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: December 1, 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
Performance Goals and Implementation Strategy
PG&E Corporation's National Energy Group consists of four lines of
business that provide a wide range of energy products and services
through its wholesale and retail business operations. (PG&E
Corporation's other business consists of providing regulated
electric and gas distribution and transmission services in Northern
and Central California through its subsidiary, Pacific Gas and
Electric Company (Utility).) The Corporation's primary target
performance goal is for the Corporation's consolidated earnings to
grow at a rate of between eight to ten percent compounded annually.
The Corporation's secondary target performance goal is for the
National Energy Group to contribute 30 percent to the Corporation's
consolidated earnings by the end of 2002. The Corporation's
strategies to achieve these goals include, among others, increasing
national market presence, asset growth through acquisition and
development, and the continuing critical evaluation of the mix of
businesses within the National Energy Group to achieve optimal
integration and maximize corporate earnings.
As a result of this critical evaluation of its business mix, PG&E
Corporation currently is investigating the possible sale of the Texas-
based pipeline and liquids business operations of its PG&E Gas
Transmission line of business. In Texas, the PG&E Gas Transmission
line of business owns and operates approximately 8,000 miles of
natural gas pipeline, over 500 miles of natural gas liquids pipeline,
and nine natural gas processing plants. The Corporation has retained
Lehman Brothers to assist in providing financial advice and
assistance in evaluating a possible sale. Depending upon the level of
interest, the Corporation would consider proceeding with a sale of
all or a portion of the current operations, or pursuing other
alternatives which could involve the retention of all or a portion of
the current operations, and/or the transfer of all or a portion of
the operations by way of a strategic business combination with a
third party. To the extent that the ultimate disposition of the
operations results in an accounting recognition of a value of the
assets below their book value (including goodwill) of approximately
$2.5 billion, the Corporation would recognize a loss.
Cautionary Statement Regarding Forward-looking Statements
The discussion above contains forward-looking statements about PG&E
Corporation's goals and objectives for future financial performance
and its strategies to achieve those goals and objectives, including
anticipated annual growth in corporate earnings, a targeted increase
in the proportion of corporate earnings derived from the National
Energy Group, strategies to improve the financial performance of the
National Energy Group, and factors expected to impact earnings,
among other statements. These statements are based on the beliefs
and assumptions of management which management believes are
reasonable and on information currently available to management.
These statements involve risks and uncertainties that could cause
actual results to differ materially from those currently expected or
sought by PG&E Corporation. Although the Corporation is not able to
predict all the factors that may cause actual results to differ,
some of the factors include: when the Utility's transition cost
recovery is completed and the current electric rate freeze
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ends; future Diablo Canyon operating costs; the number and length of
refueling outages at Diablo Canyon; future market prices for
electricity; the method and timing of disposition and valuation of
the Utility's hydroelectric generation assets; the outcome of
various regulatory proceedings, including the Utility's 1999 General
Rate Case and performance-based ratemaking proceeding pending at the
California Public Utilities Commission; the pace and extent of the
ongoing restructuring of the electric and gas industries across the
United States; increasing competition in the energy markets; the
successful integration and performance of acquired assets;
fluctuations in commodity gas and electric prices and the
Corporation's ability to successfully manage such price
fluctuations; the extent of anticipated growth of transmission and
distribution services in the Utility's service territory; the
ability of management to identify and pursue new investment
opportunities; the success of management's strategies to maximize
shareholder value in the Corporation's National Energy Group which
may include acquisitions or disposition of assets or internal
restructuring; the extent to which current or planned generation
development projects are completed and the pace and cost of such
completion; and other factors discussed in the Corporation and the
Utility's reports filed with the Securities and Exchange Commission.
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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
CHRISTOPHER P. JOHNS
By
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CHRISTOPHER P. JOHNS
Vice President and Controller
(PG&E Corporation)
Vice President and Controller
(Pacific Gas and Electric Company)
Dated: November 30, 1999
