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: February 21, 1995
PACIFIC GAS AND ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
California 1-2348 94-0742640
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(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 Commission Proceedings -
Experimental Procurement Service for Customer-Identified
Electric Supply
On February 17, 1995, the Company requested California Public
Utilities Commission (CPUC) approval to implement a statewide
three-year experimental program under which California utilities
would offer industrial customers and other large energy users the
option to receive electricity from competitive suppliers,
starting as early as January 1, 1996. The Company's proposed
program would include the following key features:
- - A group of large electricity users would be permitted to
enter into individually negotiated "buy/sell" agreements with
alternative suppliers of electricity. This "buy/sell" proposal
would be modeled to a large extent after the "customer identified
gas" program implemented by the CPUC in 1991 as part of its
restructuring of the natural gas industry. The utility would
purchase electricity on behalf of each participating customer.
The electricity would be purchased from any supplier chosen by
the customer, at a price previously negotiated by the customer.
The utility then would resell the electricity to the customer at
the customer's negotiated price, as part of a bundled retail sale
to that customer. For customers who elect to purchase energy
from alternative sources located outside the Company's service
territory, the Company will agree to use a portion of its
transmission capacity (up to 50 megawatts) at the
California/Oregon border to accommodate purchases on behalf of
customers whose suppliers deliver at that point. The Company
will accept and buy power delivered to its other points of
interconnection, and amounts in excess of 50 megawatts at the
California/Oregon border interconnection, only if transmission
capacity is available.
- - The number of the Company's customers eligible to
participate in the experiment would increase each year. The
experimental program initially would apply in 1996 to customers
with annual average demand above 7,500 kilowatts (Kw)
(approximately 30 customers). In 1997 customers with annual
average demand above 4,000 kW (approximately 50 additional
customers) would be eligible for the program, joined in 1998 by
customers with annual average demand above 2,000 kW
(approximately 110 additional customers).
- - Utilities would be permitted to negotiate agreements with
customers to compete with alternative suppliers of electricity.
Lower revenues to the utility resulting from such individually
negotiated contracts would not be offset through rate increases
to other customers, putting shareholders at risk for any loss of
revenue resulting from the experimental program. The Company
estimates that if, upon full implementation of the experiment,
all eligible customers who might find it economic participated in
the buy/sell program and were able to use alternative suppliers
to meet their entire load requirements, the maximum annual
revenues that could be lost to the Company, net of generation
costs saved as a result of customers' participation in the
buy/sell program, is approximately $21 million.
- - Customers participating in the "buy/sell" experiment would
receive a predetermined credit on their utility bills which is
based on prices paid to Qualifying Facilities for energy and
capacity. This credit is used as a proxy for the market price of
electricity. Added to participating customers' bills would be
the cost of power they negotiated with an alternative supplier.
- - The participating customers' prices would remain fully
"bundled," a full package of services at one price. This would
mean that issues such as unbundling, recovery of transition
costs, funding of social and environmental programs and
resolution of state and federal jurisdictional matters would not
have to be resolved prior to commencement of the experimental
program.
- - At the conclusion of the three-year experimental program,
the information gained could be used by public policy makers to
evaluate the benefits of customer choice.
As previously disclosed, in April 1994 the CPUC issued an order
instituting a rulemaking and investigation on policies governing
restructuring California's electric services industry and
reforming regulation. The CPUC has held five full panel
hearings, 16 public participation hearings and received several
rounds of comments from more than 140 individuals and
organizations. The CPUC has indicated it intends to issue a
proposed policy decision on industry restructuring on March 22,
1995.
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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: February 21, 1995
