3. PG&E's Current Financing Arrangements

The types and amount of debt and equity that PG&E is currently authorized to issue are set forth in Appendix A of this Opinion. The Commission authorized most of PG&E's current debt in D.04-01-024 to finance PG&E's emergence from bankruptcy (referred to hereafter as "exist financing").⁵ Pursuant to this authority, PG&E issued $6.7 billion of First Mortgage Bonds (FMBs) and obtained two credit facilities. One of these facilities is an $850 million revolving credit facility; the other is a $650 million accounts receivable (A/R) financing facility. PG&E intends to use these two credit facilities to cover operating expenses, seasonal fluctuations in cash flows, and for letters of credit to support purchases of natural gas and electricity. In addition, PG&E's exit financing includes reimbursement agreements under which lenders issued, on the Effective Date, the following: (1) $620 million in new letters of credit to support $614 million of previously issued pollution control bonds; (2) a term-loan facility of $345 million that was used to purchase certain pollution control bonds on the Effective Date; and (3) four amended reimbursement agreements with lenders who had purchased $454 million in reimbursement obligations owed to the issuers of drawn letters of credit that backed certain pollution control bonds. PG&E's obligations under the $850 million revolving credit facility and the reimbursement agreements are secured with FMBs. PG&E states that the Commission's Financing Team approval all components of PG&E's exit financing in letters dated October 24, 2003, March 4, 2004, and April 1, 2004.

⁵ D.04-01-024, OPs 1 and 5.