<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 1998
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _____ to ______________.
Commission File Number: 333-69437
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
U.S. Generating Company 401(k) Profit-Sharing Plan for Bargaining Unit Employees
7500 Old Georgetown Road
Suite 1300
Bethesda, Maryland 20814-6161
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
PG&E CORPORATION
One Market, Spear Tower
Suite 2400
San Francisco, Ca 94105
<PAGE>
REQUIRED INFORMATION
1. The Statement of Net Assets Available for Benefits as of December 31, 1998
and the Statement of Changes in Net Assets Available for Benefits for the
Year Ended December 31, 1998, together with supplemental schedules and the
report of Arthur Andersen LLP, independent accountants, are contained in
Exhibit 1 to this Annual Report.
2. The Consent of Arthur Andersen LLP, independent accountants, is contained
in Exhibit 2 to this Annual Report.
<PAGE>
SIGNATURES
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.
U.S. GENERATING COMPANY 401(K)
PROFIT-SHARING PLAN FOR
BARGAINING UNIT EMPLOYEES
June 7, 1999 By: PG&E GENERATING COMPANY (Formerly U.S.
Generating Company), as Plan
Administrator
By: SANFORD L. HARTMAN
Sanford L. Hartman
Vice President and General Counsel
<PAGE>
EXHIBIT 1
U.S. GENERATING COMPANY
401(k) PROFIT-SHARING PLAN
FOR BARGAINING UNIT EMPLOYEES
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998
TOGETHER WITH REPORT OF
INDEPENDENT PUBLIC ACCOUNTANTS
<PAGE>
U.S. GENERATING COMPANY
401(k) PROFIT-SHARING PLAN
FOR BARGAINING UNIT EMPLOYEES
<TABLE>
<CAPTION>
Table of Contents
<S> <C>
Report of Independent Public Accountants 1
Statement of Net Assets Available for Benefits as of December 31, 1998 2
Statement of Changes in Net Assets Available for Benefits
for the Period from September 1, 1998 (Inception) through December 31, 1998 3
Notes to Financial Statements 4
Fund Information:
Exhibit I Statement of Changes in Net Assets Available for Benefits with
Fund Information for the Period from September 1, 1998 (Inception)
through December 31, 1998 10
Supplemental Schedules:
Schedule I Line 27(a) - Schedule of Assets Held for Investment Purposes as of
December 31, 1998 11
Schedule II Line 27(d) - Schedule of Reportable Transactions for the
Period from September 1, 1998 (Inception) through December 31, 1998 12
</TABLE>
<PAGE>
[LOGO OF ARTHUR ANDERSEN LLP]
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Employee Benefit Committee of PG&E Corporation,
U.S. Generating Company and Participants in the
U.S. Generating Company 401(k) Profit-Sharing
Plan for Bargaining Unit Employees:
We have audited the accompanying statement of net assets available for benefits
of U.S. Generating Company 401(k) Profit-Sharing Plan for Bargaining Unit
Employees (the Plan) as of December 31, 1998, and the related statement of
changes in net assets available for benefits for the period from September 1,
1998 (inception), to December 31, 1998. These financial statements and the
schedules referred to below are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these financial statements and
schedules based on our audit.
We conducted our audit 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 audit provides 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, 1998, and the changes in net assets available for benefits for the
period from September 1, 1998 (inception), to December 31, 1998, in conformity
with generally accepted accounting principles.
Our audit was 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 and reportable transactions 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
presented in Exhibit I is presented for purposes of additional analysis rather
than to present the changes in net assets available for benefits of each fund.
The supplemental schedules and fund information have been subjected to the
auditing procedures applied in the audit 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.
/s/ ARTHUR ANDERSEN LLP
Washington, D.C.
April 23, 1999
<PAGE>
U.S. GENERATING COMPANY
401(k) PROFIT-SHARING PLAN
FOR BARGAINING UNIT EMPLOYEES
Statement of Net Assets Available for Benefits
as of December 31, 1998
<TABLE>
<CAPTION>
1998
----------------
<S> <C>
ASSETS:
Investments:
Investments at Fair Value $ 3,856,578
Guaranteed Income Fund at Contract Value 736,436
Participant Loans 283,229
----------------
Total Investments 4,876,243
Employer Contributions Receivable 8,279
Employee Contributions Receivable 14,222
----------------
TOTAL ASSETS 4,898,744
----------------
LIABILITIES: 1,028
----------------
NET ASSETS AVAILABLE FOR BENEFITS $ 4,897,716
================
The accompanying notes are an integral part of these Financial Statements.
</TABLE>
<PAGE>
U.S. GENERATING COMPANY
401(k) PROFIT-SHARING PLAN
FOR BARGAINING UNIT EMPLOYEES
Statement of Changes in Net Assets Available for Benefits
for the Period from September 1, 1998 (Inception) through December 31, 1998
<TABLE>
<CAPTION>
1998
------------------
<S> <C>
INCREASE IN NET ASSETS ATTRIBUTABLE TO:
Employer Contributions $ 342,706
Employee Contributions 581,503
Employee Rollovers 3,534,266
Interest and Dividend income 7,624
Net Appreciation in Fair Value of Investments 453,631
------------------
TOTAL INCREASE 4,919,730
------------------
DECREASE IN NET ASSETS ATTRIBUTABLE TO:
Benefits Paid to Participants 22,014
------------------
TOTAL DECREASE 22,014
------------------
NET INCREASE DURING THE PERIOD 4,897,716
NET ASSETS AVAILABLE FOR BENEFITS:
BEGINNING OF PERIOD -
------------------
END OF PERIOD $ 4,897,716
==================
The accompany notes are an intregral part of these Financial Statements
</TABLE>
<PAGE>
U.S. GENERATING COMPANY
401(k) PROFIT-SHARING PLAN
FOR BARGAINING UNIT EMPLOYEES
Notes to Financial Statements
December 31, 1998
(1) DESCRIPTION OF THE PLAN
The following description of the U.S. Generating Company 401(k) Profit-Sharing
Plan for Bargaining Unit Employees (the "Plan") provides only general
information. Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
General
U.S. Generating Company ("the Company") acquired certain assets of New England
Electric System ("NEES") on September 1, 1998. The Plan was established by the
Company on September 1, 1998, to provide retirement, death, and disability
benefits for eligible union employees transferred to the Company's payroll as a
result of this transaction. The Plan is a defined contribution plan covering
all employees of the Company that are covered by a collective bargaining
agreement that specifically provides for their participation in the Plan. The
Plan is subject to the provisions of the Employee Retirement Income Security Act
of 1974 ("ERISA").
Effective November 17, 1997 the Board of Directors of PG&E Corporation (the
Corporation), the Company's parent company, established the Employee Benefits
Committee (EBC) to have oversight over the administration and financial
management of all affiliated company plans. The Company provides administrative
support to the EBC to handle the day-to-day financial administration. The EBC
reserves express authority over all decision making on behalf of the Plan. The
EBC retains CIGNA Retirement and Investment Services/Connecticut General Life
Insurance Company (CIGNA) as the Trustee of the Plan.
Effective December 17, 1998, the U.S. Generating Company Trust Agreement was
amended in order to provide for the availability of the PG&E Corporation Stock
Fund ("Corporation Stock Fund"). As a result of this amendment, participants
are eligible to invest in any one or more of the Investment Funds (including the
Corporation Stock Fund). Any withdrawals from the Corporation Stock Fund will
be paid in the form of whole units, unless the participant elects to receive
some or all of such amounts in cash.
Eligibility
New employees hired after September 1, 1998, are eligible for participation in
the Plan on their employment commencement date. Former employees of NEES were
eligible for participation in the Plan on September 1, 1998 (see vesting
paragraph for discussion of years of service earned).
Contributions
Participants may make tax-deferred cash contributions of up to 10 percent of
annual compensation on a pretax basis, and up to 5 percent of annual
compensation on an after-tax basis. Participants may also contribute amounts
representing distributions from other qualified defined benefit or contribution
plans. The Company matches pre-tax employee contributions up to 5 percent of
each employee's base compensation. Contributions are subject to certain
limitations provided by the Internal Revenue Code (the "Code"). As provided by
the Code, pretax employee contributions may not exceed $10,000 for 1998, and
total contributions to a participant's account may not exceed the lesser of 25%
of compensation or $30,000 for each year.
4
<PAGE>
U.S. GENERATING COMPANY
401(k) PROFIT-SHARING PLAN
FOR BARGAINING UNIT EMPLOYEES
Notes to Financial Statements
December 31, 1998
(1) Description of Plan (cont.)
Participant Accounts
Individual accounts are maintained for each of the Plan's participants and each
account is credited with their elective contribution, the Company's matching
contribution and an allocation of the Plan's net earnings and administrative
expenses. Allocations are based on participant account balances as defined in
the Plan Agreement.
Vesting
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the employer's contribution portion of their accounts (plus
actual earnings thereon) is based on years of continuous service. If a
participant's employment with the Company ends for any reason other than
retirement, permanent disability, or death, he or she will vest in the balances
in their account based on total years of service with the Company and such non-
vested portions of such participant's account will be forfeited. Participants
vest 40% upon completion of two years of service and an additional 20% per year
for each year thereafter. Participants are 100% vested after five years of
continuous service.
The years of service earned by eligible union employees while working at NEES
are included in determining years of service under this Plan.
Forfeitures
Forfeited balances or terminated participants' nonvested accounts are used to
reduce future Company contributions. At December 31, 1998, there were no
forfeited balances.
Investment Options
CIGNA, the Plan's trustee, is responsible for maintaining and investing Plan
assets, as directed by participants. Investment options available to
participants as of December 31, 1998 included the following:
. CIGNA Actively Managed Fixed Income Account-This account is designed to
outperform benchmark and comparable actively managed funds over full
market cycles through investments primarily in high quality corporate
and Federal government fixed income securities.
. CIGNA Founders Balanced Account-This CIGNA separate account invests
solely in the Founders Balanced Fund. The objective of this fund is to
provide the investor with a combination of growth, income, and capital
preservation through investments in stocks, bonds, and short-term
investments.
. CIGNA Stock Market Index Account-This account is designed to provide
long-term growth of capital and income through investments in stocks in
the S&P 500 Index.
. CIGNA Founders Growth Account-This CIGNA separate account invests solely
in the Founders Growth Fund. The objective of this fund is to provide
long-term growth of capital, primarily through investments in domestic
common stocks of companies with strong performance records, solid market
positions, reasonable financial strength, and continuous operating
records of at least three years.
5
<PAGE>
U.S. GENERATING COMPANY
401(k) PROFIT-SHARING PLAN
FOR BARGAINING UNIT EMPLOYEES
Notes to Financial Statements
December 31, 1998
(1) Description of Plan (cont.)
. CIGNA Fidelity Growth & Income Account-This CIGNA separate account
invests solely in the Fidelity Growth & Income Portfolio. The objective
of this portfolio is to seek a high total return through a combination
of capital appreciation and current income by primarily investing in
equity securities of companies currently paying dividends.
. CIGNA PBHG Growth Account-This CIGNA separate account invests solely in
the PBHG Growth Fund. The objective of this fund is to provide capital
appreciation through investments in common stocks and convertible stocks
of small- and medium-sized growth companies that trade in the United
States or Canada on registered exchanges or in the over-the-counter
market.
. CIGNA AIM Constellation Account-This CIGNA separate account invests
solely in the AIM Constellation Fund. The objective of this fund is to
provide capital appreciation through investments in common stocks, with
emphasis on medium-sized and smaller emerging growth companies.
. CIGNA Templeton Foreign Account-This CIGNA separate account invests
solely in the Templeton Foreign Fund. The objective of this fund is to
provide long-term capital growth through a flexible policy of investing
in stocks and, to a lesser extent, debt obligations of companies and
governments outside the United States.
. CIGNA Guaranteed Income Fund-This fund is designed to preserve capital
and produce attractive fixed-income returns through investments
primarily in high quality, fixed income instruments such as
intermediate-term bonds and commercial mortgages.
. PG&E Corporation Stock Fund*-This fund invests in PG&E Corporation
common stock, which is listed on the New York Stock Exchange under the
symbol "PCG." Participants "own" stock held in the Fund that make up
approximately 99% of their account invested in the Fund. Each
participant has proxy-voting rights for their shares and receives any
dividend on the shares in their account. U.S. Generating Company is a
wholly owned subsidiary of PG&E Corporation.
*Although this fund became available as an investment option to
participants on December 17, 1998, no amounts were directed by
participants to this fund as of December 31,1998.
Participant Loans
Participants may borrow from vested funds credited to their individual accounts.
The amount borrowed, when added to any outstanding loans that the participant
may have under the Company's retirement plan, cannot exceed the lesser of 50
percent of the participant's total vested account balance, or $50,000, reduced
by the participant's highest outstanding loan balance for the year. In no event
can the participant borrow more than $50,000. Loans for the purchase of a
residence are for a period up to 15 years; all other loans are for a period not
exceeding 5 years. All loans bear interest at a rate comparable with the prime
rate. Loans are secured by 50 percent of the value of the employee's account.
6
<PAGE>
U.S. GENERATING COMPANY
401(k) PROFIT-SHARING PLAN
FOR BARGAINING UNIT EMPLOYEES
Notes to Financial Statements
December 31, 1998
(1) Description of Plan (cont.)
Retirements and Terminations
In the case of normal retirement, retirement due to permanent disability, or
termination of employment, a participant's benefits shall be paid in the form of
a lump-sum distribution or in monthly, quarterly, or annual installment
payments, not to exceed the life expectancy of the participant or designated
beneficiary. However, participants in the Plan prior to January 1, 1995, may
elect a single life annuity (if not married) or a qualified joint- and-survivor
annuity (if married). If a participant dies before retirement, the beneficiary
will receive the value of the participant's vested account balance in a lump-sum
distribution or in monthly, quarterly, or annual installment payments, not to
exceed the life expectancy of the beneficiary.
Plan Termination
The Corporation's Board of Directors reserves the right to amend or terminate
the Plan at any time subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100 percent vested in their accounts and
will receive full payment of the balance in their accounts. No plan assets may
revert to the Company or the Corporation.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting and Use of Estimates
The financial statements of the Plan have been prepared based upon generally
accepted accounting principles. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Investment Valuation and Income Recognition
All investments (other than the Guaranteed Income Fund and the Participant
Loans) are stated at fair value based on published market quotations. Fair
value of shares is determined by quoted prices in an active market. Investments
in the Guaranteed Income Fund are stated at contract value (Note 3) and
Participant Loans are stated at cost, both of which approximates fair value.
Interest income is recognized as it is earned and dividends are recorded on the
exdividend date.
Net appreciation (depreciation) in fair value of investments consists of the net
change in unrealized appreciation (depreciation) during the year on investments
held at the end of the year and the realized gain or loss on the sale of
investments during the year.
Purchases and sales of securities are recorded on a trade date basis. Realized
gains and losses from security transactions are reported on the moving averages
basis.
Payment of Benefits
Benefit payments are recorded when paid.
7
<PAGE>
U.S. GENERATING COMPANY
401(k) PROFIT-SHARING PLAN
FOR BARGAINING UNIT EMPLOYEES
Notes to Financial Statements
December 31, 1998
(2) Summary of Significant Accounting Policies (cont.)
Contributions Receivable
Contributions receivable are the amounts due, as of the financial statement
date, to the Plan from the Company and participants for completed pay-periods.
Administrative Expenses
Except to the extent paid by the Company, administrative expenses of the Plan
are paid out of the Plan's assets and charged against each participant's account
in the same proportion as the participant's account bears to the total balance
of all participant accounts.
(3) INVESTMENTS
General
Each investment fund is managed by the Trustee, which has discretionary
investment authority over the funds. Neither the Company nor the Corporation
has authority over how each fund is managed or invested. The EBC reserves the
authority, however, to instruct the Trustee on which investment funds to retain.
Fund Information
Total investments were comprised of the following balances as of December 31,
1998:
<TABLE>
<CAPTION>
<S> <C>
CIGNA Actively Managed Fixed Income Account $ 113,083
CIGNA Founders Balanced Account 284,447 *
CIGNA Fidelity Growth & Income Account 1,445,105 *
CIGNA Stock Market Index Account 702,293 *
CIGNA Founders Growth Account 536,359 *
CIGNA PBHG Growth Account 297,487 *
CIGNA AIM Constellation Account 360,094 *
CIGNA Templeton Foreign Account 117,710
----------
Investments at Fair Value 3,856,578
CIGNA Guaranteed Income Fund 736,436 *
Participant Loans 283,229 *
----------
TOTAL INVESTMENTS 4,876,243
----------
</TABLE>
* Investment funds representing 5% or more of the Plan's net assets.
The accompanying Exhibit I provides a summary of the Plan's changes in net
assets by investment options for the period from September 1, 1998 (inception)
through December 31, 1998.
8
<PAGE>
U.S. GENERATING COMPANY
401(k) PROFIT-SHARING PLAN
FOR BARGAINING UNIT EMPLOYEES
Notes to Financial Statements
December 31, 1998
(3) Investments (cont.)
Guaranteed Income Fund
In 1998, the Plan entered into a guaranteed investment contract with CIGNA.
CIGNA maintains the contributions in a pooled account. The account is credited
with earnings on the underlying investments and charged for Plan withdrawals and
administrative expenses charged by CIGNA. The contract is included in the
financial statements at contract value (which represents contributions made
under the contract, plus earnings, less withdrawals and administrative expenses)
because it is fully benefit responsive. For example, participants may ordinarily
direct the withdrawal or transfer of all or a portion of their investment at
contract value. There are no reserves against contract value for credit risk of
the contract issuer or otherwise. The contract value of the guaranteed
investment contract approximates the fair value. The average yield and crediting
interest rate were approximately 5.7 percent for 1998. The crediting interest
rate was approximately 5.7 percent at December 31, 1998. The crediting interest
rate may be changed by CIGNA semi-annually and is based on an agreed-upon
formula between the Plan and CIGNA, but cannot be less than zero.
Financial Investments with Off-Balance Sheet Risk
The EBC has adopted a "Position Statement on Risk Management and the Use of
Derivatives" which applies to the Plan. This statement recognizes that
derivatives be used by the Plan's investment managers to achieve their
investment objectives. However, the Plan assets will not be exposed to risks
through derivatives that would be inappropriate in their absence. At December
31, 1998, the Plan held no direct investments in derivatives.
(4) RELATED-PARTY TRANSACTIONS
Certain Plan investments are shares of separate accounts managed by CIGNA.
CIGNA is the trustee as defined by the Plan, and therefore, these transactions
qualify as party-in-interest. Fees paid by the Plan for the investment
management services amounted to $1,001 for the period from September 1, 1998
(inception) through December 31, 1998.
(5) TAX STATUS
The Company has not yet solicited or received documentation from the IRS stating
that the Plan and related trust are designed in accordance with applicable
sections of the Code. However, the Plan administrator and the Plan's tax
counsel believe that the Plan is designed and is currently being operated in
compliance with the applicable requirements of the Code. The Plan is required
to solicit the IRS determination letter by December 31, 2001.
9
<PAGE>
Exhibit 1
U.S. GENERATING COMPANY
401(k) PROFIT-SHARING PLAN
FOR BARGAINING UNIT EMPLOYEES
Statement of Changes in Net Assets Available for Benefits
for the Period from September 1, 1998 (Inception) through December 31, 1998
<TABLE>
<CAPTION>
Fund Information
-------------------------------------------------------------------------------------------------------------
CIGNA CIGNA
Actively CIGNA CIGNA CIGNA CIGNA CIGNA Partici-
Managed CIGNA Stock CIGNA Fidelity CIGNA ATM Temple- Guaran- pant
Fixed Founders Market Founders Growth & PBHG Constel- ton teed Notes
Income Balanced Index Growth Income Growth lation Foreign Income Receiv-
Account Account Account Account Account Account Account Account Fund able Other Total
-------- -------- ------- -------- -------- ------- ------- ------- -------- ------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE IN
NET ASSETS
ATTRIBUTABLE
TO:
Employer
Contributions $ 9,467 $ 17,224 $ 74,200 $ 44,528 $ 34,307 $ 16,242 $ 19,607 $ 7,732 $ 111,120 $ - $ 8,279 $ 342,706
Employee
Contributions 15,514 29,236 125,109 77,961 57,401 27,958 32,629 12,501 188,972 - 14,222 581,503
Employee
Rollovers 86,849 242,505 1,092,729 525,248 355,646 191,758 236,841 99,849 702,841 - - 3,534,266
Interest and
Dividend
Income - 170 445 167 89 132 46 8 6,567 - - 7,624
Net Appreciation
in Fair Value
of Investments 699 13,236 175,369 78,558 68,319 61,438 52,953 3,059 - - - 453,631
-------- -------- ---------- -------- -------- -------- -------- -------- --------- -------- ------- ----------
Total
Increase 112,529 302,371 1,467,852 726,462 515,762 297,528 342,076 123,149 1,009,500 - 22,501 4,919,730
DECREASE IN NET
ASSETS
ATTRIBUTABLE
TO:
Benefits
Paid to
Participants - 1,959 6,388 236 3,116 2,226 2,088 4,771 202 - 1,028 22,014
-------- -------- ---------- -------- -------- -------- -------- -------- --------- -------- ------- ----------
Total
Decrease - 1,959 6,388 236 3,116 2,226 2,088 4,771 202 - 1,028 22,014
NET INCREASE
(DECREASE)
BEFORE
INTERFUND
TRANSFERS 112,529 300,412 1,461,464 726,226 512,646 295,302 339,988 118,378 1,009,298 - 21,473 4,897,716
INTERFUND
TRANSFERS 554 (15,965) (16,359) (23,933) 23,713 2,185 20,106 (668) (272,862) 283,229 - -
-------- -------- ---------- -------- -------- -------- -------- -------- --------- -------- ------- ----------
NET INCREASE
(DECREASE)
AFTER
INTERFUND
TRANSFERS 113,083 284,447 1,445,105 702,293 536,359 297,487 360,094 117,710 736,436 283,229 21,473 4,897,716
NET ASSETS
AVAILABLE
FOR BENEFITS:
BEGINNING OF
PERIOD - - - - - - - - - - - -
-------- -------- ---------- -------- -------- -------- -------- -------- --------- -------- ------- ----------
END OF PERIOD $113,083 $284,447 $1,445,105 $702,293 $536,359 $297,487 $360,094 $117,710 $736,436 $283,229 $21,473 $4,897,716
======== ======== ========== ======== ======== ======== ======== ======== ========= ======== ======= ==========
</TABLE>
<PAGE>
U.S. GENERATING COMPANY
401(k) PROFIT-SHARING PLAN
FOR BARGAINING UNIT EMPLOYEES
Line 27(a)-Schedule of Assets Held for Investment Purposes
As of December 31, 1998
Schedule I
<TABLE>
<CAPTION>
Fair Market
Investments Description Cost Value
----------- ----------- ----------- -------------
<S> <C> <C> <C>
CIGNA Actively Managed Fixed
Income Account* Separate Account $ 110,766 $ 113,083
Founders Balanced Account* Separate Account 268,454 284,447
CIGNA Stock Market Index
Account* Separate Account 619,063 702,293
Founders Growth Account* Separate Account 464,207 536,359
Fidelity Growth & Income Separate Account 1,262,058 1,445,105
Account*
PBHG Growth Account* Separate Account 237,347 297,487
AIM Constellation Account* Separate Account 304,937 360,094
Templeton Foreign Account* Separate Account 113,482 117,710
CIGNA Guaranteed Income Fund* Guaranteed Investment Contract 736,436 736,436
Participant Loan Fund* Participant loans other than 283,229 283,229
(interest rates at 9.2%) mortgages ---------- ----------
Total $4,399,979 $4,876,243
========= =========
</TABLE>
*Represents party-in-interest.
11
<PAGE>
U.S. GENERATING COMPANY
401(k) PROFIT-SHARING PLAN
FOR BARGAINING UNIT EMPLOYEES
Line 27(d) Schedule of Reportable Transactions
For the Period from September 1, 1998 (Inception) through December 31, 1998
Schedule II
<TABLE>
<CAPTION>
Net Market
Value
Purchases Sales Gain
-------------------------- ------------------------ -----------
Number of Cost of Number of Proceeds
Identity of Issue Transactions Purchases Transactions from Sales
- ---------------------------- ------------ --------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C>
Founders Balanced Account* 29 299,428 10 31,664 690
CIGNA Stock Market Index 36 665,808 13 50,677 3,932
Account*
Founders Growth Account* 33 492,933 10 31,185 2,460
Fidelity Growth & Income 43 1,365,336 15 110,690 7,411
Account*
PBHG Growth Account* 29 276,269 10 43,374 4,452
AIM Constellation Account* 31 328,965 7 25,660 1,632
CIGNA Guaranteed Income Fund* 27 1,003,657 26 273,523 --
--------- ------- -----
Total $4,432,396 $566,773 $20,577
========= ======= ======
</TABLE>
*Represents party-in-interest.
12
<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 report dated April 23, 1999 included in this Form 11-K relating to the U.S.
Generating Company 401(k) Profit- Sharing Plan for Bargaining Unit Employees,
into PG&E Corporation's previously filed Registration Statement File Nos.
333-69437.
ARTHUR ANDERSEN LLP
Washington, D.C.
June 23, 1999
