PACIFIC GAS & ELECTRIC CO
8-K, 1994-07-07
ELECTRIC & OTHER SERVICES COMBINED
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	       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:  July 6, 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.      Restructuring of Gas Supply Arrangements - Recovery of
	Interstate Transportation Demand Charges 

Pursuant to Federal Energy Regulatory Commission (FERC) rules on
capacity relinquishment and release and the California Public
Utilities Commission's (CPUC) capacity brokering program, the
Company makes available for brokering all its interstate pipeline
capacity not needed for core or core subscription service.  The
Company began brokering its capacity on the El Paso Natural Gas
Company (El Paso) and Pacific Gas Transmission Company (PGT)
systems effective August 1, 1993 and November 1, 1993,
respectively.

Interstate transportation service which cannot be marketed at the
full rates results in unrecovered demand charges.  Under the CPUC
brokering rules, the CPUC has authorized the use of an Interstate
Transition Cost Surcharge (ITCS) balancing account for unrecovered
demand charges associated with interstate pipeline obligations in
existence at the time the decision creating the ITCS was issued in
November 1991.  To the extent the Company is unable to broker its
firm interstate capacity above core and core subscription
reservations at the full as-billed rate, or to broker such capacity
at all, the Company has been authorized to accumulate unrecovered
demand charges for firm transportation service from El Paso and PGT
in the ITCS account for later review and allocation among customer
classes.  The firm transportation demand charges associated with
the Company's firm capacity on El Paso and PGT are approximately
$130 million per year and $50 million per year, respectively.

The Company has not succeeded in marketing its firm El Paso or PGT
capacity above the core and core subscription reservations at the
full cost of the capacity, nor has the Company been able to market
all the El Paso and PGT capacity it has made available for
brokering.  Accordingly, pursuant to the CPUC's ITCS mechanism, the
Company is accumulating unrecovered demand charges for EL Paso and
PGT capacity in the ITCS.

On June 27, 1994, the Company filed an application seeking recovery
of $60.7 million, which represents revenue requirement for the
estimated amount accrued in the ITCS account for the period August
1, 1993, through August 31, 1994.  The Company's application seeks
to have the $60.7 million recovered in non-core rates over a twelve
month period beginning September 1, 1994.  The application
allocates ITCS costs to all non-core customers, including those
taking service under discounted rates, and all customers' volumes
are included for cost allocation purposes.  The CPUC has indicated
that if a rate discount results in a shortfall in recovery of ITCS
costs contained in the otherwise applicable tariff rate, the
Company will not recover those ITCS costs from other customers.  


B.      Diablo Canyon Nuclear Power Plant - Nuclear Fuel Supply and
	Disposal

Under the Nuclear Waste Policy Act of 1982 (the Act), the United
States Department of Energy (DOE) is responsible for the
transportation and ultimate long-term disposal of spent nuclear
fuel and high-level nuclear waste.  Under the Act, utilities are
required to provide interim storage facilities until permanent
disposal facilities are provided by the federal government.  The
Act mandates that one or more such permanent disposal sites be in
operation by 1998 and states that the DOE will begin to dispose of
high level nuclear waste and spent nuclear fuel not later than
January 31, 1998.  

In May 1994, the DOE published for public comment a Notice of
Inquiry regarding the issue of the DOE's obligations under the Act. 
The Notice stated that it was DOE's preliminary view that it had no
statutory obligation to begin accepting spent nuclear fuel by the
1998 deadline, absent the availability of an operational disposal
facility or other facility for the storage of spent nuclear fuel.

On June 20, 1994, the Company joined 13 other utilities in filing
a lawsuit in the U.S. Court of Appeals for the District of Columbia
Circuit, seeking declaratory and injunctive relief regarding the
DOE's statutory obligation to begin accepting spent nuclear fuel
from utilities no later than January 31, 1998.  The lawsuit asks
the Court to find that the DOE's obligation is not conditioned on
whether the DOE has an operating disposal facility available, and
to order the DOE to submit to the court a program for meeting the
1998 deadline, along with such other relief as may be appropriate. 
A similar lawsuit was filed at the same time in the same court by
state attorney generals and public utility commissions from 20
states, including California.

Although the Act mandates that one or more permanent disposal sites
be in operation by 1998, the DOE has previously indicated that such
sites may not be in operation until 2010.  DOE is also considering
providing interim storage in a monitored retrievable storage
facility earlier than 2010.  However, under DOE's current estimated
acceptance schedule for spent fuel, spent fuel from the Company's
Diablo Canyon Nuclear Power Plant (Diablo Canyon) is not likely to
be accepted by DOE for interim or permanent storage before 2011, at
the earliest.  At the projected level of operation for the
Company's Diablo Canyon Nuclear Power Plant (Diablo Canyon), the
Company's facilities are sufficient to store on-site all spent fuel
produced through approximately 2006 while maintaining the
capability for a full-core off-load.  In the event an interim or
permanent DOE storage or disposal facility is not available for
Diablo Canyon's spent fuel by 2007, the Company is examining
options for providing additional temporary spent fuel storage at
Diablo Canyon or other facilities, pending disposal or storage at
a DOE facility.  Such additional temporary spent fuel storage may
be necessary in order for the Company to continue operating Diablo 
Canyon beyond approximately 2006, and may require approval by the
NRC and other regulatory agencies.


C.      Acquisition by PG&E Enterprises/Bechtel Enterprise

On July 5, 1994, the Company and Bechtel Group, Inc. (Bechtel)
announced that U.S. Generating Co. (USGen) and J. Makowski Co.,
Inc. (JMC) have concluded an agreement for the purchase of all of
JMC by PG&E Enterprises (Enterprises) and Bechtel Enterprises, Inc.
the unregulated and development/financing units of the Company and
Bechtel, respectively. 

JMC is engaged in the development of natural gas-fueled power
generation projects and natural gas distribution, supply and
underground storage projects.  The purchase, in the range of
approximately $250 million to $300 million, is expected to be
completed in two to four months, subject to the satisfaction of
customary closing conditions.  

USGen was formed as a general partnership in 1989 by Enterprises,
the non-utility subsidiary of the Company, and Bechtel Enterprises,
Inc. the development, ownership and financing unit of Bechtel. 
USGen has ownership and management interests in independent power
projects throughout the United States, and provides electricity to
utilities and steam to industrial firms under a variety of long-term contracts.





















	   
			     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:  July 6, 1994






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