I (3)- VEBA 3 Contrib. 1998

Appendix I

Note 4: Effect on Annual Depreciation Expense from Reduction in TBO Amortization Expense

Pacific capitalized a portion of its TBO amortization expense. Thus, reducing TBO amortization expense has the effect of reducing (i) the capitalized amount of TBO amortization expense, and (ii) depreciation of previously capitalized TBO amortization expense. The aforementioned reduction to Pacific's depreciation expense is offset, at least in part, by an increase in deprecation expense that would have occurred due to the capitalization (and subsequent deprecation) of a portion of the VEBA 3 contributions that should have been recognized as an expense in 1989 and 1990.

Note 5: Reduction to 1998 PBOP Reg. Asset Write-Off for VEBA 3 Contributions

Decreasing Pacific's SFAS 106 accruals for the VEBA 3 contributions decreases the size of Pacific's PBOP regulatory asset in 1998 by the amount of the VEBA 3 contributions included in Pacific's SFAS 106 accruals during 1993 - 1998.

28.

Cumulative After-Tax Reduction to PBOP Reg. Asset During 1993 - 1998 Due to Reduction to TBO Amortiz. Expense During 1993 - 1998

18,885

Line 16

29.

After-Tax Reduction to PBOP Reg. Asset for VEBA 3 Contributions Included in the Reg. Asset as Part of the TBO Write-Off in 1993

22,673

Line 27

30.

After-Tax VEBA 3 Contributions Included in 1998 PBOP Reg. Asset Write-Off

41,557

Line 28 + Line 29


Appendix I

Note 4: Effect on Annual Depreciation Expense from Reduction in TBO Amortization Expense

	Pacific capitalized a portion of its TBO amortization expense. Thus, reducing TBO amortization expense has the effect of reducing (i) the capitalized amount of TBO amortization expense, and (ii) depreciation of previously capitalized TBO amortization expense. The aforementioned reduction to Pacific's depreciation expense is offset, at least in part, by an increase in deprecation expense that would have occurred due to the capitalization (and subsequent deprecation) of a portion of the VEBA 3 contributions that should have been recognized as an expense in 1989 and 1990.




Note 5: Reduction to 1998 PBOP Reg. Asset Write-Off for VEBA 3 Contributions

	Decreasing Pacific's SFAS 106 accruals for the VEBA 3 contributions decreases the size of Pacific's PBOP regulatory asset in 1998 by the amount of the VEBA 3 contributions included in Pacific's SFAS 106 accruals during 1993 - 1998.


28.	Cumulative After-Tax Reduction to PBOP Reg. Asset During 1993 - 1998 Due to Reduction to TBO Amortiz. Expense During 1993 - 1998	18,885	Line 16

29.	After-Tax Reduction to PBOP Reg. Asset for VEBA 3 Contributions Included in the Reg. Asset as Part of the TBO Write-Off in 1993	22,673	Line 27

30.	After-Tax VEBA 3 Contributions Included in 1998 PBOP Reg. Asset Write-Off	41,557	Line 28 + Line 29