SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: March 24, 1999
Exact Name of
Commission Registrant State or other IRS Employer
File as specified Jurisdiction of Identification
Number in its charter Incorporation Number
- ----------- -------------- --------------- --------------
1-12609 PG&E Corporation California 94-3234914
1-2348 Pacific Gas and California 94-0742640
Electric Company
Pacific Gas and Electric Company PG&E Corporation
77 Beale Street, P.O. Box 770000 One Market, Spear Tower, Suite 2400
San Francisco, California 94177 San Francisco, California 94105
(Address of principal executive offices) (Zip Code)
Pacific Gas and Electric Company PG&E Corporation
(415) 973-7000 (415) 267-7000
(Registrant's telephone number, including area code)
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Item 5. Other Events
The statements below about the amount of return Pacific Gas and
Electric Company may be authorized to earn on its assets and recover
from ratepayers in 1999 are forward-looking statements. These
forward-looking statements are subject to a number of risks and
uncertainties that could cause actual results to differ materially,
including those factors discussed below.
On March 23, 1999, an administrative law judge (ALJ) of the
California Public Utilities Commission (CPUC) issued a proposed
decision in Pacific Gas and Electric Company's 1999 Cost of Capital
proceeding before the CPUC. (Pacific Gas and Electric Company is the
utility subsidiary of PG&E Corporation.) The proposed decision, if
approved by the CPUC, would be retroactive to January 1, 1999.
However, the proposed decision is subject to change prior to the
final vote of the CPUC. The CPUC may adopt all or part of it as
written, amend, or modify it, or set it aside and prepare its own
decision. The proposed decision is currently scheduled to be
considered by the CPUC at its April 22, 1999 decision conference.
The CPUC may act then, or it may postpone action until a later date.
The ALJ's proposed decision recommends a return on common equity
(ROE) of 10.6% for Pacific Gas and Electric Company's electric
distribution and gas distribution assets, and an overall return on
utility rate base of 8.75% in 1999. The proposed decision does not
recommend any change to the currently authorized utility capital
structure of 46.2% long-term debt, 5.8% preferred stock, and 48%
common equity.
Pacific Gas and Electric Company had requested an ROE of 12.1% and an
overall return on rate base of 9.53% for its electric and gas
distribution assets, as opposed to its currently adopted 1998 bundled
ROE of 11.2% and overall return of 9.17%. Other parties, notably the
CPUC's Office of Ratepayer Advocates (ORA), had recommended lower
rates of return. The table below shows the current authorized rates,
the requested rates, ORA's recommended rates, and the ALJ's proposed
rates:
1998 1999 1999 ORA 1999 ALJ
Authorized Requested Recommendation Proposed
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Long-term debt 7.36% 7.24% 7.19% 7.09%
Preferred stock 6.65% 6.50% 6.50% 6.55%
Common stock (ROE) 11.20% 12.10% 8.64%(1) 10.60%(2)
Overall Return
on Rate Base (3) 9.17% 9.53% 7.85% 8.75%
(1) For electric distribution only. ORA recommended a return on
common equity of 9.32% and an overall return on utility rate base of
8.17% for Pacific Gas and Electric Company's gas distribution
operations.
(2) For both electric and gas distribution.
(3) Based upon a utility capital structure of 46.2% long-term debt,
5.8% preferred stock, and 48% common equity.
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By itself, the proposed decision would reduce Pacific Gas and
Electric Company's base revenues in 1999 by $46.3 million and $14.5
million for electric and gas distribution, respectively, based on the
amount of rate base proposed by the utility in its 1999 General Rate
Case (GRC) proceeding at the CPUC. However, the total change in
Pacific Gas and Electric Company's base revenues in 1999 will be
determined by a combination of the final outcomes of the cost of
capital proceeding, the GRC proceeding, and other CPUC proceedings.
A proposed decision in the GRC proceeding is currently expected in
April 1999. In light of the current rate freeze, decreases in base
revenues would increase the amount of revenues available to recover
transition costs (certain generation-related costs which prove to be
uneconomic under the new competitive electric generation market).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrants have duly caused this report to be signed on their
behalf by the undersigned thereunto duly authorized.
PG&E CORPORATION
and
PACIFIC GAS AND ELECTRIC COMPANY
/s/ LESLIE H. EVERETT
By ________________________________
LESLIE H. EVERETT
Vice President and Secretary
(PG&E Corporation)
Vice President and Secretary
(Pacific Gas and Electric Company)
Dated: March 24, 1999
