CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) | ||||
In Millions, except Per Share data | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Operating Revenues | ||||
Electric | $2,630 | $2,880 | $7,610 | $8,039 |
Natural gas | 605 | 794 | 2,250 | 2,946 |
Total operating revenues | 3,235 | 3,674 | 9,860 | 10,985 |
Operating Expenses | ||||
Cost of electricity | 997 | 1,282 | 2,763 | 3,406 |
Cost of natural gas | 134 | 351 | 879 | 1,613 |
Operating and maintenance | 1,047 | 983 | 3,144 | 3,010 |
Depreciation, amortization, and decommissioning | 450 | 419 | 1,298 | 1,240 |
Total operating expenses | 2,628 | 3,035 | 8,084 | 9,269 |
Operating Income | 607 | 639 | 1,776 | 1,716 |
Interest income | 1 | 23 | 27 | 82 |
Interest expense | (174) | (178) | (533) | (550) |
Other income (expense), net | 23 | (14) | 63 | (4) |
Income Before Income Taxes | 457 | 470 | 1,333 | 1,244 |
Income tax provision | 136 | 163 | 376 | 413 |
Net Income | 321 | 307 | 957 | 831 |
Preferred stock dividend requirement of subsidiary | 3 | 3 | 10 | 10 |
Income Available for Common Shareholders | $318 | $304 | $947 | $821 |
Weighted Average Common Shares Outstanding, Basic | 370 | 357 | 367 | 356 |
Weighted Average Common Shares Outstanding, Diluted | 388 | 358 | 386 | 357 |
Net Earnings Per Common Share, Basic | 0.84 | 0.83 | 2.53 | 2.25 |
Net Earnings Per Common Share, Diluted | 0.83 | 0.83 | 2.49 | 2.24 |
Dividends Declared Per Common Share | 0.42 | 0.39 | 1.26 | 1.17 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | ||
In Millions | Sep. 30, 2009
| Dec. 31, 2008
|
Current Assets | ||
Cash and cash equivalents | $700 | $219 |
Restricted cash | 569 | 1,290 |
Accounts receivable | ||
Customers (net of allowance for doubtful accounts of $68 million in 2009 and $76 million in 2008) | 1,609 | 1,751 |
Accrued unbilled revenue | 807 | 685 |
Regulatory balancing accounts | 882 | 1,197 |
Inventories | ||
Gas stored underground and fuel oil | 141 | 232 |
Materials and supplies | 204 | 191 |
Income taxes receivable | 58 | 120 |
Prepaid expenses and other | 640 | 718 |
Total current assets | 5,610 | 6,403 |
Property, Plant, and Equipment | ||
Electric | 29,875 | 27,638 |
Gas | 10,524 | 10,155 |
Construction work in progress | 1,767 | 2,023 |
Other | 15 | 17 |
Total property, plant, and equipment | 42,181 | 39,833 |
Accumulated depreciation | (13,997) | (13,572) |
Net property, plant, and equipment | 28,184 | 26,261 |
Other Noncurrent Assets | ||
Regulatory assets | 5,931 | 5,996 |
Nuclear decommissioning funds | 1,870 | 1,718 |
Income taxes receivable | 506 | 0 |
Other | 450 | 482 |
Total other noncurrent assets | 8,757 | 8,196 |
TOTAL ASSETS | 42,551 | 40,860 |
Current Liabilities | ||
Short-term borrowings | 500 | 287 |
Long-term debt, classified as current | 342 | 600 |
Energy recovery bonds, classified as current | 382 | 370 |
Accounts payable | ||
Trade creditors | 864 | 1,096 |
Disputed claims and customer refunds | 816 | 1,580 |
Regulatory balancing accounts | 629 | 730 |
Other | 370 | 343 |
Interest payable | 794 | 802 |
Income taxes payable | 589 | 0 |
Deferred income taxes | 172 | 251 |
Other | 1,491 | 1,567 |
Total current liabilities | 6,949 | 7,626 |
Noncurrent Liabilities | ||
Long-term debt | 9,839 | 9,321 |
Energy recovery bonds | 928 | 1,213 |
Regulatory liabilities | 4,152 | 3,657 |
Pension and other postretirement benefits | 2,221 | 2,088 |
Asset retirement obligations | 1,545 | 1,684 |
Income taxes payable | 0 | 35 |
Deferred income taxes | 4,321 | 3,397 |
Deferred tax credits | 90 | 94 |
Other | 2,092 | 2,116 |
Total noncurrent liabilities | 25,188 | 23,605 |
Shareholders' Equity | ||
Preferred stock, no par value, authorized 80,000,000 shares, $100 par value, authorized 5,000,000 shares, none issued | 0 | 0 |
Common stock, no par value, authorized 800,000,000 shares, issued 370,877,751 common and 670,552 restricted shares in 2009 and issued 361,059,116 common and 1,287,569 restricted shares in 2008 | 6,265 | 5,984 |
Reinvested earnings | 4,097 | 3,614 |
Accumulated other comprehensive loss | (200) | (221) |
Total shareholders' equity | 10,162 | 9,377 |
Noncontrolling Interest - Preferred Stock of Subsidiary | 252 | 252 |
Total equity | 10,414 | 9,629 |
TOTAL LIABILITIES AND EQUITY | $42,551 | $40,860 |
PARENTHETICAL DATA FOR CONDENSE
PARENTHETICAL DATA FOR CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | ||
In Millions, except Share data | Sep. 30, 2009
| Dec. 31, 2008
|
Current Assets | ||
Allowance for doubtful accounts | $68 | $76 |
Shareholders' Equity | ||
Preferred stock, par value (in dollars per share) | 0 | 0 |
Preferred stock, shares authorized (no par value) | 80,000,000 | 80,000,000 |
Preferred stock, shares issued (no par value) | 0 | 0 |
Preferred stock, par value (in dollars per share) | 100 | 100 |
Preferred stock, shares authorized ($100 par value) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued ($100 par value) | 0 | 0 |
Common stock, par value (in dollars per share) | 0 | 0 |
Common stock, shares authorized (in shares) | 800,000,000 | 800,000,000 |
Common stock, shares issued (in shares) | 370,877,751 | 361,059,116 |
Common stock, shares issued (restricted) | 670,552 | 1,287,569 |
1_CONDENSED CONSOLIDATED STATEM
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | ||
In Millions | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Cash Flows from Operating Activities | ||
Net income | $957 | $831 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation, amortization, and decommissioning | 1,455 | 1,388 |
Allowance for equity funds used during construction | (71) | (51) |
Deferred income taxes and tax credits, net | 301 | 482 |
Other changes in noncurrent assets and liabilities | 61 | 87 |
Effect of changes in operating assets and liabilities | ||
Accounts receivable | 20 | (181) |
Inventories | 78 | (153) |
Accounts payable | (159) | (100) |
Disputed claims and customer refunds | (700) | 0 |
Income taxes receivable/payable | 658 | 177 |
Regulatory balancing accounts, net | 226 | (94) |
Other current assets | 27 | (123) |
Other current liabilities | (50) | (68) |
Other | 4 | (3) |
Net cash provided by operating activities | 2,807 | 2,192 |
Cash Flows from Investing Activities | ||
Capital expenditures | (3,022) | (2,691) |
Decrease (increase) in restricted cash | 732 | (3) |
Proceeds from nuclear decommissioning trust sales | 1,177 | 1,121 |
Purchases of nuclear decommissioning trust investments | (1,219) | (1,161) |
Other | 14 | (41) |
Net cash used in investing activities | (2,318) | (2,775) |
Cash Flows from Financing Activities | ||
Net borrowings under revolving credit facility | 0 | 283 |
Net (repayment) issuance of commercial paper, net of discount of $3 million in 2009 and $9 million in 2008 | (290) | 524 |
Proceeds from issuance of short-term debt, net of issuance costs of $1 million in 2009 | 499 | 0 |
Proceeds from issuance of long-term debt, net of premium, discount, and issuance costs of $16 million in 2009 and $2 million in 2008 | 1,193 | 693 |
Long-term debt matured or repurchased | (909) | (454) |
Energy recovery bonds matured | (273) | (260) |
Common stock issued | 211 | 150 |
Common stock dividends paid | (435) | (406) |
Other | (4) | (41) |
Net cash (used in) provided by financing activities | (8) | 489 |
Net change in cash and cash equivalents | 481 | (94) |
Cash and cash equivalents at January 1 | 219 | 345 |
Cash and cash equivalents at September 30 | 700 | 251 |
Cash received (paid) for | ||
Interest, net of amounts capitalized | (493) | (449) |
Income taxes, net | 437 | 146 |
Supplemental disclosures of noncash investing and financing activities | ||
Common stock dividends declared but not yet paid | 156 | 140 |
Capital expenditures financed through accounts payable | 229 | 224 |
Noncash common stock issuances | $50 | $6 |
2_PARENTHETICAL DATA FOR CONDEN
PARENTHETICAL DATA FOR CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | ||
In Millions | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Cash Flows from Financing Activities | ||
Net (Repayment) Issuance Of Commercial Paper, Discount | $3 | $9 |
Proceeds from issuance of short-term debt, issuance costs | 1 | 0 |
Proceeds from issuance of long-term debt, premium, discount, and issuance costs | $16 | $2 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
Organization and Basis of Presentation | NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION PGE Corporation is a holding company whose primary purpose is to hold interests in energy-based businesses.PGE Corporation 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 is regulated primarily by the California Public Utilities Commission (CPUC) and the Federal Energy Regulatory Commission (FERC). This quarterly report on Form 10-Q is a combined report of PGE Corporation and the Utility.Therefore, the Notes to the Condensed Consolidated Financial Statements apply to both PGE Corporation and the Utility.PGE Corporations Condensed Consolidated Financial Statements include the accounts of PGE Corporation, the Utility, and other wholly owned and controlled subsidiaries.The Utilitys Condensed Consolidated Financial Statements include the accounts of the Utility and its wholly owned and controlled subsidiaries, as well as the accounts of variable interest entities (VIEs) for which the Utility absorbs a majority of the risk of loss or gain.All intercompany transactions have been eliminated from the Condensed Consolidated Financial Statements. The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (SEC) and therefore do not contain all of the information and footnotes required by GAAP and the SEC for annual financial statements.PGE Corporations and the Utilitys Condensed Consolidated Financial Statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.The information at December 31, 2008 in both PGE Corporations and the Utilitys Condensed Consolidated Balance Sheets included in this quarterly report was derived from the audited Consolidated Balance Sheets incorporated by reference into their combined Annual Report on Form 10-K for the year ended December 31, 2008.PGE Corporations and the Utilitys combined Annual Report on Form 10-K for the year ended December 31, 2008, together with the information incorporated by reference into such report, is referred to in this quarterly report on Form 10-Q as the 2008 Annual Report. The accounting policies used by PGE Corporation and the Utility are discussed in Notes 1 and 2 of the Notes to the Consolidated Financial Statements in the 2008 Annual Report.Any significant changes to those policies or new significant policies are described in Note 2 below. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions based on a wide range of factors, including future regulatory decis |
NEW AND SIGNIFICANT ACCOUNTING
NEW AND SIGNIFICANT ACCOUNTING POLICIES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
New and Significant Accounting Policies | NOTE 2: NEW AND SIGNIFICANT ACCOUNTING POLICIES Significant Accounting Policies Consolidation of Variable Interest Entities PGE Corporation and the Utility are required to consolidate any entity over which it has control.In most cases, control can be determined based on majority ownership.However, for certain entities, control is difficult to discern based on voting equity interests only.These entities are referred to as VIEs.Characteristics of a VIE include equity investment at risk that is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties, or equity investors that lack any of the characteristics of a controlling financial interest.The primary beneficiary, defined as the entity that absorbs a majority of the expected losses of the VIE, receives a majority of the expected residual returns of the VIE, or both, is required to consolidate the VIE. 12 The Utilitys exposure to VIEs relates primarily to entities with which it has a power purchase agreement.For those entities, the Utility assesses operational risk, commodity price risk, credit risk, and tax benefit risk on a qualitative basis to determine whether the Utility is a primary beneficiary of the entity and is required to consolidate the entity.This qualitative assessment also typically involves comparing the contract life to the economic life of the plant to consider the significance of the commodity price risk that the Utility might absorb.As of September 30, 2009, the Utility is not the primary beneficiary of any entities with which it has power purchase agreements. Although the Utility is not required to consolidate any of these VIEs as of September 30, 2009, it held a significant variable interest in three VIEs as a result of being a party to the following power purchase agreements: A 25-year power purchase agreement approved by the CPUC in 2009 to purchase energy from a 250-megawatt (MW) solar photovoltaic energy facility beginning on the date of commercial operations (expected in 2012); A 20-year power purchase agreement approved by the CPUC in 2009 to purchase energy from a 550-MW solar photovoltaic energy facility beginning on the date of commercial operations (expected in 2013); and A 25-year power purchase agreement approved by the CPUC in 2008 to purchase energy from a 554-MW solar trough facility beginning on the date of commercial operations (expected in 2011). Each of these VIEs is a subsidiary of another company whose activities are financed primarily through equity from investors and proceeds from non-recourse project-specific debt financing.Activities of the VIEs consist of renewable energy production from electric generating facilities for sale to the Utility.Under each of the power purchase agreements, the Utility is obligated to purchase as-delivered electric generation output from the VIEs.The Utility does not provide any other financial or other support to these VIEs.The Utilitys financial exposure is limited to the amounts paid for delivered electricity. Asset Retirement Obligations See Note 2 of the Notes to the Consolidated Financial Statem |
REGULATORY ASSETS, LIABILITIES,
REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
Regulatory Assets, Liabilities, and Balancing Accounts | NOTE 3: REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS The Utility accounts for the financial effects of regulation based on the Regulated Operations Topic of the FASB ASC, which applies to regulated entities whose rates are designed to recover the cost of providing service (cost-of-service rate regulation).All of the Utilitys operations are subject to cost-of-service rate regulation. The Utility capitalizes and records, as a regulatory asset, costs that would otherwise be charged to expense if it is probable that the incurred costs will be recovered in future rates.The regulatory assets are amortized over future periods when the costs are expected to be recovered.If costs expected to be incurred in the future are currently being recovered through rates, the Utility records those expected future costs as regulatory liabilities.In addition, amounts that are probable of being credited or refunded to customers in the future are recorded as regulatory liabilities. To the extent that portions of the Utilitys operations cease to be subject to cost-of-service rate regulation, or recovery is no longer probable as a result of changes in regulation or other reasons, the related regulatory assets and liabilities are written off. Regulatory Assets Long-Term Regulatory Assets Long-term regulatory assets are composed of the following: Balance At (in millions) September 30, 2009 December 31, 2008 Pension benefits $ 1,732 $ 1,624 Energy recovery bonds 1,219 1,487 Deferred income tax 982 847 Utility retained generation 754 799 Price risk management 340 362 Environmental compliance costs 398 385 Unamortized loss, net of gain, on reacquired debt 209 225 Regulatory assets associated with plan of reorganization 87 99 Contract termination costs 71 82 Other 139 86 Total long-term regulatory assets $ 5,931 $ 5,996 The regulatory asset for pension benefits represents the cumulative differences between amounts recognized for ratemaking purposes and amounts recognized in accordance with GAAP, which also includes amounts that otherwise would be fully recorded to Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets.(See Note 14 of the Notes to the Consolidated Financial Statements in the 2008 Annual Report.) In connection with the December 19, 2003 settlement agreement among PGE Corporation, the Utility, and the CPUC to resolve the Utilitys proceeding under Chapter 11 of the U.S. Bankruptcy Code (Chapter 11 Settlement Agreement), the CPUC authorized the Utility to recover $2.21 billion (settlement regulatory asset) over a nine year period.In order to lower the costs borne by customers, PGE Energy Recovery Funding LLC (PERF), a wholly owned consolidated subsidiary of the Utility, issued energy recovery bonds (ERB) to refinance the settlement regulatory asset.The regulatory asset for ERBs represents the refinancing of the settlement regulatory asset.The regulatory asset is amortized over the life of the bonds consistent with t |
DEBT
DEBT | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
Debt | NOTE 4: DEBT PGE Corporation Senior Notes On March 12, 2009, PGE Corporation issued $350 million principal amount of 5.75% Senior Notes due April 1, 2014. Credit Facility At September 30, 2009, PGE Corporation had no borrowings outstanding under its $187 million revolving credit facility.PGE Corporation amended its revolving credit facility on April 27, 2009 to remove Lehman Brothers Bank, FSB (Lehman Bank) as a lender.Prior to the amendment, the total borrowing capacity under the revolving credit facility was $200 million, including a commitment from Lehman Bank that represented $13 million, or 7%, of the total. Utility Senior Notes On March 6, 2009, the Utility issued $550 million principal amount of 6.25% Senior Notes due March 1, 2039. On June 11, 2009, the Utility issued $500 million principal amount of Floating Rate Senior Notes due June 10, 2010.The interest rate for the Floating Rate Senior Notes is equal to the three-month London Interbank Offered Rate plus 0.95% and will reset quarterly beginning on September 10, 2009.At September 30, 2009, the interest rate on the Floating Rate Senior Notes was 1.25%. Pollution Control Bonds The California Pollution Control Financing Authority and the California Infrastructure and Economic Development Bank (CIEDB), serving as conduit issuer, have issued various series of tax-exempt pollution control bonds for the benefit of the Utility. On September 1, 2009, the CIEDB issued $149 million of tax-exempt pollution control bonds series 2009 A and B due on November 1, 2026 and $160 million of tax-exempt pollution control bonds series 2009 C and D due on December 1, 2016.The proceeds were used to repurchase the corresponding series of 2008 pollution control bonds.The series 2009 bonds, issued at par with an initial rate of 0.20%, are variable rate demand notes with interest resetting daily and backed by direct-pay letters of credit.Unlike the series 2008 bonds, interest earned on the series 2009 bonds is not subject to the alternative minimum tax (AMT).A provision in the American Recovery and Reinvestment Act of 2009 allows certain tax-exempt bonds that are subject to AMT to be reissued or refunded in 2009 or 2010 as tax-exempt bonds that are not subject to AMT.As a result, the series 2009 bonds were issued at a lower interest rate, reducing the Utilitys interest expense. Credit Facility and Short-Term Borrowings At September 30, 2009, the Utility had $273 million of letters of credit outstanding under the Utilitys $1.94 billion revolving credit facility.The Utility amended its revolving credit facility on April 27, 2009 to remove Lehman Bank as a lender.Prior to the amendment, the total borrowing capacity under the revolving credit facility was $2.0 billion, including a commitment from Lehman Bank that represented $60 million, or 3%, of the total. The revolving credit facility also provides liquidity support for commercial paper offerings.At September 30, 2009, the Utility had no commercial paper outstanding. Energy Recovery Bonds PGE Energy Recovery Funding LLC, a wholly owned consolidated subsidiary of the Utility, issued two separate series of ERB |
EQUITY
EQUITY | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
Equity | NOTE 5: EQUITY PGE Corporations and the Utilitys changes in equity for the nine months ended September 30, 2009 were as follows: PGE Corporation Utility (in millions) Total Equity Total Shareholders Equity Balance at December 31, 2008 $ 9,629 $ 9,787 Net income 957 983 Common stock issued 261 - Share-based compensation amortization 17 - Common stock dividends declared and paid (309 ) (468 ) Common stock dividends declared but not yet paid (156 ) - Preferred stock dividend requirement - (10 ) Preferred stock dividend requirement of subsidiary (10 ) - Tax benefit from employee stock plans 4 3 Other comprehensive income 21 21 Equity contribution - 688 Balance at September 30, 2009 $ 10,414 $ 11,004 For the nine months ended September 30, 2009, PGE Corporation contributed equity of $688 million to the Utility in order to maintain the 52% common equity target authorized by the CPUC and to ensure that the Utility has adequate capital to fund its capital expenditures. Dividends During the nine months ended September 30, 2009, the Utility paid common stock dividends totaling $468 million to PGE Corporation. During the nine months ended September 30, 2009, PGE Corporation paid common stock dividends totaling $435 million, net of $18 million that was reinvested in additional shares of common stock by participants in thePGE Corporation Dividend Reinvestment and Stock Purchase Plan.On September 16, 2009, the Board of Directors of PGE Corporation declared a dividend of $0.42 per share, totaling $156 million, which was paid on October 15, 2009 to shareholders of record on September 30, 2009. During the nine months ended September 30, 2009, the Utility paid cash dividends totaling $10 million to holders of its outstanding series of preferred stock.On September 16, 2009, the Board of Directors of the Utility declared a cash dividend totaling $3 million on its outstanding series of preferred stock, payable on November 15, 2009 to shareholders of record on October 30, 2009. |
EARNINGS PER SHARE
EARNINGS PER SHARE | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
Earnings Per Share | NOTE 6: EARNINGS PER SHARE Earnings per common share (EPS) is calculated utilizing the two-class method, by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding during the period.In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities.PGE Corporations 9.5% Convertible Subordinated Notes (Convertible Subordinated Notes) are entitled to receive pass-through dividends and meet the criteria of participating securities.All of the participating securities participate in dividends on a 1:1 basis with shares of common stock. 22 The following is a reconciliation of PGE Corporations income available for common shareholders and weighted average shares of common stock outstanding for calculating basic earnings per share: Three Months Ended Nine Months Ended September 30, September 30, (in millions, except per share amounts) 2009 2008 2009 2008 Basic Income Available for Common Shareholders $ 318 $ 304 $ 947 $ 821 Less: distributed earnings to common shareholders 156 140 465 419 Undistributed earnings $ 162 $ 164 $ 482 $ 402 Allocation of undistributed earnings to common shareholders Distributed earnings to common shareholders $ 156 $ 140 $ 465 $ 419 Undistributed earnings allocated to common shareholders 155 156 461 382 Total common shareholders earnings $ 311 $ 296 $ 926 $ 801 Weighted average common shares outstanding, basic 370 357 367 356 Convertible Subordinated Notes 16 19 17 19 Weighted average common shares outstanding and participating securities 386 376 384 375 Net earnings per common share, basic Distributed earnings, basic (1) $ 0.42 $ 0.39 $ 1.27 $ 1.18 Undistributed earnings, basic 0.42 0.44 1.26 1.07 Total $ 0.84 $ 0.83 $ 2.53 $ 2.25 (1) Distributed earnings, basic may differ from actual per share amounts paid as dividends, as the EPS computation under GAAP requires the use of the weighted average, rather than the actual, number of shares outstanding. In calculating diluted EPS, PGE Corporation applies the if-converted method to reflect the dilutive effect of the Convertible Subordinated Notes to the extent that the impact is dilutive when compared to basic EPS.In addition, PGE Corporation applies the treasury stock method of reflecting the dilutive effect of outstanding stock-based compensation in the calculation of diluted EPS.The following is a reconciliation of PGE Corporations income available for common shareholders and weighted average shares of common stock outstanding for calculating diluted earnings per share for three and nine months ended September 30, 2009: September 30, 2009 |
DERIVATIVES AND HEDGING ACTIVIT
DERIVATIVES AND HEDGING ACTIVITIES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
Derivatives and Hedging Activities | NOTE 7: DERIVATIVES AND HEDGING ACTIVITIES Use of Derivative Instruments The Utility faces market risk primarily related to electricity and natural gas commodity prices.Substantially all of the Utilitys risk management activities involving derivatives occur to reduce the volatility of commodity costs on behalf of its customers.The CPUC and the FERC allow the Utility to charge customer rates designed to recover the Utilitys reasonable costs of providing services, including the cost to obtain and deliver electricity and natural gas.As these costs are passed through to customers, the Utilitys earnings are not exposed to the commodity price risk inherent in the purchase and sale of electricity and natural gas. The Utility uses both derivative and non-derivative contracts in managing its customers exposure to commodity-related price risk, including: forward contracts that commit the Utility to purchase a commodity in the future; swap agreements that require payments to or from counterparties based upon the difference between two prices for a predetermined contractual quantity; option contracts that provide the Utility with the right to buy a commodity at a predetermined price; and futures contracts that are exchange-traded contracts that commit the Utility to purchase a commodity or make a cash settlement at a specified price and future date. These instruments are not held for speculative purposes and are subject to certain limitations imposed by regulatory requirements. 24 Commodity-Related Price Risk Commodity-related price risk management activities that meet the definition of a derivative are recorded at fair value on the Condensed Consolidated Balance Sheets.Certain commodity-related price risk management activities reduce the cash flow variability associated with fluctuating commodity prices.Prior to September 2009, the Utility designated qualifying derivative transactions as cash flow hedges for accounting purposes.As long as the ratemaking mechanisms discussed above remain in place and the Utilitys risk management activities are carried out in accordance with CPUC directives, the Utility expects to fully recover from customers, in rates, all costs related to commodity-related price risk-related derivative instruments.Therefore, all unrealized gains and losses associated with the fair value of these derivative instruments, including those designated as cash flow hedges, are deferred and recorded within the Utilitys regulatory assets and liabilities on the Condensed Consolidated Balance Sheets. (See Note 3 of the Notes to the Condensed Consolidated Financial Statements.)Net realized gains or losses on derivative instruments related to price risk for commodities are recorded in the cost of electricity or the cost of natural gas with corresponding increases or decreases to regulatory balancing accounts for recovery from customers.As of September 30, 2009, the Utility de-designated all cash flow hedge relationships.Due to the regulatory accounting treatment described above, the de-designation of cash flow hedge relationships had no impact on Income Available for Common Shareholders or the Condensed Co |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
Fair Value Measurements | NOTE 8: FAIR VALUE MEASUREMENTS PGE Corporation and the Utility determine the fair value of certain assets and liabilities based on assumptions that market participants would use in pricing the assets or liabilities.PGE Corporation and the Utility utilize a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value and give precedence to observable inputs in determining fair value.An instruments level within the hierarchy is based on the lowest level of any significant input to the fair value measurement.See Note 12 of the Notes to the Consolidated Financial Statements in the 2008 Annual Report for further discussion of fair value measurements. The following table sets forth the fair value hierarchy by level of PGE Corporations and the Utilitys recurring fair value financial instruments at September 30, 2009.PGE Corporations and the Utilitys assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. PGE Corporation Fair Value Measurements at September 30, 2009 (in millions) Level 1 Level 2 Level 3 Total Assets: Money market investments (held by PGE Corporation) $ 185 $ - $ 5 $ 190 Nuclear decommissioning trusts Equity securities 1,081 - 6 1,087 U.S. government and agency issues 661 52 - 713 Municipal bonds and other - 183 - 183 Total nuclear decommissioning trusts (1) 1,742 235 6 1,983 Rabbi trusts-equity securities 76 - - 76 Long-term disability trust Equity securities 8 - 20 28 Corporate debt securities - - 101 101 Total long-term disability trust 8 - 121 129 Total assets $ 2,011 $ 235 $ 132 $ 2,378 Liabilities: Dividend participation rights $ - $ - $ 20 $ 20 Price risk management instruments(2) 25 85 157 267 Other - - 4 4 Total liabilities $ 25 $ 85 $ 181 $ 291 (1) Excludes deferred taxes on appreciation of investment value. (2) Balances include the impact of netting adjustments of $76 million to Level 1, $33 million to Level 2, and $88 million to Level 3. 28 Utility Fair Value Measurements at September 30, 2009 (in millions) Level 1 Level 2 Level 3 Total Assets: Nuclear decommissioning trusts Equity securities $ 1,081 $ - $ 6 $ 1,087 U.S. government and agency issues 661 52 - 713 Municipal bonds and other - 183 - 183 Total nuclear decommissioning trusts(1) 1,742 235 6 1,983 Long-term disability trust |
RELATED PARTY AGREEMENTS AND TR
RELATED PARTY AGREEMENTS AND TRANSACTIONS | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
Related Party Agreements and Transactions | NOTE 9: RELATED PARTY AGREEMENTS AND TRANSACTIONS The Utility and other subsidiaries provide and receive various services to and from their parent, PGE Corporation, and among themselves.The Utility and PGE Corporation exchange administrative and professional services in support of operations.Services provided directly to PGE Corporation by the Utility are generally priced at the higher of fully loaded cost (i.e., direct cost of goods or services and allocation of overhead costs) or fair market value, depending on the nature of the services.Services provided directly to the Utility by PGE Corporation are generally priced at the lower of fully loaded cost or fair market value, depending on the nature and value of the services.PGE Corporation also allocates various corporate administrative and general costs to the Utility and other subsidiaries using agreed upon allocation factors, including the number of employees, operating and maintenance expenses, total assets, and other cost allocation methodologies.Management believes that the methods used to allocate expenses are reasonable and meet the reporting and accounting requirements of its regulatory agencies. The Utilitys significant related party transactions were as follows: Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2009 2008 2009 2008 Utility revenues from: Administrative services provided to PGE Corporation $ 2 $ - $ 4 $ 2 Utility expenses from: Administrative services receivedfrom PGE Corporation $ 14 $ 34 $ 47 $ 86 Utility employee benefit due to PGE Corporation 4 5 13 16 At September 30, 2009 and December 31, 2008, the Utility had a receivable of $28 million and $29 million, respectively, from PGE Corporation included in Accounts receivable Related parties and Other Noncurrent Assets Related parties receivable on the Utilitys Condensed Consolidated Balance Sheets, and a payable of $14 million and $25 million, respectively, to PGE Corporation included in Accounts payable Related parties on the Utilitys Condensed Consolidated Balance Sheets. |
RESOLUTION OF REMAINING CHAPTER
RESOLUTION OF REMAINING CHAPTER 11 DISPUTED CLAIMS | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
Significant Matters Unresolved Since Bankruptcy Emergence Process For Resolution Of Remaining Claims [Text Block] | NOTE 10: RESOLUTION OF REMAINING CHAPTER 11 DISPUTED CLAIMS Various electricity suppliers filed claims in the Utilitys proceeding under Chapter 11 seeking payment for energy supplied to the Utilitys customers through the wholesale electricity markets operated by the CAISO and the California Power Exchange (PX) between May 2000 and June 2001.These claims, which the Utility disputes, are being addressed in various FERC and judicial proceedings in which the State of California, the Utility, and other electricity purchasers are seeking refunds from electricity suppliers, including municipal and governmental entities, for overcharges incurred in the CAISO and the PX wholesale electricity markets between May 2000 and June 2001. In connection with the Utilitys proceeding under Chapter 11, the Utility established an escrow account to fund future settlements and for the payment of disputed claims, which is included within Restricted cash on the Condensed Consolidated Balance Sheets.At September 30, 2009 and December 31, 2008, the Utility held $515 million and $1,212 million, respectively, in escrow, including interest earned, for payment of the remaining net disputed claims. While the FERC and judicial proceedings have been pending, the Utility entered into a number of settlements with various electricity suppliers to resolve some of these disputed claims and to resolve the Utilitys refund claims against these electricity suppliers.These settlement agreements provide that the amounts payable by the parties are, in some instances, subject to adjustment based on the outcome of the various refund offset and interest issues being considered by the FERC.The proceeds from these settlements, after deductions for contingencies based on the outcome of the various refund offset and interest issues being considered by the FERC, will continue to be refunded to customers in rates.Additional settlement discussions with other electricity suppliers are ongoing.Any net refunds, claim offsets, or other credits that the Utility receives from energy suppliers through resolution of the remaining disputed claims, either through settlement or the conclusion of the various FERC and judicial proceedings, will also be credited to customers. On August 26, 2009, following the approval by the FERC, the bankruptcy court presiding over the PXs bankruptcy case, and the bankruptcy court that retains jurisdiction over the Utilitys Chapter 11 proceeding, the Utility paid $700 million to the PX from the Utilitys escrow account to reduce the Utilitys liability for the remaining net disputed claims. The following table presents the changes in the remaining disputed claims liability and interest accrued from December 31, 2008 to September 30, 2009: 32 (in millions) Balance at December 31, 2008 $ 1,750 Interest accrued 45 Less: Supplier Settlements (90 ) Less: August 26, 2009 payment (700 ) Balance at September 30, 2009 $ 1,005 At September 30, 2009, the Utilitys net disputed claims liability was $1,005 million, consisting of $816 million of remaining disputed claims (classified on the Condensed Consolidated Balance S |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
Commitments and Contingencies | NOTE 11: COMMITMENTS AND CONTINGENCIES PGE Corporation and the Utility have substantial financial commitments in connection with agreements entered into to support the Utilitys operating activities.PGE Corporation and the Utility also have significant contingencies arising from their operations, including contingencies related to guarantees, regulatory proceedings, nuclear operations, environmental compliance and remediation, tax matters, and legal matters. Commitments Utility Third-Party Power Purchase Agreements As part of the ordinary course of business, the Utility enters into various agreements to purchase power and electric capacity.The price of purchased power may be fixed or variable.Variable pricing is generally based on the current market price of either gas or electricity at the date of purchase.Forward prices at September 30, 2009 are used to determine the undiscounted future expected payments for contracts with variable pricing terms.At September 30, 2009, the undiscounted future expected power purchase agreement payments were as follows: (in millions) 2009 $ 535 2010 2,165 2011 2,111 2012 2,211 2013 2,209 Thereafter 36,141 Total $ 45,372 Payments made by the Utility under power purchase agreements amounted to $1,809 million and $3,631 million for the nine months ended September 30, 2009 and September 30, 2008, respectively.The amounts above do not include payments related to the DWR purchases for the benefit of the Utilitys customers, as the Utility only acts as an agent for the DWR. 33 Some of the power purchase agreements that the Utility entered into with independent power producers that are qualifying co-generation facilities and qualifying small power production facilities (QFs) are treated as capital leases.The following table shows the future fixed capacity payments due under the QF contracts that are treated as capital leases.(These amounts are also included in the third-party power purchase agreements table above.)The fixed capacity payments are discounted to their present value in the table below using the Utilitys incremental borrowing rate at the inception of the leases.The amount of this discount is shown in the table below as the Amount representing interest. (in millions) 2009 $ 11 2010 50 2011 50 2012 50 2013 50 Thereafter 206 Total fixed capacity payments 417 Less: Amount representing interest 95 Present value of fixed capacity payments $ 322 Minimum lease payments associated with the lease obligation are included in Cost of electricity on PGE Corporations and the Utilitys Condensed Consolidated Statements of Income.The timing of the Utilitys recognition of the lease expense conforms to the ratemaking treatment for the Utilitys recovery of the cost of electricity.The QF contracts that are treated as capital leases expire between April 2014 and September 2021. Capacity payments are based on the QFs total available capacity and contractual capacity commitment.Capacity payments may be adjusted if the QF exceeds or fails to meet perfo |
Document Information
Document Information | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Document Period End Date | 2009-09-30 |
Amendment Flag | false |
Entity Information
Entity Information (USD $) | |||
9 Months Ended
Sep. 30, 2009 | Oct. 27, 2009
| Jun. 30, 2008
| |
Entity Information [Line Items] | |||
Entity Registrant Name | PG&E CORP | ||
Entity Central Index Key | 0001004980 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $14,179,000 | ||
Entity Common Stock, Shares Outstanding | 370,960,212 |