VII. Rate Base and Revenue Requirement

The revenue requirement effect of the reduced return on equity and reduced rate of return is based on 1) for PG&E, the estimates of PG&E and ORA from PG&E's general rate case A.97-12-020, Exh. 474 and GRC briefs, and 2) for SDG&E, the rate base established in its distribution PBR D.98-12-038. We emphasize that the revenue requirement effect for PG&E is an estimate which will change when the distribution rate base for the utility is finally determined. The projected rate base for each utility is:

                    Electric Gas

SDG&E

$1,385,722,000

$452,863,000

PG&E

        PG&E Est.

        ORA Est.

$7,003,639,000

$5,899,013,000

$2,175,595,000

$2,010,056,000

Applying the rate of return found reasonable, we estimate the annual revenue requirement is reduced as follows:

                    Electric Gas

    

SDG&E

($14,585,000)

($4,779,000)

  

PG&E

        PG&E Est.

        ORA Est.

($46,280,000)

($38,980,000)

($14,500,000)

($13,396,000)

  

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