATE
# PURCHASES PURCHASE COST # SALES SALE PROCEEDS 5500 GAIN/LOSS TOTAL # TOTAL COST/PROCEEDS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMMON AND PREFERRED
- --------------------
146 24,763,393.96 119 18,463,813.63 791,583.64 265 43,227,207.59
FIXED INCOME
- ------------
0 0.00 0 0.00 0.00 0 0.00
SHORT TERM
- ----------
0 0.00 0 0.00 0.00 0 0.00
REPORTABLE TRANSACTION TOTALS
- -----------------------------
146 24,763,393.96 119 18,463,813.63 791,583.64 265 43,227,207.59
NON-REPORTABLE TRANSACTION TOTALS
- ---------------------------------
0 0.00 0 0.00 0.00 0 0.00
</TABLE>
<PAGE>
LINE 27 (D) - SCHEDULE OF REPORTABLE TRANSACTIONS FOR
THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
UTILITY STOCK FUND PACIFIC GAS & ELECTRIC SAVINGS
DREYFUS UTILITY STOCK FUND
ERISA 5500 SCHEDULE OF 5% REPORTABLE SERIES OF TRANSACTIONS
FROM DATE: 01/01/96 TO DATE: 12/31/96
BEGINNING NET ASSET VALUE: 49,283,609
5% OF ASSET VALUE: 2,464,180
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
ASSET ID SECURITY DESCRIPTION RATE MAT DATE
# PURCHASES PURCHASE COST # SALES SALE PROCEEDS 5500 GAIN/LOSS TOTAL # TOTAL COST/PROCEEDS
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COMMON AND PREFERRED
- --------------------
108 13,689,799.14 157 20,158,385.23 -935,171.48 265 33,848,184.37
FIXED INCOME
- ------------
0 0.00 0 0.00 0.00 0 0.00
SHORT TERM
- ----------
0 0.00 0 0.00 0.00 0 0.00
REPORTABLE TRANSACTION TOTALS
- -----------------------------
108 13,689,799.14 157 20,158,385.23 -935,171.48 265 33,848,184.37
NON-REPORTABLE TRANSACTION TOTALS
- ---------------------------------
0 0.00 0 0.00 0.00 0 0.00
</TABLE>
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART I
FINANCIAL STATEMENTS
TABLE OF CONTENTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits - December 31, 1996
and 1995
Statement of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 1996
Notes to Financial Statements - December 31, 1996
<PAGE>
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Employee Benefit Finance Committee
of Pacific Gas and Electric Company and
Participants in the Savings Fund Plan:
We have audited the accompanying statements of net assets available for benefits
of Pacific Gas and Electric Company Savings Fund Plan - Part I (the Plan) as of
December 31, 1996 and 1995, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1996. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1996 and 1995, and the changes in its net assets available for
benefits for the year ended December 31, 1996, in conformity with generally
accepted accounting principles.
Arthur Andersen LLP
San Francisco, California
February 26, 1997
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART I
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1996 AND 1995
1996 1995
---------- ----------
(in thousands)
ASSETS:
Investment in Pacific Gas and Electric
Company Master Trust, at fair value $1,025,301 $1,000,595
---------- ----------
Total assets 1,025,301 1,000,595
LIABILITIES 926 -
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $1,024,375 $1,000,595
========== ==========
The accompanying Notes to Financial Statements are an integral part of these
statements.
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART I
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
(in thousands)
ADDITIONS:
<S> <C>
Participant contributions $ 35,430
Employer contributions 16,122
Net investment gain from Pacific Gas
and Electric Company Master Trust 25,310
--------------
Total Additions 76,862
--------------
DEDUCTIONS:
Benefits paid directly to participants or beneficiaries 52,295
Interplan transfer to Savings Fund Plan - Part II 787
--------------
Total Deductions 53,082
--------------
Increase in Net Assets Available for Benefits 23,780
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of the year 1,000,595
--------------
End of the year $1,024,375
==============
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
statements.
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART I
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 1: Plan Description
The Pacific Gas and Electric Company Savings Fund Plan - Part I (the
Plan) is a defined contribution plan and is subject to the provisions of the
Employee Retirement Income Security Act of 1974. The Plan covers all eligible
non-union employees of Pacific Gas and Electric Company (the Company), and the
non-union employees of any other entity designated by the Company's Board of
Directors. The Plan participates in the Pacific Gas and Electric Company Savings
Fund Plan Master Trust (the Master Trust), and is administered by the Company's
Employee Benefit Administrative Committee and Employee Benefit Finance
Committee.
Although the Company has not expressed any intent to do so, its Board
of Directors reserves the right to amend or terminate the Plan at any time.
Participants should refer to the Plan document for a complete description of the
Plan's provisions. In addition, the financial statements of the Master Trust
provide information regarding the activities and transactions of the various
investment options offered by the Plan.
All participants' contributions and their share of all employer
contributions, and the earnings and losses resulting from such contributions are
immediately vested.
Employees are eligible to participate in the Plan upon completion of
one year of service. Employee contributions, up to a maximum of 6% of covered
compensation, as defined, and depending on length of service, are matched by
employer contributions at a 75% rate.
Eligible employees may elect to contribute to the Plan up to 15% of
their covered compensation on a pre-tax or after-tax basis. This amount may be
deferred compensation (401(k)), or after-tax contributions (non-401(k)). 401(k)
contributions are not subject to federal or state income tax until withdrawn or
distributed from the Plan.
All contributions made to the Plan prior to October 1, 1984, are
considered to be non-401(k) contributions. As provided under the Tax Reform Act
of 1986, employee 401(k) contributions may not exceed $9,500 for 1996, and total
contributions to a participant's account may not exceed the lesser of 25% of
compensation or $30,000 a year. The annual 401(k) limitation, as indexed, may be
adjusted each year to reflect changes in the cost of living.
Eligible employees may elect to contribute to the Plan any excess
funds from the FLEX benefits program, which is a cafeteria plan qualified under
Section 125 of the Internal Revenue Code (IRC). These funds, which are invested
in the participant's account in December, are considered 401(k) contributions,
but are not eligible for matching employer contributions.
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART I
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 2: Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared in conformity with
generally accepted accounting principles. The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions. These estimates and assumptions
affect the reported amounts of additions, deductions, assets, and liabilities
and disclosure of contingencies. Actual results could differ from these
estimates.
The Plan's interest in the Master Trust is stated at fair value based
on the Plan's prorated interest in the Master Trust. The Master Trust values
investments in the Guaranteed Income Fund at cost which approximates fair value.
Generally, all other investments are stated at fair value based on published
market quotations.
Interest income, dividends, investment management fees, where
appropriate, and the net appreciation or depreciation in the fair value of the
investments held by the Master Trust are allocated to the individual
participating plans each day based upon their proportional share of the fund
balances.
Benefits are recorded when paid.
Reclassifications
Certain amounts in the prior year have been reclassified and formatted
to conform to the 1996 presentation.
NOTE 3: Federal Income Taxes
The Internal Revenue Service (IRS) has ruled that the Plan is a
qualified tax-exempt plan under Section 401(a) and Section 409(a) of the IRC and
the trust forming a part thereof is exempt under Section 501(a). Accordingly, no
provision for federal income taxes has been made in the financial statements.
Furthermore, participating employees are not liable for federal income tax on
amounts allocated to their accounts attributable to: (1) employee 401(k)
contributions, (2) dividends, earnings, and interest income on both 401(k)
contributions and non-401(k ) contributions, or (3) employer contributions,
until the time that they withdraw such amounts from the Plan.
The Company received a favorable tax determination letter from the IRS
in November of 1995. Accordingly, the Plan sponsor believes that the Plan
continues to be designed and operated in accordance with IRS requirements.
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART I
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 4: Investments
The Plan has a prorated interest in the net assets of the Master
Trust. The Master Trust Agreement allows the Company's Savings Fund Plans and
the Pacific Service Employees Association to participate in the Master Trust.
The Plan and Master Trust trustee, State Street Bank and Trust
Company, invests a significant portion of the contributions to the Plan in
common stock of the Company. The Company pays all costs of administering the
Plan, including fees and expenses of the Trustee and investment management fees
for the Diversified Equity Fund and the Guaranteed Income Fund.
Participants designate the way in which their contributions are
invested and may change their investment designation at any time. Participants
may elect to have their contributions invested in one or more of the following
funds held by the Master Trust:
- Company Stock Fund, invested in Pacific Gas and Electric
Company common stock;
- Diversified Equity Fund (DEF), invested in a diversified
portfolio of common stock of other companies;
- Guaranteed Income Fund (GIF), invested in contracts which offer
a fixed rate of interest for a specified period of time;
- Bond Index Fund (BIF), invested in Vanguard Bond Index Fund, a
diversified portfolio consisting of marketable fixed-income
securities;
- Stock and Bond Fund (SBF), invested in a Columbia Balanced
Fund, a diversified portfolio of marketable equity securities
and marketable fixed-income securities.
- Utility Stock Fund (USF), invested in Mellon Bank Utility Stock
Fund, a portfolio of marketable equity securities of electric
utility companies that are members of the Edison Electric
Institute, including Pacific Gas and Electric Company.
The United States Bond Fund was closed to new contributions on July 1,
1991.
Participants should refer to the separate master trust financial
statements or their individual quarterly Savings Fund Plan account statements
for information relating to the activity in each of the investment options.
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART I
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 4: Investments (Continued)
A participant's interest in the investment funds is represented by
participation units allocated on the basis of contributions and assigned a unit
value on the basis of the total value of each fund. For investments in the
United States Savings Bond Fund, a unit is one bond.
<PAGE>
PACIFIC GAS ELECTRIC COMPANY
SAVINGS FUND PLAN - PART I
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 4: Investments (Continued)
The following summarizes the net assets and related investment gain of the
Master Trust and the Plan's allocated share of such amounts:
(in thousands)
ASSETS
1996 1995
Investments, at fair value:
Company Stock Fund
Pacific Gas and Electric $ 830,689 $ 1,161,205
Company common stock
United States government securities 4,542 4,424
DEF
United States treasury bills 1,193 1,042
Corporate stocks - common 740,165 503,528
GIF
Corporate debt intruments 35,582 63,540
Insurance company general accounts 224,294 146,976
Registered investment companies
Vanguard Bond Index Fund 28,369 26,394
Columbia Balanced Fund 151,074 127,992
Mellon Bank Utility Stock Fund 40,436 49,284
Interest bearing accounts 58,759 55,584
----------- -----------
Total investments 2,115,103 2,139,969
----------- -----------
Receivables:
Dividends and interest 14,919 22,698
Other receivables 537 3,384
----------- -----------
Total receivables 15,456 26,082
----------- -----------
Total assets 2,130,559 2,166,051
----------- -----------
LIABILITIES 1,925 -
----------- -----------
NET ASSETS $ 2,128,634 $ 2,166,051
=========== ===========
Allocated to the Plan $ 1,024,375 $ 1,000,595
Allocated to other plans 1,104,259 1,165,456
----------- -----------
$ 2,128,634 $ 2,166,051
=========== ===========
<PAGE>
PACIFIC GAS ELECTRIC COMPANY
SAVINGS FUND PLAN - PART I
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 4: Investments (Continued)
The composition of the Master Trust investment loss for the year ended
December 31, 1996 is as follows:
(in thousands)
Interest income
Interest bearing accounts $ 2,835
United States government securities 189
Fixed income investments 13,263
----------
Total interest income 16,287
----------
Dividend income
Common stock 85,049
Registered investment companies 4,282
----------
Total dividend income 89,331
----------
Other income 260
Net depreciation in value of investments (161,961)
----------
Total investment loss $ (56,083)
==========
Allocated to the Plan $ 25,310
Allocated to other plans (81,393)
----------
$ (56,083)
----------
<PAGE>
PACIFIC GAS ELECTRIC COMPANY
SAVINGS FUND PLAN - PART I
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 4: Investments (Continued)
The net appreciation (depreciation) in fair value of investments of the
Master Trust by major investment category for for the year ended December 31,
1996 is as follows:
(in thousands)
Pacific Gas and Electric Company Common Stock Fund $ (298,733)
Diversified Equity Fund 123,788
Bond Index Fund (798)
Stock and Bond Fund 16,161
Utility Stock Fund (2,379)
----------
Total depreciation $ (161,961)
==========
Allocated to the Plan $ (16,835)
Allocated to other plans (145,126)
----------
$ (161,961)
==========
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART I
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 4: Investments (Continued)
The net asset value per unit of the Company Stock Fund, DEF, GIF, BIF, SBF,
and USF is determined by dividing the fair value of fund assets by the number of
fund units outstanding. The total number of units held by the Plan and the value
per unit of the Company Stock Fund, DEF, GIF, BIF, SBF, and USF for the four
quarters ended December 31, 1996 and 1995 are as follows:
-------------------------------------------------------------------------------
1996
----------
March 31 June 30 September 30 December 31
- --------------------------------------------------------------------------------
Company Stock Fund
Number of units 32,838,726 31,699,494 31,317,822 30,249,894
Value per unit $9.93 $10.42 $9.99 $9.77
DEF
Number of units 3,436,918 3,565,372 3,557,849 3,570,173
Value per unit $106.16 $110.52 $113.86 $124.11
GIF
Number of units 105,473,859 109,034,254 118,296,190 129,108,827
Value per unit $1.06 $1.07 $1.09 $1.11
BIF
Number of units 1,359,087 1,315,660 1,351,415 1,339,088
Value per unit $13.63 $13.72 $13.96 $14.40
SBF
Number of units 11,700,898 11,591,287 11,497,781 11,497,145
Value per unit $7.90 $8.13 $8.34 $8.72
USF
Number of units 1,630,043 1,448,747 1,393,897 1,243,505
Value per unit $16.16 $16.55 $15.88 $16.72
- --------------------------------------------------------------------------------
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART I
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 4: Investments (Continued)
- --------------------------------------------------------------------------------
1995
----------
March 31 June 30 September 30 December 31
- --------------------------------------------------------------------------------
Company Stock Fund *
Number of units N/A 38,060,709 36,582,070 34,556,057
Value per unit N/A $11.99 $12.53 $12.13
DEF
Number of units 3,002,943 2,937,324 3,095,153 3,264,636
Value per unit $78.95 $86.73 $93.48 $100.10
GIF**
Number of units 111,411,797 115,607,468 113,229,996 111,679,180
Value per unit $1.00 $1.01 $1.03 $1.04
BIF
Number of units 1,335,076 1,326,316 1,370,682 1,333,643
Value per unit $12.32 $12.99 $13.30 $13.89
SBF
Number of units 10,987,970 10,665,946 11,073,905 11,538,598
Value per unit $6.61 $7.03 $7.39 $7.77
USF
Number of units 1,879,041 1,659,091 1,574,548 1,661,633
Value per unit $13.27 $14.14 $15.12 $16.50
- --------------------------------------------------------------------------------
* The Company Stock Fund converted to a unitized fund in April 1995.
** The GIF Fund converted to a unitized fund in April 1995 and the unit value
was no longer fixed at $1.00.
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART I
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 5: Subsequent Event
Effective January 1, 1997, the Company became a subsidiary of its new
parent holding company, PG&E Corporation. The Company's ownership interest in
Pacific Gas Transmission Company (PGT) and PG&E Enterprises (Enterprises) was
transferred to PG&E Corporation. The Company's outstanding common stock was
converted on a share-for-share basis into PG&E Corporation common stock. All
stock held by the Company Stock Fund is now PG&E Corporation common stock.
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART II
FINANCIAL STATEMENTS
TABLE OF CONTENTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits - December 31, 1996 and
1995
Statement of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 1996
Notes to Financial Statements - December 31, 1996
<PAGE>
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Employee Benefit Finance Committee
of Pacific Gas and Electric Company and
Participants in the Savings Fund Plan:
We have audited the accompanying statements of net assets available for benefits
of Pacific Gas and Electric Company Savings Fund Plan - Part II (the Plan) as of
December 31, 1996 and 1995, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1996. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1996 and 1995, and the changes in its net assets available for
benefits for the year ended December 31, 1996, in conformity with generally
accepted accounting principles.
Arthur Andersen LLP
San Francisco, California
February 26, 1997
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART II
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
--------- ---------
(in thousands)
<S> <C> <C>
ASSETS:
Investment in Pacific Gas and Electric
Company Master Trust, at fair value $1,100,025 $1,159,330
---------- ---------
Total assets 1,100,025 1,159,330
LIABILITIES 994 -
---------- ---------
NET ASSETS AVAILABLE FOR BENEFITS $1,099,031 $1,159,330
========== =========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
statements.
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART II
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
(in thousands)
ADDITIONS:
<S> <C>
Participant contributions $ 56,628
Employer contributions 15,518
Interplan transfer from other plans 868
Net investment loss from Pacific Gas
and Electric Company Master Trust (81,121)
---------------------
Total Additions (8,107)
---------------------
DEDUCTIONS:
Benefits paid directly to participants or beneficiaries 52,192
---------------------
Total Deductions 52,192
---------------------
Decrease in Net Assets Available for Benefits (60,299)
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of the year 1,159,330
---------------------
End of the year $1,099,031
=====================
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
statements.
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART II
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 1: Plan Description
The Pacific Gas and Electric Company Savings Fund Plan - Part II (the
Plan) is a defined contribution plan and is subject to the provisions of the
Employee Retirement Income Security Act of 1974. The Plan covers all union-
represented employees of Pacific Gas and Electric Company (the Company), and
the union employees of any other entity designated by the Company's Board of
Directors. The Plan participates in the Pacific Gas and Electric Company Savings
Fund Plan Master Trust (the Master Trust) and is administered by the Company's
Employee Benefit Administrative Committee and Employee Benefit Finance
Committee.
Although the Company has not expressed any intent to do so, its Board
of Directors reserves the right to amend or terminate the Plan at any time.
Participants should refer to the Plan document for a complete description of the
Plan's provisions. In addition, the financial statements of the Master Trust
provide information regarding the activities and transactions of the various
investment options offered by the Plan.
All participants' contributions and their share of all employer
contributions, and the earnings and losses resulting from such contributions are
immediately vested and nonforfeitable.
Employees are eligible to participate in the Plan upon completion of
one year of service. Employee contributions, up to a maximum of 6% of covered
compensation, as defined, and depending on length of service, are matched by
employer contributions at a 50% rate.
Eligible employees may elect to contribute to the Plan up to 15% of
their covered compensation on a pre-tax or after-tax basis. This amount may be
deferred compensation (401(k)), or after-tax contributions (non-401(k)). 401(k)
contributions are not subject to federal or state income tax until withdrawn or
distributed from the Plan.
All contributions made to the Plan prior to October 1, 1984, are
considered to be non-401(k) contributions. As provided under the Tax Reform Act
of 1986, employee 401(k) contributions may not exceed $9,500 for 1996, and total
contributions to a participant's account may not exceed the lesser of 25% of
compensation or $30,000 a year. The annual 401(k) limitation, as indexed,
may be adjusted each year to reflect changes in the cost of living.
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART II
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 2: Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared in conformity with
generally accepted accounting principles. The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions. These estimates and assumptions
affect the reported amounts of additions, deductions, assets, and liabilities
and disclosure of contingencies. Actual results could differ from these
estimates.
The Plan's interest in the Master Trust is stated at fair value based
on the Plan's prorated interest in the Master Trust. The Master Trust values
investments in the Guaranteed Income Fund at cost which approximates fair value.
Generally, all other investments are stated at fair value based on published
market quotations.
Interest income, dividends, investment management fees, where
appropriate, and the net appreciation or depreciation in the fair value of the
investments held by the Master Trust are allocated to the individual
participating plans each day based upon their proportional share of the fund
balances.
Benefits are recorded when paid.
Reclassifications
Certain amounts in the prior year have been reclassified and formatted
to conform to the 1996 presentation.
NOTE 3: Federal Income Taxes
The Internal Revenue Service (IRS) has ruled that the Plan is a
qualified tax-exempt plan under Section 401(a) and Section 409(a) of the IRC and
the trust forming a part thereof is exempt under Section 501(a). Accordingly, no
provision for federal income taxes has been made in the financial statements.
Furthermore, participating employees are not liable for federal income tax on
amounts allocated to their accounts attributable to: (1) employee 401(k)
contributions, (2) dividends, earnings, and interest income on both 401(k)
contributions and non-401(k ) contributions, or (3) employer contributions,
until the time that they withdraw such amounts from the Plan.
The Company received a favorable determination letter from the IRS in
November of 1995. Accordingly, the Plan sponsor believes that the Plan continues
to be designed and operated in accordance with IRS requirements.
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART II
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 4: Investments
The Plan has a prorated interest in the net assets of the Master
Trust. The Master Trust Agreement allows the Company's Savings Fund Plans and
the Pacific Service Employees Association to participate in the Master Trust.
The Plan and Master Trust trustee, State Street Bank and Trust
Company, invests a significant portion of the contributions to the Plan in
common stock of the Company. The Company pays all costs of administering the
Plan, including fees and expenses of the Trustee and investment management fees
for the Diversified Equity Fund and the Guaranteed Income Fund.
Participants designate the way in which their contributions are
invested and may change their investment designation at any time. Participants
may elect to have their contributions invested in one or more of the following
funds held by the Master Trust:
- Company Stock Fund, invested in Pacific Gas and Electric
Company common stock;
- Diversified Equity Fund (DEF), invested in a diversified
portfolio of common stock of other companies;
- Guaranteed Income Fund (GIF), invested in contracts which offer
a fixed rate of interest for a specified period of time;
- Bond Index Fund (BIF), invested in Vanguard Bond Index Fund, a
diversified portfolio consisting of marketable fixed-income
securities;
- Stock and Bond Fund (SBF), invested in a Columbia Balanced
Fund, a diversified portfolio of marketable equity securities
and marketable fixed-income securities.
- Utility Stock Fund (USF), invested in Mellon Bank Utility Stock
Fund, a portfolio of marketable equity securities of electric
utility companies that are members of the Edison Electric
Institute, including Pacific Gas and Electric Company.
The United States Bond Fund was closed to new contributions on July 1,
1991.
Participants should refer to the separate master trust financial
statements or their individual quarterly Savings Fund Plan account statements
for information relating to the activity in each of the investment options.
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART II
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 4: Investments (Continued)
A participant's interest in the investment funds is represented by
participation units allocated on the basis of contributions and assigned a unit
value on the basis of the total value of each fund. For investments in the
United States Savings Bond Fund, a unit is one bond.
<PAGE>
PACIFIC GAS ELECTRIC COMPANY
SAVINGS FUND PLAN - PART II
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 4: Investments (Continued)
The following summarizes the net assets and related investment gain of the
Master Trust and the Plan's allocated share of such amounts:
(in thousands)
ASSETS
1996 1995
Investments, at fair value:
Company Stock Fund
Pacific Gas and Electric
Company common stock $ 830,689 $ 1,161,205
United States government securities 4,542 4,424
DEF
United States treasury bills 1,193 1,042
Corporate stocks - common 740,165 503,528
GIF
Corporate debt intruments 35,582 63,540
Insurance company general accounts 224,294 146,976
Registered investment companies
Vanguard Bond Index Fund 28,369 26,394
Columbia Balanced Fund 151,074 127,992
Mellon Bank Utility Stock Fund 40,436 49,284
Interest bearing accounts 58,759 55,584
------------ ------------
Total investments 2,115,103 2,139,969
------------ ------------
Receivables:
Dividends and interest 14,919 22,698
Other receivables 537 3,384
------------ ------------
Total receivables 15,456 26,082
------------ ------------
Total assets 2,130,559 2,166,051
------------ ------------
LIABILITIES 1,925 -
------------ ------------
NET ASSETS $ 2,128,634 $ 2,166,051
============ ============
Allocated to the Plan $ 1,099,031 $ 1,159,330
Allocated to other plans 1,029,603 1,006,721
------------ ------------
$ 2,128,634 $ 2,166,051
============ ============
<PAGE>
PACIFIC GAS ELECTRIC COMPANY
SAVINGS FUND PLAN - PART II
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 4: Investments (Continued)
The composition of the Master Trust investment loss for the year ended
December 31, 1996 is as follows:
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Interest income
Interest bearing accounts $ 2,835
United States government securities 189
Fixed income investments 13,263
--------
Total interest income 16,287
--------
Dividend income
Common stock 85,049
Registered investment companies 4,282
--------
Total dividend income 89,331
--------
Other income 260
Net depreciation in value of investments (161,961)
--------
Total investment loss $(56,083)
========
Allocated to the Plan $(81,121)
Allocated to other plans 25,038
--------
$(56,083)
========
</TABLE>
<PAGE>
PACIFIC GAS ELECTRIC COMPANY
SAVINGS FUND PLAN - PART II
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 4: Investments (Continued)
The net appreciation (depreciation) in fair value of investments of the
Master Trust by major investment category for for the year ended December 31,
1996 is as follows:
(in thousands)
Pacific Gas and Electric Company Common Stock Fund $ (298,733)
Diversified Equity Fund 123,788
Bond Index Fund (798)
Stock and Bond Fund 16,161
Utility Stock Fund (2,379)
---------
Total depreciation $ (161,961)
=========
Allocated to the Plan $ (144,742)
Allocated to other plans (17,219)
---------
$ (161,961)
=========
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART II
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 4: Investments (Continued)
The net asset value per unit of the Company Stock Fund, DEF, GIF, BIF, SBF,
and USF is determined by dividing the fair value of fund assets by the number of
fund units outstanding. The total number of units held by the Plan and the value
per unit of the Company Stock Fund, DEF, GIF, BIF, SBF, and USF for the four
quarters ended December 31, 1996 and 1995 are as follows:
- --------------------------------------------------------------------------------
1996
----------
March 31 June 30 September 30 December 31
- --------------------------------------------------------------------------------
Company Stock Fund
Number of units 63,389,025 61,220,121 60,397,336 58,053,463
Value per unit $9.93 $10.42 $9.99 $9.77
DEF
Number of units 2,144,428 2,321,084 2,323,059 2,561,391
Value per unit $106.16 $110.52 $113.86 $124.11
GIF
Number of units 98,413,714 104,866,489 113,460,916 119,383,240
Value per unit $1.06 $1.07 $1.09 $1.11
BIF
Number of units 608,823 620,942 621,454 638,297
Value per unit $13.63 $13.72 $13.96 $14.40
SBF
Number of units 5,078,215 5,356,303 5,348,842 5,777,039
Value per unit $7.90 $8.13 $8.34 $8.72
USF
Number of units 1,377,472 1,285,129 1,250,050 1,173,291
Value per unit $16.16 $16.55 $15.88 $16.72
- --------------------------------------------------------------------------------
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART II
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 4: Investments (Continued)
- --------------------------------------------------------------------------------
1995
----------
March 31 June 30 September 30 December 31
- --------------------------------------------------------------------------------
Company Stock Fund *
Number of units N/A 68,143,409 66,801,849 65,031,629
Value per unit N/A $11.99 $12.53 $12.13
DEF
Number of units 1,577,106 1,682,853 1,790,058 1,985,867
Value per unit $78.95 $86.73 $93.48 $100.10
GIF**
Number of units 89,579,774 94,675,847 97,616,222 99,953,495
Value per unit $1.00 $1.01 $1.03 $1.04
BIF
Number of units 463,904 520,133 548,113 587,137
Value per unit $12.32 $12.99 $13.30 $13.89
SBF
Number of units 4,070,259 4,201,058 4,402,379 4,934,990
Value per unit $6.61 $7.03 $7.39 $7.77
USF
Number of units 1,317,434 1,286,634 1,249,692 1,326,902
Value per unit $13.27 $14.14 $15.12 $16.50
- --------------------------------------------------------------------------------
* The Company Stock Fund converted to a unitized fund in April 1995.
** The GIF Fund converted to a unitized fund in April 1995 and the unit value
was no longer fixed at $1.00.
<PAGE>
PACIFIC GAS AND ELECTRIC COMPANY
SAVINGS FUND PLAN - PART II
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 5: Subsequent Event
Effective January 1, 1997, the Company became a subsidiary of its new
parent holding company, PG&E Corporation. The Company's ownership interest in
Pacific Gas Transmission Company (PGT) and PG&E Enterprises (Enterprises) was
transferred to PG&E Corporation. The Company's outstanding common stock was
converted on a share-for-share basis into PG&E Corporation common stock. All
stock held by the Company Stock Fund is now PG&E Corporation common stock.
60
<PAGE>
EXHIBIT 2
[LETTERHEAD OF ARTHUR ANDERSEN LLP]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
reports dated February 26, 1997, included in this Form 11-K, into the previously
filed Registration Statement File No. 33-50601.
ARTHUR ANDERSEN LLP
San Francisco, California
March 7, 1997