ALJ/HMD/lmc* DRAFT Item H-17a

2/08/01

Decision ALTERNATE DRAFT DECISION OF COMMISSIONER DUQUE

(Mailed 02/07/01)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Expedited Application of Pacific Gas and Electric Company (U 39 M) to (1) Issue, Sell and Deliver One or More Series of Its First and Refunding Mortgage Bonds, Debentures, Subordinated Deferrable Interest Debentures, Promissory Notes and/or Other Evidences of Indebtedness in Connection with Domestic or Euro-Market offerings, to Guarantee the Obligations of Others in Respect of the Issuance of Securities and to Arrange For Standby Letters of Credit as Performance Guarantees, the Total Aggregate Principal Amount of Such Issuances and Guarantees Not to Exceed $2 Billion; (2) Enter into One or More Interest Rate Caps, Collars and Swaps; (3) Issue Variable Rate Debt (Including Fixed Rate Debt Swapped to a Variable Rate) to Finance Balancing Account Undercollections; and (4) Obtain an Exemption from the Competitive Bidding Rule.

Application 00-10-029 (Filed October 18, 2000)

OPINION

OPINION 1

1. SUMMARY 2

2. BACKGROUND 2

3. PG&E'S PETITION TO MODIFY D.00-12-064 4

4. DISCUSSION 6

5. PUBLIC UTILITIES CODE SECTION 1904(B) 9

6. CATEGORY AND NEED FOR HEARING 10

7. PUBLIC UTILITIES CODE SECTION 311 11

FINDINGS OF FACT 11

CONCLUSIONS OF LAW 13

ORDER 16

1. Summary

In response to a petition to modify Decision (D.) 00-12-064 filed by Pacific Gas and Electric Company (PG&E), this decision authorizes PG&E to (1) issue $4 billion of additional short-term and long-term debt¹ to finance the undercollection in its Transition Revenue Account (TRA); and (2) exclude from its authorized capital structure any debt issued by PG&E to finance its TRA undercollection. This decision grants PG&E's request to finance its TRA undercollection with debt secured by a pledge of PG&E's property, plant, equipment, accounts receivable, and other assets. This decision also denies PG&E's request for a waiver of the fee that it is required to pay under Pub. Util. Code § 1904(b)² for authority to issue debt.