7. Assignment of Proceeding

John A. Bohn is the assigned Commissioner and Thomas R. Pulsifer is the assigned Administrative Law Judge in this proceeding.

Findings of Fact

1. PG&E was previously authorized by D.04-10-037 to issue up to $2.5 billion of short-term debt to cover working capital fluctuations and for energy procurement-related purposes.

2. PG&E projects a need to issue up to $1.5 billion of additional unrestricted short-term debt, using the same types of debt instruments and on the same conditions as was authorized by D.04-10-037.

3. With the additional authority being sought in this proceeding, PG&E's aggregate short-term debt authorization will be $4 billion, including $500 million which was previously restricted to certain contingencies.

4. PG&E claims the additional short-term borrowing authority being requested will primarily be needed to provide cash collateral to counterparties in connection with various energy procurement transactions, including electric power and natural gas hedges, electric power and gas purchases, and power plant tolling contracts.

5. The additional short-term borrowing authority being requested will also provide PG&E with flexibility to avoid issuing long-term securities on onerous terms and to withstand longer periods of time when the bond markets may be inaccessible.

6. PG&E provided a response to the Commission staff standing data request which set forth detailed information regarding projected capital expenditures, cash flows, capital financing, and historical financing authorizations in support of its request for the additional $1.5 billion in short-term debt borrowing authority.

Conclusions of Law

1. This is a ratesetting proceeding.

2. This is an uncontested matter, and there is no need for hearings.

3. The Commission has broad discretion to determine if a utility should be authorized to issue short-term debt pursuant to § 816, et seq.

4. The primary standard used by the Commission is whether a utility has demonstrated a reasonable need to issue short-term debt for proper purposes.

5. Applicant has demonstrated that the request for authorization for an additional $1.5 billion in short-term debt borrowing capacity is in the public interest and should be granted.

6. This opinion does not address the reasonableness of any expenditures made by PG&E with the proceeds from the short-term debt authorized herein, or the cost, terms, or conditions of such short-term debt.

ORDER

IT IS ORDERED that:

1. Application (A.) 08-12-014 is granted pursuant to Pub. Util. Code §§ 701.5, 816 - 830, and 851.

2. Pacific Gas and Electric Company is authorized to issue an additional
$1.5 billion of short-term debt.

3. Pacific Gas and Electric Company may report on a quarterly basis all the information required by General Order 24-B with respect to debt issued pursuant to this Order. Pacific Gas and Electric Company shall report this information on a monthly basis if directed to do so by Commission staff.

4. Pursuant to Pub. Util. Code § 1904(b) and § 1904.1, Pacific Gas and Electric Company shall remit to the Commission's Fiscal Office a check for $756,000. The decision number of this decision shall appear on the face of the check.

5. The authority granted by this decision shall not become effective until Pacific Gas and Electric Company remits the check for $756,000 to the Commission's Fiscal Office.

6. Application 08-12-014 is closed.

This order is effective today.

Dated May 7, 2009, at San Francisco, California.

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