Full Description

PG&E Corporation, incorporated in 1995, is a holding company whose primary purpose is to hold interests in energy-based businesses. The Company conducts its business principally through Pacific Gas and Electric Company (Utility) a public utility operating in northern and central California. The Utility engages in the businesses of electricity and natural gas distribution; electricity generation, procurement, and transmission; and natural gas procurement, transportation, and storage. The Utility served approximately 5.1 million electricity distribution customers and approximately 4.3 million natural gas distribution customers during the year ended December 31, 2008. Its revenues are generated mainly through the sale and delivery of electricity and natural gas. The Utility is regulated primarily by the California Public Utilities Commission (CPUC), and the Federal Energy Regulatory Commission (FERC).

Electric Utility Operations

The Utility's Diablo Canyon power plant consists of two nuclear power reactor units: Units 1 and 2, with a total-plant net generation capacity of approximately 2,240 megawatts of electricity. The Utility's hydroelectric system consists of 110 generating units at 69 powerhouses, including a pumped storage facility, with a total generating capacity of 3,896 megawatts. The system includes 99 reservoirs, 56 diversions, 170 dams, 184 miles of canals, 44 miles of flumes, 135 miles of tunnels, 19 miles of pipe, and five miles of natural waterways. The system also includes water rights as specified in 90 permits or licenses and 160 statements of water diversion and use. In addition to the Utility-owned resources, the Utility has been engaged in the development of three generation facilities to be owned and operated by the Utility. During the year ended December 31, 2008, electricity from the California Department of Water Resources (DWR) contracts allocated to the Utility provided approximately 15% of the electricity delivered to the Utility's customers.

As of December 31, 2008, the Utility had power purchase agreements with 246 qualifying cogeneration facilities (QFs) for approximately 3,900 megawatts that are in operation. The Utility also has power purchase agreements with approximately 74 inoperative QFs. The total of approximately 3,900 megawatts consists of approximately 2,500 megawatts from cogeneration projects, 600 megawatts from wind projects and 800 MW from projects with other fuel sources, including biomass, waste-to-energy, geothermal, solar, and hydroelectric. QF power purchase agreements accounted for approximately 18% of the Utility’s electricity sources during 2008.

The Utility has contracts with various irrigation districts and water agencies to purchase hydroelectric power. Under these contracts, the Utility must make specified semi-annual minimum payments based on the irrigation districts' and water agencies' debt service requirements. The Utility's irrigation district and water agency contracts accounted for approximately 2% of the Utility’s electricity sources in 2008. The Utility has entered into several power purchase agreements with third parties.

As of December 31, 2008, the Utility owned 18,650 circuit miles of interconnected transmission lines operated at voltages of 500kilovolt (kV) to 60 kV and transmission substations with a capacity of 56,401 megavolt ampere (MVA). Electricity is transmitted across these lines and substations and is then distributed to customers through 141,036 circuit miles of distribution lines and substations with a capacity of 27,137 MVA. In 2008, the Utility delivered 88,127 gigawatt hour (GWh) to its customers; including 6,191 GWh delivered to direct access customers. The Utility is interconnected with electric power systems in the Western Electricity Coordinating Council (WECC), which includes 14 western states, Alberta and British Columbia, Canada, and parts of Mexico. The Utility's electricity distribution network extends through 47 of California's 58 counties, comprising most of northern and central California. The Utility's network consists of 141,036 circuit miles of distribution lines (of which approximately 19% are underground and approximately 81% are overhead).

Natural Gas Utility Operations

The Utility owns and operates an integrated natural gas transportation, storage and distribution system in California that extends throughout all or a part of 40 of California's 58 counties and includes most of northern and central California. In 2008, the Utility served approximately 4.3 million natural gas distribution customers. The total volume of natural gas throughput during 2008, was approximately 839 billion cubic feet (Bcf). As of December 31, 2008, the Utility's natural gas system consisted of 42,017 miles of distribution pipelines, 6,418 miles of backbone and local transmission pipelines, and three storage facilities. The Utility’s backbone transmission system, composed primarily of Lines 300, 400 and 401, is used to transport gas from the Utility’s interconnection with interstate pipelines, other local distribution companies, and California gas fields to the Utility’s local transmission and distribution systems.

The Utility also owns and operates three underground natural gas storage fields connected to the Utility's transmission and storage system. These storage fields have a combined firm capacity of approximately 47 Bcf. In addition, two independent storage operators are interconnected to the Utility's northern California transportation system. The Utility provides natural gas transportation services to all core and non-core customers connected to the Utility's system in its service territory. The Utility provides natural gas transportation services to all core and non-core customers connected to the Utility's system in its service territory. The Utility's gas gathering system collects natural gas from third-party wells in California. During 2008, approximately 6% of the gas transported on the Utility's system came from various California producers, with the balance coming from supplies transported into California by others. In 2008, approximately 52% of the gas transported on the Utility's system came from western Canada.