<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 10-Q
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN
GENERAL INSTRUCTION H 1(A) AND (B) OF FORM 10-Q AND
IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
COMMISSION FILE NUMBER 333-30715
---------
CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK
SPECIAL PURPOSE TRUST PG&E-1
----------------------------
(Issuer of the Certificates)
PG&E Funding LLC
----------------
(Exact name of Registrant as Specified in its Charter)
Delaware 94-3274751
-------- ----------
(State or Other Jurisdiction of (IRS Employer Identification Number)
Incorporation or Organization)
245 Market Street, Room 424, San Francisco, California 94105
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 972-5467
-------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]. No___.
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
PG&E FUNDING LLC
BALANCE SHEET (IN THOUSANDS)
<TABLE>
<CAPTION>
Balance at March 31, December 31,
1998 1997
-------------------- ------------------
ASSETS
- ------
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 1,326 $ 5,188
Current portion of Transition Property receivable 342,049 301,288
---------- ----------
TOTAL CURRENT ASSETS 343,375 306,476
NONCURRENT ASSETS:
Restricted funds 14,845 14,405
Transition Property receivable 2,537,028 2,602,080
Unamortized debt issuance expenses 18,651 19,813
---------- ----------
TOTAL NONCURRENT ASSETS 2,570,524 2,636,298
TOTAL ASSETS $2,913,899 $2,942,774
========== ==========
LIABILITIES AND MEMBER'S EQUITY
- -------------------------------
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 1,159 $ 3,468
Interest payable 3,024 11,653
Current portion of long-term debt 106,301 125,000
---------- ----------
TOTAL CURRENT LIABILITIES 110,484 140,121
Long-term debt 2,775,597 2,775,575
---------- ----------
TOTAL LIABILITIES 2,886,081 2,915,696
MEMBER'S EQUITY 27,818 27,078
---------- ----------
TOTAL LIABILITIES AND MEMBER'S EQUITY $2,913,899 $2,942,774
========== ==========
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
statement.
2
<PAGE>
<TABLE>
<CAPTION>
PG&E FUNDING LLC
STATEMENT OF INCOME AND CHANGES IN MEMBER'S EQUITY (IN THOUSANDS)
FOR THE THREE MONTHS ENDED MARCH 31, 1998
----
INCOME
- ------
<S> <C>
Income from Transition Property receivable $50,901
Interest income 453
-------
TOTAL INCOME 51,354
EXPENSES
- --------
Interest expense 46,768
Servicing fees 1,812
Administrative and general 24
-------
TOTAL EXPENSES 48,604
NET INCOME $ 2,750
Member's equity at December 31, 1997 27,078
Member's distributions (2,010)
-------
MEMBER'S EQUITY AT MARCH 31, 1998 $27,818
=======
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
statement.
3
<PAGE>
<TABLE>
<CAPTION>
PG&E FUNDING LLC
CONDENSED STATEMENT OF CASH FLOWS (IN THOUSANDS)
FOR THE THREE MONTHS ENDED MARCH 31, 1998
----
<S> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 17,287
--------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt (18,699)
Equity distributions to Member (2,010)
Net change in restricted funds (440)
--------
NET CASH USED IN FINANCING ACTIVITIES (21,149)
--------
NET CHANGE IN CASH AND CASH EQUIVALENTS (3,862)
CASH AND CASH EQUIVALENTS AT DECEMBER 31, 1997 5,188
--------
CASH AND CASH EQUIVALENTS AT MARCH 31, 1998 $ 1,326
========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ 54,211
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
statement.
4
<PAGE>
Notes to Financial Statements
- -----------------------------
A. Basis of Presentation
This Quarterly Report on Form 10-Q includes the financial statements of PG&E
Funding LLC, a Delaware special purpose limited liability company, whose sole
member is Pacific Gas and Electric Company, a wholly owned subsidiary of PG&E
Corporation. This quarterly report should be read in conjunction with PG&E
Funding LLC's Financial Statements and Notes to Financial Statements included in
its 1997 Annual Report on Form 10-K.
PG&E Funding LLC believes that the accompanying statements reflect all
adjustments that are necessary to present a fair statement of the financial
position and results of operations for the interim period. All material
adjustments are of a normal recurring nature unless otherwise disclosed in this
Form 10-Q. Results of operations for interim periods are not necessarily
indicative of results to be expected for a full year.
PG&E Funding LLC was organized for the limited purposes of issuing Notes and
holding and servicing the Transition Property. Transition Property is the right
to be paid a specified amount (presented in the financial statements as
"Transition Property receivable") from a nonbypassable charge levied on
residential electric customers and small commercial electric customers. The
nonbypassable charge was authorized by the California Public Utility Commission
pursuant to the electric industry restructuring mandated by California Assembly
Bill 1890, as amended by California Senate Bill 477.
PG&E Funding LLC is a single-member limited liability company. Accordingly, all
federal income tax effects and all material State of California franchise tax
effects of PG&E Funding LLC's activities accrue to Pacific Gas and Electric
Company.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following analysis of the results of operations of PG&E Funding LLC
(the "Note Issuer") is in an abbreviated format pursuant to Instruction H of
Form 10-Q. Such analysis should be read in conjunction with the Financial
Statements included herein and the Financial Statements and Notes to Financial
Statements included in the Note Issuer's Annual Report on Form 10-K for the year
ended December 31, 1997.
The Note Issuer is a special purpose, single member limited liability
company organized in July 1997 for the limited purposes of holding and servicing
the Transition Property (as described below), issuing notes secured primarily by
the Transition Property and performing related activities. Pacific Gas and
Electric Company, as the sole member of the Note Issuer, owns all of the equity
securities of the Note Issuer. The Note Issuer's organizational documents
require it to operate in a manner such that it should not be consolidated in the
bankruptcy estate of Pacific Gas and Electric Company in the event Pacific Gas
and Electric Company becomes subject to such a proceeding.
In 1997, the Note Issuer acquired Transition Property and issued
$2,901,000,000 in principal amount of the PG&E Funding LLC Notes, Series 1997-1,
Class A-1 through Class A-8 (the "Notes"), with scheduled maturities ranging
from ten months to ten years and final maturities ranging from two to eleven
years. The Notes were issued pursuant to an Indenture dated December 8, 1997
between the Note Issuer and Bankers Trust Company of California, N.A., as
trustee (the "Indenture"). The Note Issuer sold the Notes to the California
Infrastructure and Economic Development Bank Special Purpose Trust PG&E-1, a
Delaware business trust (the "Trust"), which issued certificates corresponding
to each class of Notes (the "Certificates") in a public offering. The Note
Issuer entered into a servicing agreement (the "Servicing Agreement") with
Pacific Gas and Electric Company pursuant to which Pacific Gas and Electric
Company is required to service the Transition Property on behalf of the Note
Issuer.
The California Public Utilities Code (the "PU Code") provides for the
creation of "Transition Property." A financing order dated September 3, 1997
(the "Financing Order") issued by the California Public Utilities Commission
(the "CPUC"), together with the related Issuance Advice Letter, establishes,
among other things, separate nonbypassable charges (the "FTA Charges") payable
by residential electric customers and small commercial electric customers in an
aggregate amount sufficient to repay in full the Certificates, fund the
Overcollateralization Subaccount established under the Indenture and pay all
related costs and fees. Under the PU Code and the Financing Order, the owner of
Transition Property is entitled to collect FTA Charges until such owner has
received amounts sufficient to retire all outstanding series of Certificates and
cover related fees and expenses and the Overcollateralization Amount described
in the Financing Order.
In order to enhance the likelihood that actual collections with respect to
the Transition Property are neither more nor less than the amount necessary to
amortize the Notes in accordance with their expected amortization schedules, pay
all related fees and expenses, and fund certain accounts established pursuant to
the Indenture as required, the Servicing Agreement requires Pacific Gas and
Electric Company, as the Servicer of the Transition Property, to seek, and the
Financing Order and the PU Code require the CPUC to approve, periodic
adjustments to the FTA Charges. Such adjustments will be based on actual
collections and updated assumptions by the Servicer as to future usage of
electricity by specified customers, future expenses relating to the Transition
Property, the Notes and the Certificates, and the rate of delinquencies and
write-offs. The Servicer has not sought any such adjustments to date.
During the first quarter of 1998, income generated from the Transition
Property receivable was approximately $50,901,000. The Note Issuer also earned
approximately $453,000 in interest from other investments. Interest expense of
approximately $46,768,000 relates to interest on the Notes and the amortization
of debt issuance expenses and the discount on the Notes. The Note Issuer also
incurred servicing fees of approximately $1,812,000 and made a distribution of
approximately $2,010,000 to its member.
The Note Issuer uses collections of the Transition Property receivable to
make scheduled principal and interest payments on the Notes. Income earned on
the Transition Property receivable is expected to offset (1) interest expense on
the Notes, (2) amortization of debt issuance expenses and the discount on the
Notes and (3) the
6
<PAGE>
fees charged by Pacific Gas and Electric Company for servicing the Transition
Property and providing administrative services to the Note Issuer.
Collections of FTA Charges are currently meeting expectations. For the
first quarter of 1998, collections of approximately $75,192,000 resulted in a
surplus of approximately $77,000 after deducting scheduled principal and
interest payments on the Notes of approximately $72,910,000, payments of
approximately $1,842,000 for servicing fees and other expenses and approximately
$363,000 retained to fund the Overcollateralization Account established under
the Indenture. The surplus will be applied toward future payments on the Notes.
Management believes that it is reasonable to expect future collections of FTA
Charges to be sufficient to make scheduled payments on the Notes and pay related
expenses on a timely basis.
The Note Issuer does not expect any material adverse impact on the Note
Issuer or its financial position or results of operations as a result of any
inability of the computer systems that it relies on to recognize the year 2000.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable to the Note Issuer or the Trust.
PART II
OTHER INFORMATION
ITEM 5. OTHER INFORMATION.
The Quarterly Servicer's Certificate dated March 15, 1998 attached as
Exhibit 99.1 hereto includes certain additional information regarding
collections of FTA Charges.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits required to be filed by Item 601 of Regulation S-K:
3.1 Certificate of Formation.(1)
3.3 Amended and Restated Limited Liability Company Agreement.(1)
4.1 Note Indenture.(2)
4.2 Series Supplement.(2)
4.3 Note.(2)
4.4 Amended and Restated Declaration and Agreement of Trust.(2)
4.5 First Supplemental Trust Agreement.(2)
4.6 Rate Reduction Certificate.(2)
10.1 Transition Property Purchase and Sale Agreement.(2)
10.2 Transition Property Servicing Agreement.(2)
10.3 Note Purchase Agreement.(2)
10.4 Fee and Indemnity Agreement.(2)
27 Financial Data Schedule for the quarter ended
March 31, 1998.
99.1 Quarterly Servicer's Certificate dated March 15, 1998.
(b) Reports on Form 8-K filed during the quarter ended March 31, 1998:
The Note Issuer did not file any reports on Form 8-K during this
quarter.
- -----------------
(1) Incorporated by reference to the exhibit with the same name and numerical
designation included in the Registrant's Registration Statement on Form S-3 No.
333-30715.
(2) Incorporated by reference to the exhibit with the same name and numerical
designation included in the Registrant's Report on Form 8-K dated December 8,
1998.
7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on the 12th day of May, 1998.
PG&E FUNDING LLC, as Registrant
By /s/ Gabriel B. Togneri
-----------------------------
Gabriel B. Togneri, Treasurer
8
<PAGE>
INDEX TO EXHIBITS
Sequentially
Exhibit Number Description Numbered Page
- -------------- ----------- -------------
27 Financial Data Schedule 10
99.1 Quarterly Servicer's Certificate 11
dated March 15, 1998
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FOR THE PERIOD ENDED MARCH
31, 1998.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 0
<OTHER-PROPERTY-AND-INVEST> 14,845
<TOTAL-CURRENT-ASSETS> 343,375
<TOTAL-DEFERRED-CHARGES> 18,651
<OTHER-ASSETS> 2,537,028
<TOTAL-ASSETS> 2,913,899
<COMMON> 0
<CAPITAL-SURPLUS-PAID-IN> 25,338
<RETAINED-EARNINGS> 2,480
<TOTAL-COMMON-STOCKHOLDERS-EQ> 27,818
0
0
<LONG-TERM-DEBT-NET> 2,775,597
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 106,301
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 4,183
<TOT-CAPITALIZATION-AND-LIAB> 2,913,899
<GROSS-OPERATING-REVENUE> 0
<INCOME-TAX-EXPENSE> 0
<OTHER-OPERATING-EXPENSES> 1,836
<TOTAL-OPERATING-EXPENSES> 1,836
<OPERATING-INCOME-LOSS> (1,836)
<OTHER-INCOME-NET> 51,354
<INCOME-BEFORE-INTEREST-EXPEN> 49,518
<TOTAL-INTEREST-EXPENSE> 46,768
<NET-INCOME> 2,750
0
<EARNINGS-AVAILABLE-FOR-COMM> 0
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 17,287
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<PAGE>
EXHIBIT 99.1
QUARTERLY SERVICER'S CERTIFICATE
<PAGE>
Exhibit E to Servicing Agreement
Quarterly Servicer's Certificate
California Infrastructure and Economic Development Bank Special
Purpose Trust PG&E-1
$2,901,000,000 Rate Reduction Certificates, Series 1997-1
Pursuant to Section 4.01(d)(ii) of the Transition Property Servicing
Agreement dated as of December 8, 1997 (the "Transition Property Servicing
Agreement") between Pacific Gas and Electric Company, as Servicer, and PG&E
Funding LLC, as Note Issuer, the Servicer does hereby certify as follows:
Capitalized terms used in the Quarterly Servicer's Certificate (the
"Quarterly Certificate") have their respective meanings as set forth in the
Agreement. References herein to certain sections and subsections are references
to the respective sections of the Agreement.
Collection Periods: Dec. '97, Jan. '98, Feb. '98
Distribution Date: March 25, 1998
<TABLE>
<CAPTION>
1. Collections Allocable and Aggregate Amounts Available for the Current Distribution Date:
<S> <C>
i. Remittances for the Dec.'97 Collection Period $4,913,049.00
ii. Remittances for the Jan.'98 Collection Period $25,775,073.00
iii. Remittances for the Feb. '98 Collection Period $44,504,358.55
iv. Net Earnings on Collection Account $253,621.41
---------------------
v. General Sub-Account Balance $75,446,101.96
vi. Reserve Sub-Account Balance $0.00
vii. Overcollateralization Sub-Account Balance $0.00
viii.Capital Sub-Account Balance (less $100K) $14,405,000.00
---------------------
ix. Collection Account Balance $89,851,101.96
2. Outstanding Principal Balance and Collection Account Balance as of Prior
Distribution Date:
i. Class A-1 Principal Balance $125,000,000.00
ii. Class A-2 Principal Balance $265,000,000.00
iii. Class A-3 Principal Balance $280,000,000.00
iv. Class A-4 Principal Balance $300,000,000.00
v. Class A-5 Principal Balance $290,000,000.00
vi. Class A-6 Principal Balance $375,000,000.00
vii. Class A-7 Principal Balance $866,000,000.00
viii.Class A-8 Principal Balance $400,000,000.00
---------------------
ix. Rate Reduction Certificate Principal Balance $2,901,000,000.00
x. Reserve Sub-Account Balance $0.00
xi. Overcollateralization Sub-Account Balance $0.00
xii. Capital Sub-Account Balance $14,405,000.00
3. Required Funding/Payments as of Current Distribution Date:
i. Projected Class A-1 Certificate Balance $106,301,458.00
ii. Projected Class A-2 Certificate Balance $265,000,000.00
iii. Projected Class A-3 Certificate Balance $280,000,000.00
iv. Projected Class A-4 Certificate Balance $300,000,000.00
v. Projected Class A-5 Certificate Balance $290,000,000.00
vi. Projected Class A-6 Certificate Balance $375,000,000.00
vii. Projected Class A-7 Certificate Balance $866,000,000.00
viii.Projected Class A-8 Certificate Balance $400,000,000.00
---------------------
ix. Projected Class A Certificate Balance $2,882,301,458.00
x. Required Class A-1 Coupon $2,206,875.00
xi. Required Class A-2 Coupon $4,733,709.72
xii. Required Class A-3 Coupon $5,118,166.67
xiii.Required Class A-4 Coupon $5,492,666.67
xiv. Required Class A-5 Coupon $5,387,152.78
xv. Required Class A-6 Coupon $7,044,166.67
xvi. Required Class A-7 Coupon $16,524,723.33
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
xvii. Required Class A-8 Coupon $7,704,000.00
xviii.Required Overcollateralization Funding $362,625.00
xix. Required Capital Sub-Account Funding $0.00
4. Allocation of Remittances as of Current Distribution Date Pursuant to 8.02(d)
of Indenture:
i. Note, Delaware and Certificate Trustee Fees $1,083.34
ii. Quarterly Servicing Fee $1,813,125.00
iii. Quarterly Administration Fee $25,000.00
iv. Operating Expenses (subject to $100,000 cap) $3,591.42
v. Quarterly Interest $54,211,460.83
1. Class A-1 Certificate Coupon Payment $2,206,875.00
2. Class A-2 Certificate Coupon Payment $4,733,709.72
3. Class A-3 Certificate Coupon Payment $5,118,166.67
4. Class A-4 Certificate Coupon Payment $5,492,666.67
5. Class A-5 Certificate Coupon Payment $5,387,152.78
6. Class A-6 Certificate Coupon Payment $7,044,166.67
7. Class A-7 Certificate Coupon Payment $16,524,723.33
8. Class A-8 Certificate Coupon Payment $7,704,000.00
vi. Principal Due and Payable $0.00
vii. Quarterly Principal $18,698,542.00
1. Class A-1 Certificate Principal Payment $18,698,542.00
2. Class A-2 Certificate Principal Payment $0.00
3. Class A-3 Certificate Principal Payment $0.00
4. Class A-4 Certificate Principal Payment $0.00
5. Class A-5 Certificate Principal Payment $0.00
6. Class A-6 Certificate Principal Payment $0.00
7. Class A-7 Certificate Principal Payment $0.00
8. Class A-8 Certificate Principal Payment $0.00
viii.Operating Expenses (in excess of $100,000) $0.00
ix. Funding of Overcollateralization Sub-Account (to required level) $362,625.00
x. Funding of Capital Sub-Account (to required level) $0.00
xi. Net Earnings Released to Note Issuer $253,621.41
xii. Released to Note Issuer upon Series Retirement: Overcollateralization Sub-Account $0.00
xiii.Released to Note Issuer upon Series Retirement: Capital Sub-Account $0.00
xiv. Deposits to Reserve Sub-Account $77,052.96
xv. Released to Note Issuer upon Series Retirement: Collection Account $0.00
5. Outstanding Principal Balance and Collection Account Balance as of current distribution
date: (after giving effect to payments to be made on such distribution date):
i. Class A-1 Principal Balance $106,301,458.00
ii. Class A-2 Principal Balance $265,000,000.00
iii. Class A-3 Principal Balance $280,000,000.00
iv. Class A-4 Principal Balance $300,000,000.00
v. Class A-5 Principal Balance $290,000,000.00
vi. Class A-6 Principal Balance $375,000,000.00
vii. Class A-7 Principal Balance $866,000,000.00
viii.Class A-8 Principal Balance $400,000,000.00
---------------------
ix. Rate Reduction Certificate Principal Balance $2,882,301,458.00
x. Reserve Sub-Account Balance $77,052.96
xi. Overcollateralization Sub-Account Balance $362,625.00
xii. Capital Sub-Account Balance $14,405,000.00
6. Sub-Account Draws as of Current Distribution Date (if applicable, pursuant to Section
8.02(e) of Indenture):
i. Reserve Sub-Account $0.00
ii. Overcollateralization Sub-Account $0.00
iii. Capital Sub-Account $0.00
---------------------
iv. Total Draws $0.00
7. Shortfalls In Interest and Principal Payments as of Current Distribution
Date:
i. Quarterly Interest $0.00
1. Class A-1 Certificate Coupon Payment $0.00
2. Class A-2 Certificate Coupon Payment $0.00
3. Class A-3 Certificate Coupon Payment $0.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
4. Class A-4 Certificate Coupon Payment $0.00
5. Class A-5 Certificate Coupon Payment $0.00
6. Class A-6 Certificate Coupon Payment $0.00
7. Class A-7 Certificate Coupon Payment $0.00
8. Class A-8 Certificate Coupon Payment $0.00
ii. Quarterly Principal $0.00
1. Class A-1 Certificate Principal Payment $0.00
2. Class A-2 Certificate Principal Payment $0.00
3. Class A-3 Certificate Principal Payment $0.00
4. Class A-4 Certificate Principal Payment $0.00
5. Class A-5 Certificate Principal Payment $0.00
6. Class A-6 Certificate Principal Payment $0.00
7. Class A-7 Certificate Principal Payment $0.00
8. Class A-8 Certificate Principal Payment $0.00
8. Shortfalls in Required Sub-Account Levels as of Current Distribution Date:
i. Overcollateralization Sub-Account $0.00
ii. Capital Sub-Account $0.00
</TABLE>
IN WITNESS HEREOF, the undersigned has duly executed and delivered this
Quarterly Servicer's Certificate this 15th day of March, 1998.
PACIFIC GAS AND ELECTRIC COMPANY, as Servicer
by: /s/ CHRISTOPHER JOHNS
---------------------------
Christopher Johns
Vice President & Controller
