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 8, 2000
Exact Name of
Commission Registrant State or other IRS Employer
File as specified Jurisdiction of Identification
Number in its charter Incorporation Number
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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
A. Valuation of Pacific Gas and Electric Company's Hydroelectric Generating
Assets
On December 5, 2000, Pacific Gas and Electric Company (Utility), the
California subsidiary of PG&E Corporation, submitted updated testimony in the
Utility's proceeding pending before the California Public Utilities Commission
(CPUC) to determine the market value of its hydroelectric generating assets.
The testimony was submitted pursuant to a CPUC ruling which re-opened the
hydroelectric valuation proceeding to obtain more information from parties
about market valuation in light of the different market conditions experienced
during the summer of 2000. The Utility's updated testimony indicates that the
market value of the hydroelectric assets ranges from $3.9 billion to $4.2
billion assuming that the assets were sold in a competitive auction or other
arm's-length sale.
Updated joint testimony was also submitted by the CPUC's Office of Ratepayer
Advocates (ORA), The Utility Reform Network (TURN), and the California Farm
Bureau Federation (CFBF). These parties had previously submitted joint
testimony in which they recommended a valuation of $2.665 billion. Their
updated testimony estimates that recent higher market prices result in an
increase in the value of the assets by approximately $943 million although
they do not recommend any change to their previous valuation of $2.665
billion. Instead, they recommend that ratepayers receive all future operating
profits from hydroelectric generation operations, which, based on higher price
forecasts, will ensure that ratepayers obtain the full value of the assets.
Further, the joint parties recommend that the amount of the final market
valuation that exceeds book value be used to reduce the Utility's under-
collected wholesale power purchase costs recorded in the Utility's regulatory
balancing account (the Transition Revenue Account or TRA), rather than
crediting the Utility's regulatory balancing account used to track recovery of
transition costs (the Transition Cost Balancing Account or TCBA). The Utility
intends to oppose this proposal as it would unlawfully delay the completion of
transition cost recovery by the Utility as well as delay the end of the rate
freeze.
The Utility expects evidentiary hearings in the valuation proceeding to be
scheduled for next year.
B. Pacific Gas and Electric Company's Rate Stabilization Plan
On December 7, 2000, the president of the CPUC, as the commissioner assigned
to the Utility's proceeding to consider its recently filed application to
adopt a rate stabilization plan, issued a procedural ruling suspending the
schedule in the proceeding until further notice. The ruling noted that the
CPUC has not yet ruled on the Utility's pending generation divestiture and
market valuation applications. The ruling stated that the Utility's
application for approval of its rate stabilization plan is premature because
the CPUC has not yet made a determination that the rate freeze can end based
upon the Utility's estimated market valuation of its hydroelectric assets nor
has the CPUC determined that the rate freeze has ended. The ruling suspended
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proceedings to consider the Utility's application until the CPUC provides
further guidance by disposing of the Utility's pending divestiture and market
valuation proceedings. The ruling also stated that the Utility's proposed
rates under its rate stabilization plan cannot become effective on January 1,
2001, as proposed, without further action of the CPUC. A similar procedural
ruling was issued the same day in a proceeding involving Southern California
Edison's similar rate stabilization plan application.
C. CPUC's Post Transition Period Ratemaking Decision
On November 21, 2000, the California Supreme Court denied the Utility's
petition seeking review of an appellate decision which had denied the
Utility's appeal of the CPUC's October 1999 decision that prohibits the
Utility from recovering under-collected wholesale power purchase costs
incurred before the Utility completed its transition cost recovery after the
transition period ends.
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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
By LESLIE H. EVERETT
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LESLIE H. EVERETT
Vice President and Corporate Secretary
PACIFIC GAS AND ELECTRIC COMPANY
By LESLIE H. EVERETT
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LESLIE H. EVERETT
Vice President and Corporate Secretary
Dated: December 8, 2000
