2. Background

Decision 04-10-037 authorized PG&E to do a number of things pursuant to §§ 701.5, 816 - 830, and 851, including the following:

1. Issue $1.538 billion of long-term debt and preferred stock in any combination, as long as the selected combination results in a capital structure that complies with Commission requirements.

2. Use the $1.538 billion of authorized long-term debt and preferred stock for only the following purposes:

a. Finance capital expenditures.

b. Retire long-term debt.

c. Redeem preferred stock.

3. Pledge gas and electric accounts receivable for the purpose of procuring gas and electricity for PG&E's customers.

4. Issue contingent First Mortgage Bonds as security for other debt.

On November 29, 2004, PG&E filed a petition to modify D.04-10-037. Notice of the petition appeared in the Commission's Daily Calendar on December 1, 2004. There were no protests or other responses to the petition.

PG&E's petition is subject to Commission approval pursuant to §§ 816 et seq., and 851. The Commission has broad discretion under these statutes to approve, modify, or reject PG&E's petition.