UNITED
STATES
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 25, 2006
(Date
of
earliest event reported)
PG&E
CORPORATION
(Exact
Name of Registrant as specified in Charter)
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California
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1-12609
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94-3234914
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(State
or other jurisdiction of
incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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One
Market, Spear Tower, Suite 2400, San Francisco, California
94105
(Address
of principal executive offices, zip code)
415-267-7000
(Registrant’s
Telephone Number, Including Area Code)
N/A
(Former
Name or Former Address, if Changed Since Last Report)
PACIFIC
GAS AND ELECTRIC COMPANY
(Exact
Name of Registrant as specified in Charter)
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California
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1-2348
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94-0742640
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(State
or other jurisdiction of
incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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77
Beale Street, P. O. Box 770000, San Francisco, California
94177
(Address
of principal executive offices, zip code)
(415)
973-7000
(Registrant’s
Telephone Number, Including Area Code)
N/A
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting
Material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
8.01 Other Events
Approval
of Advanced
Metering Infrastructure Application
On
July
24, 2006, the California Public Utilities Commission (CPUC) issued its decision
approving Pacific Gas and Electric Company’s (Utility) application to install an
advanced metering infrastructure (AMI), also known as “SmartMeterTM,” for
virtually all of the Utility's electric and gas customers. The
Utility plans to start installing the SmartMeter™ devices systemwide in the
fourth quarter of 2006 and to complete installation in 2011. SmartMeter™ is an
automated gas and electric metering system that is designed to improve customer
service by enabling the Utility to access meters using a remote network.
With
the AMI technology, the Utility expects that, among other benefits, it will
be
able to respond to power outages more quickly. The technology also is intended
to provide customers more information so they can make better decisions about
their energy usage. The Utility has installed SmartMeter™ devices and related
network equipment for 2,500 customers in Vacaville, California.
The
CPUC
authorized the Utility to recover the $1.74 billion estimated AMI project
cost,
including an estimated capital cost of $1.4 billion. The $1.74 billion amount
includes $1.68 billion for project costs and approximately $54.8 million
for
costs related to marketing the new critical peak pricing rate option described
below. In addition, the Utility is authorized to recover in rates 90 percent
of
up to $100 million in costs that exceed $1.68 billion without a reasonableness
review. The remaining 10 percent will not be recoverable in rates. If additional
costs exceed the $100 million threshold, the Utility may request recovery
of the
additional costs, subject to a reasonableness review.
The
CPUC
also approved the Utility’s proposal to offer customers a new voluntary billing
option called critical peak pricing, or CPP, under which customers will be
able
to take advantage of electricity prices that vary by day and hour, potentially
reducing their bills by shifting their energy use away from critical peak
periods. By shifting energy demand away from critical peak periods, the Utility
anticipates that it would need to purchase less power for critical peak periods.
The
CPUC’s decision allows the Utility to establish separate electric and gas
balancing accounts to record the revenue requirements associated with the
costs
and forecast benefits related to AMI. The Utility will record the revenue
requirement as costs are incurred over the installation period. As new meters
are activated, the Utility will record the amount of the forecasted electric
and
gas operational benefits per meter. (The CPUC accepted the Utility’s forecast of
electric and gas operational benefits to be achieved by AMI.) These ratemaking
mechanisms will remain in place at least until the Utility’s next general rate
case, expected to occur for test year 2010 or later. The Utility plans to
file
an advice letter within the next 30 days to implement its rate proposals
to
collect the revenue requirement as adopted in the CPUC’s July 24 decision. The
advice letter will be effective upon CPUC approval.
As
previously disclosed, the Utility expects that approximately 89 percent of
AMI
costs will be offset by the anticipated operational savings and efficiencies
resulting from AMI over the 20-year project life. The Utility expects to
achieve
additional cost savings resulting from reduced demand as customers choose
the
CPP billing option.
PG&E
Corporation and the Utility cannot guarantee the extent to which the
anticipated benefits and cost savings of the AMI project will be
realized.
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 hereunto
duly authorized.
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PG&E
CORPORATION
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Dated:
July 25, 2006
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By:
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/s/
Linda Y.H. Cheng
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LINDA
Y.H. CHENG
Vice
President, Corporate Governance and Corporate
Secretary
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PACIFIC
GAS AND ELECTRIC COMPANY
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Dated:
July 25, 2006
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By:
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/s/
Linda Y.H. Cheng
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LINDA
Y.H. CHENG
Vice
President, Corporate Governance and Corporate
Secretary
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