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 19, 1994
PACIFIC GAS AND ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
California 1-2348 94-0742640
(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification Number)
77 Beale Street, P.O.Box 770000, San Francisco, California 94177
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(415) 973-7000
Item 5. Other Events
A. California Public Utilities Proceedings
1. Electric Industry Restructuring
As previously disclosed, in April 1994, the California Public
Utilities Commission (CPUC) issued an order instituting a
rulemaking and an investigation (OIR/OII) on electric industry
restructuring. The proposal, which is subject to comment and
modification, involves two major changes in electric industry
regulation. The first would move electric utilities from
traditional ratemaking to performance-based ratemaking. The second
would unbundle electric services and provide electric utility
retail customers the option to choose from a range of electric
generation providers, including utilities ("direct access").
On December 7, 1994, the CPUC issued an interim decision in the
restructuring OIR/OII. The decision sets a schedule under which
the CPUC will propose a policy decision on March 22, 1995, with a
final policy decision to be effective no earlier than September
1995. The CPUC also established a public working group to comment
on unbundling and cost recovery, social programs and resource
procurement under several different models for restructuring which
involve direct access or a supply pool for use by wholesale and/or
retail purchasers of electricity. The working group will consist
of the energy utilities and any other parties who join voluntarily.
The working group will submit its report to the CPUC on
February 22, 1995.
As previously disclosed, on November 18, 1994 the Company filed
testimony with the CPUC on uneconomic assets and obligations which
would result from the CPUC's proposed electric industry
restructuring. The Company indicated that a Competition Transition
Charge (CTC) should be permitted to provide for three types of
costs: (1) costs associated with utility-owned generation and
obligations resulting from power purchase agreements other than
contracts with Qualifying Facilities (QFs), (2) QF power purchase
obligations, and (3) regulatory assets. The Company also indicated
that it would not seek CTC recovery for the first of these
categories -- costs associated with utility-owned generation and
non-QF obligations -- if direct access is phased in over a 12-year
period consistent with the proposal made by the Company in June
1994.
In December 1994, the Company filed revised testimony which
reflects the proposed agreement to modify the pricing provisions of
1988 rate case settlement for the Diablo Canyon Nuclear Power Plant
(Diablo Canyon). If the agreement is approved it would reduce the
amount of potential transition costs associated with the Company's
generation assets. Table 1 sets forth the revised estimates of the
CTC which reflect the proposed settlement amounts for Diablo
Canyon.
<TABLE>
PRELIMINARY COMPETITION TRANSITION CHARGE ANNUAL ESTIMATES<F1>
USING AMORTIZATION PERIODS FROM ASSIGNED COMMISSIONERS' RULING
UPDATED TO REFLECT REVISED DIABLO CANYON PRICING
<CAPTION>
_____________________________________________________________________________
Levelized Levelized Levelized Levelized
Recovery Recovery Recovery Recovery Over
Line Over 6 Years Over 9 Years Over 12 Years Remaining Life
No. Category of CTC ($ billion) ($ billion) ($ billion) ($ billion)
- ------------------------------------------------------------------------------------------------------
(A) (B) (C) (D)
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 Utility-Owned
Generation Assets and
Non-QF Obligations<F2> 0.0 to 1.3 0.0 to 1.0 0.0 to 0.8<F3> 0.0 to 0.6
2 QF Power Purchase
Obligations<F2> 0.45 to 0.89 0.34 to 0.67 0.28 to 0.56 0.20 to 0.39
Regulatory Assets:
3 Unrecovered ECAC
Balance <F4>
4 Other Generation-Related
Regulatory Assets 0.15 0.11 0.09 0.07
- -------------------------
<FN>
<F1>
* The calculations presented in the filing are based on numerous assumptions, variables and estimates of
future prices, energy supplies and economic trends. The range of transition costs shown should be
viewed only as preliminary estimates.
<F2>
** Range based on different assumptions around market price.
<F3>
*** Under the Company's June 1994 proposal for a 12-year phase-in of direct access, the Company would not
seek CTC recovery of Company-owned generation and non-QF obligations.
<F4>
**** Balance expected to net to zero within this recovery period.
</FN>
</TABLE>
The Company's revised testimony also included illustrations of the
net present value of total CTC, and annual CTC calculations using
both the original and the proposed Diablo Canyon settlement
amounts, in both cases assuming a 9.2% discount rate.
<TABLE>
ILLUSTRATION OF PG&E'S POTENTIAL TRANSITION COST
USING PG&E'S COMPETITIVE PROXY PRICE AND ORIGINAL DIABLO PRICING
1996 Present Value @ 9.2%
($ Billions)
<CAPTION>
______________________________________________________________________________________________________
Competitive Proxy Price(cent/kWh)
Line --------------------------------------------------------------------
No. Descriptions 3.2 cents in 1994 4.0 cents in 1994 4.8 cents in 1994
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <S>
1 PG&E Generation $ 12.1 $ 4.8 $ 0.5
2 QF Contracts $ 4.0 $ 2.9 $ 2.0
3 Regulatory Assets $ 1.1 - $ 1.4 $ 1.1 - $ 1.4 $ 1.1 - $ 1.4
4 TOTAL CTC $ 17.2 - $ 17.6 $ 8.8 - $ 9.1 $ 3.6 - $ 3.9
</TABLE>
<TABLE>
ILLUSTRATION OF PG&E'S POTENTIAL TRANSITION COST
USING PG&E'S COMPETITIVE PROXY PRICE AND REVISED DIABLO PRICING
1996 Present Value @ 9.2%
($ Billions)
<CAPTION>
_____________________________________________________________________________________________________
Competitive Proxy Price(cent/kWh)
---------------------------------------------------------------------
No. Descriptions 3.2 cents in 1994 4.0 cents in 1994 4.8 cents in 1994
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 PG&E Generation w/
Revised Diablo Pricing $ 5.9 $ 0.9 $ 0.0
2 QF Contracts $ 4.0 $ 2.9 $ 2.0
3 Regulatory Assets $ 1.1 - $ 1.4 $ 1.1 - $ 1.4 $ 1.1 - $ 1.4
4 TOTAL CTC $ 11.0 - $ 11.3 $ 4.9 - $ 5.2 $ 3.1 - $ 3.4
</TABLE>
2. 1996 General Rate Case
On December 9, 1994, the Company filed its 1996 general rate case
(GRC) requesting a decrease in base rates for electric and gas
service to its retail customers and an increase in rates for
Pipeline Expansion service, effective January 1, 1996. The
requested rates would result in revenue changes consisting of a
decrease in annual electric revenues of approximately $201 million,
a decrease in annual gas revenues of approximately $119 million and
an increase in Pipeline Expansion revenues of approximately $13
million. Since the Company anticipates that the CPUC will have
implemented the Company's proposed performance based ratemaking
mechanism for determining base revenues before January 1, 1997, the
Company's GRC application does not request the adoption of an
attrition rate adjustment for the years 1997 and 1998. Public
hearings on the 1996 GRC are expected to begin in March 1995, with
a final decision on the application expected in December 1995.
SIGNATURE
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.
PACIFIC GAS AND ELECTRIC COMPANY
GORDON R. SMITH
By ________________________________
GORDON R. SMITH
Vice President and
Chief Financial Officer
Dated: December 19, 1994
