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<p align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SECURITIES AND EXCHANGE COMMISSION</p>
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<p align="center"><br />
 </p>
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<p align="center">Washington, D.C.&nbsp; 20549</p>
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<p align="center">FORM 8-K</p>
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<p align="center">CURRENT REPORT</p>
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<p align="center">Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934</p>
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<p align="center"><br />
 </p>
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<p align="center">Date of Report: January 6, 2003</p>
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<p align="center"><br />
 </p>
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<p align="center"><br />
 Commission<br />
 File<br />
 Number</p>
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<p align="center">Exact Name of<br />
 Registrant<br />
 as specified in<br />
 its charter</p>
</td>
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<p align="center"><br />
 State or other<br />
 Jurisdiction of<br />
 Incorporation</p>
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<p align="center"><br />
 IRS Employer<br />
 &nbsp; Identification<br />
 Number</p>
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<p align="center">_____________</p>
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<p align="center">_____________</p>
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<p align="center">_____________</p>
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<p align="center">_____________</p>
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<p align="center">1-12609</p>

<p align="center">1-2348</p>
</td>
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<p align="center">PG&amp;E Corporation</p>

<p align="center">Pacific Gas and<br />
 Electric Company</p>
</td>
<td valign="top">
<p align="center">California</p>

<p align="center">California</p>
</td>
<td valign="top">
<p align="center">94-3234914</p>

<p align="center">94-0742640</p>

<p align="center"><br />
 </p>
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<p align="center">Pacific Gas and Electric Company<br />
 77 Beale Street, P. O. Box 770000<br />
 San Francisco, California&nbsp;&nbsp;94177</p>
</td>
<td colspan="2" valign="top">
<p align="center">PG&amp;E Corporation<br />
 One Market, Spear Tower, Suite 2400<br />
 San Francisco, California&nbsp;&nbsp;94105</p>
</td>
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<td colspan="4" valign="top"></td>
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<td colspan="4" valign="top">
<p align="center">(Address of principal executive offices) (Zip
Code)</p>
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<p align="center"><br />
 </p>
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<td colspan="2" valign="top">
<p align="center">Pacific Gas and Electric Company<br />
 (415) 973-7000</p>
</td>
<td colspan="2" valign="top">
<p align="center">PG&amp;E Corporation<br />
 (415) 267-7000</p>
</td>
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<td colspan="4" valign="top"></td>
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<td colspan="4" valign="top">
<p align="center">(Registrant's telephone number, including area
code)</p>
</td>
</tr>

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<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
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<p><br />
</p>

<div align="center">
<hr size="2" width="100%" align="center" />
</div>

<p>Item 5. Other Events</p>

<p></p>

<p>A.&nbsp; Resumption of Power Procurement</p>

<p></p>

<p><i>CPUC Operating Order<br />
</i></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December 19, 2002, the California Public Utilities Commission
(CPUC) adopted an operating order requiring Pacific Gas and
Electric Company (Utility) to perform the operational, dispatch,
and administrative functions for the California Department of Water
Resources&rsquo; (DWR) long-term power purchase contracts allocated
to the Utility&rsquo;s retail customers, as of January 1, 2003.
<b>&nbsp;</b> (Similar operating orders were also adopted for the
other two California investor-owned utilities (IOUs).)&nbsp; The
operating order sets forth the terms and conditions under which the
Utility will administer the DWR contracts and requires the Utility
to dispatch all the generating assets within its portfolio on a
least-cost basis for the benefit of the Utility&rsquo;s
ratepayers.&nbsp; The order specifies that the DWR will retain
legal and financial responsibility for the contracts and that the
order does not result in an assignment of the allocated DWR
contracts to the Utility.</p>

<p></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
CPUC had previously issued a decision allocating the DWR contracts
among the IOUs&rsquo; customers for operational and administrative
purposes and requiring the IOUs to perform all of the day-to-day
scheduling, dispatch and administrative functions for the DWR
contracts allocated to their portfolios as of January 1,
2003.&nbsp; In its allocation decision, the CPUC indicated that it
would review annually the reasonableness of the IOUs'
administration of the operationally allocated DWR contracts,
including whether the IOUs have dispatched their overall portfolio
of electric resources, including the allocated DWR contracts, on a
least cost basis. While the IOUs would not bear the risk of being
unable to fully pass through the procurement costs associated with
these contracts because they would be recoverable through the DWR's
revenue requirement, the IOUs will be held to a reasonableness
standard in their scheduling and dispatch decision-making and their
administration of the contracts.&nbsp; If the Utility's scheduling
or dispatch decisions or its administration of these allocated
contracts were found by the CPUC to be unreasonable in conjunction
with the scheduling and dispatch of the Utility's retained
generation, the Utility could bear the risk of not being able to
fully recover its costs in the Utility's rates or otherwise be held
responsible for its action.&nbsp; On December 19, 2002, in a
separate interim opinion<i>,</i> the CPUC established that the
maximum risk of potential disallowance each IOU should face for all
of its procurement activities, including the operation and dispatch
of DWR&rsquo;s contracts, should be limited to twice the
IOU&rsquo;s annual administrative costs of managing procurement
activities.&nbsp; The Utility anticipates that its annual
administrative costs of managing procurement activities will be
approximately $25 million in 2003.</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the allocation decision, the CPUC ordered the IOUs to work with the
DWR to facilitate a smooth transition of the administration of the
allocated DWR contracts, and ordered the IOUs and the DWR to file
proposed operational agreements governing the allocated DWR
contracts.&nbsp; When the operating order was issued, the DWR and
the IOUs had not yet finalized their separate operating agreements.
In its decision issuing the operating order, the CPUC noted that if
the IOUs and the DWR eventually reach mutual agreement, the CPUC
would consider modifying its decision on an expedited basis to
terminate the operating order and approve the operating agreement,
assuming that the operating agreement adopted a framework that was
substantially similar to the one imposed by the operating
order.</p>

<p><i></i></p>

<p><i>Operating Agreement<br />
 </i></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December 20, 2002, the Utility and the DWR executed an operating
agreement following several months of negotiation.&nbsp; The
agreement provides that it will not become effective unless
approved by the CPUC.&nbsp; The Utility filed the operating
agreement with the CPUC on December 20, 2002 and requested that the
CPUC act by December 31, 2002 either to terminate the operating
order and approve the operating agreement or to stay its decision
adopting the operating order.&nbsp;</p>

<p></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Further,
on December 27, 2002, the U.S. Bankruptcy Court for the Northern
District of California (Bankruptcy Court) authorized the Utility to
begin performance under the operating agreement effective January
1, 2003.&nbsp;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although
the operating order and the operating agreement have fundamentally
the same objectives, the operating agreement, among other
things:&nbsp; (1) provides an adequate contractual basis for
establishing a limited agency relationship between the Utility and
the DWR; (2) limits the Utility&rsquo;s contractual liability to
the DWR to $5 million per year plus 10% of damages in excess of $5
million with a limit of $50 million over the term of the agreement;
and (3) clarifies that the DWR is not in the business of reviewing
Utility least-cost dispatch, other than to verify compliance with
the supplier contracts.</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
CPUC took no action on the Utility&rsquo;s requests to make the
operating agreement effective at its final meeting of the year on
December 30, 2002.&nbsp; On December 30, 2002, the Utility filed an
application for rehearing of the operating order decision with the
CPUC.&nbsp; On January 1, 2003, after having reserved all rights
associated with challenges to the operating order, the Utility
commenced providing contract administration, scheduling and
dispatch services to the DWR under the CPUC&rsquo;s operating
order.</p>

<p>Servicing Order<br />
</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December 19, 2002, the CPUC issued an order approving the 2003
servicing arrangements between the DWR and the IOUs.&nbsp; The
servicing arrangements set forth the terms and conditions under
which each IOU provides the transmission and distribution of the
DWR-purchased electricity; addresses billing, collection and
related services on behalf of the DWR; and addresses the
DWR&rsquo;s compensation to the IOUs for providing these
services.&nbsp; These arrangements require further modification in
order to account for the allocation of the DWR&rsquo;s long-term
contracts to the IOUs.&nbsp; On January 2, 2003, the Utility filed
an application for rehearing of the servicing order decision with
the CPUC.</p>

<p><i>Approval of Procurement Plan<br />
</i></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
previously reported, on October 24, 2002, the CPUC ordered the IOUs
to resume procurement on January 1, 2003.&nbsp; As part of the
resumption of the procurement function, each IOU would procure
power for that portion of its customers&rsquo; needs that is not
covered by the combination of the allocation of power from existing
DWR contracts to that IOU&rsquo;s customers and the IOU&rsquo;s own
power resources and contracts (referred to as the residual net open
position).&nbsp; The Utility&rsquo;s proposed plan of
reorganization (Utility&rsquo;s Plan) provided that the Utility
would not be obligated to assume responsibility for its residual
net open position, unless certain conditions were satisfied,
including the Utility&rsquo;s receipt of an investment grade credit
rating.&nbsp; On December 26, 2002, the Utility amended the
Utility&rsquo;s Plan to eliminate the condition that the Utility
receive an investment grade credit rating before reassuming
procurement responsibility.&nbsp; Until the Utility receives an
investment grade credit rating, the Independent System Operator
(ISO) requires the Utility to post collateral in order to resume
procurement activities.&nbsp; On December 23, 2002, the Bankruptcy
Court authorized the Utility to use up to $150 million of its cash
to collateralize procurement costs pursuant to ISO
tariffs.&nbsp;</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
previously reported, the Utility entered into several interim
procurement contracts in October 2002 that would have obligated the
Utility and the DWR upon the occurrence of certain
conditions.&nbsp; The contracts were not finalized before January
1, 2003, when the DWR&rsquo;s authority to enter such contracts
expired, leaving the Utility to manage its residual net open
position by entering into new bilateral contracts and making spot
market purchases as set forth in the Utility&rsquo;s revised 2003
interim procurement plan, filed with the CPUC on November 12,
2002.&nbsp; Despite the lack of additional contracts, the Utility
currently expects its residual net open position for 2003 to be
immaterial.&nbsp;</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December 19, 2002, the CPUC issued an interim opinion
<i></i>adopting, in large part but with modifications, the
Utility&rsquo;s procurement plan.&nbsp;&nbsp; The CPUC found that
the maximum risk of potential disallowance each IOU should face for
all of its procurement activities should be limited to twice its
annual administrative costs of managing procurement
activities.&nbsp; As noted above in the discussion of the
CPUC&rsquo;s operating order, the Utility anticipates that its
annual administrative costs of managing procurement activities will
be approximately $25 million in 2003.&nbsp; While the
Utility&rsquo;s procurement plan covered procurement activities
only for the 2003 calendar year, the CPUC authorized the IOUs to
extend their planning into the first quarter of 2004, directing
them to hedge their 2004 first quarter residual net short positions
with transactions entered into in 2003.</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
CPUC authorized the Utility to file an expedited trigger
application at any time that its forecasts indicate it will face an
undercollection of procurement costs in excess of 5 percent of its
prior year&rsquo;s generation revenues, excluding amounts collected
for the DWR.&nbsp; The Utility currently estimates that its 5
percent threshold amount will be approximately $250 million.&nbsp;
On October 24, 2002, the CPUC directed the IOUs, when filing an
expedited trigger application, to propose an amortization period
for the 5 percent amount of not less than 90 days to insure timely
recovery of the undercollected procurement costs.</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, the CPUC adopted, on a preliminary basis, the
Utility&rsquo;s starting Energy Resource Recovery Account (ERRA)
revenue requirement of $2.035 billion.&nbsp; The Utility will
record its procurement costs in the ERRA.&nbsp; The CPUC will
examine the Utility&rsquo;s forecast of costs for 2003 and will
finalize the Utility&rsquo;s starting revenue requirement when it
reviews the Utility&rsquo;s ERRA application to be filed on
February 1, 2003.</p>

<p>The CPUC also clarified its October 2002 decision on the amount
of renewables the IOUs are to purchase each year under the new
Renewables Portfolio Standard, indicating that each year the IOUs
are to purchase enough renewables to generate a net 1 percent
increase over the 2001 baseline renewables amount.&nbsp;</p>

<p>The Utility intends to file its proposed long-term procurement
plan (covering the next 20 years) on April 1, 2003.&nbsp; The CPUC
has stated that it plans to issue a final decision on the
IOUs&rsquo; long-term procurement plans in November 2003.</p>

<p>B.&nbsp; Motion to Extend Exclusivity</p>

<p>On December 20, 2002, the Utility filed a motion with the
Bankruptcy Court requesting the court to further extend the period
during only which the Utility (with the exception of the CPUC and
the Official Committee of Unsecured Creditors) can file a proposed
plan of reorganization for the Utility from December 31, 2002 to
April 30, 2003. A hearing on this motion has been set for January
22, 2003.&nbsp;</p>

<p>C.&nbsp; 2003 General Rate Case (GRC)</p>

<p>Also, on December 19, 2002, the CPUC approved the
Utility&rsquo;s motion for an order making the revenue requirements
determined in the Utility&rsquo;s Test Year 2003 GRC effective
January 1, 2003, even though the CPUC will not issue a final
decision on the 2003 GRC until after that date.&nbsp;</p>

<p></p>

<p>D.&nbsp; Pacific Gas and Electric Company Bankruptcy - Monthly
Operating Report</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December 30, 2002, the Utility filed its monthly operating report
for the month ended November 30, 2002 with the Bankruptcy
Court.&nbsp; The Utility's monthly operating report includes an
unaudited income statement for the month and an unaudited balance
sheet dated as of the end of the month.&nbsp; These unaudited
financial statements are attached as Exhibit 99 to this report.
Although not included in Exhibit 99, the monthly operating report
also includes a statement of receipts and disbursements, as well as
other information.&nbsp; The preliminary financial statements were
prepared using certain assumptions and estimates that are subject
to revision.&nbsp; Any adjustments for these estimates (based upon
changes in facts and circumstances, further analysis, and other
factors) will be reflected in the financial statements in the
period during which such adjustments are made.&nbsp; These
adjustments could have a material impact on reported results in the
future.</p>

<p>Item 7.&nbsp; Financial Statements, Pro Forma Financial
Information, and Exhibits</p>

<p>Exhibit 99 - Pacific Gas and Electric Company Income Statement
for the month ended November 30, 2002, and Balance Sheet dated
November 30, 2002.</p>

<br clear="all" />


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<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>SIGNATURE</p>
</td>
</tr>
</table>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their
behalf by the undersigned thereunto duly authorized.</p>

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<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>PG&amp;E CORPORATION<br />
 </p>
</td>
</tr>

<tr>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>By:&nbsp;&nbsp;&nbsp; LINDA Y.H. CHENG</p>
</td>
</tr>

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

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<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LINDA Y.H. CHENG<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate
Secretary<br />
<br />
 </p>
</td>
</tr>

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>PACIFIC GAS AND ELECTRIC COMPANY<br />
 </p>
</td>
</tr>

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>By:&nbsp;&nbsp;&nbsp; LINDA Y.H. CHENG</p>
</td>
</tr>

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>&nbsp;&nbsp; &nbsp; <u>&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LINDA Y.H. CHENG</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate Secretary</p>
</td>
</tr>
</table>

<p>Dated:&nbsp; January 6, 2003</p>
</div>
</body>
</html>
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{"company-data": {"conformed-name": "PACIFIC GAS & ELECTRIC CO", "cik": "0000075488", "assigned-sic": "4931", "irs-number": "940742640", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-02348", "film-number": "03505663"}, "business-address": {"street1": "77 BEALE ST", "street2": "P O BOX 770000", "city": "SAN FRANCISCO", "state": "CA", "zip": "94177", "phone": "4152677000"}, "mail-address": {"street1": "77 BEALE STREET", "street2": "P O BOX 770000", "city": "SAN FRANCISCO", "state": "CA", "zip": "94177"}}
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report: January 6, 2003
Commission
File
Number
Exact Name of
Registrant
as specified in
its charter
State or other
Jurisdiction of
Incorporation
IRS Employer
Identification
Number
_____________
_____________
_____________
_____________
1-12609
1-2348
PG&E Corporation
Pacific Gas and
Electric Company
California
California
94-3234914
94-0742640
Pacific Gas and Electric Company
77 Beale Street, P. O. Box 770000
San Francisco, California  94177
PG&E Corporation
One Market, Spear Tower, Suite 2400
San Francisco, California  94105
(Address of principal executive offices) (Zip
Code)
Pacific Gas and Electric Company
(415) 973-7000
PG&E Corporation
(415) 267-7000
(Registrant's telephone number, including area
code)
Item 5. Other Events
A.  Resumption of Power Procurement
CPUC Operating Order
On
December 19, 2002, the California Public Utilities Commission
(CPUC) adopted an operating order requiring Pacific Gas and
Electric Company (Utility) to perform the operational, dispatch,
and administrative functions for the California Department of Water
Resources' (DWR) long-term power purchase contracts allocated
to the Utility's retail customers, as of January 1, 2003.
(Similar operating orders were also adopted for the
other two California investor-owned utilities (IOUs).)  The
operating order sets forth the terms and conditions under which the
Utility will administer the DWR contracts and requires the Utility
to dispatch all the generating assets within its portfolio on a
least-cost basis for the benefit of the Utility's
ratepayers.  The order specifies that the DWR will retain
legal and financial responsibility for the contracts and that the
order does not result in an assignment of the allocated DWR
contracts to the Utility.
The
CPUC had previously issued a decision allocating the DWR contracts
among the IOUs' customers for operational and administrative
purposes and requiring the IOUs to perform all of the day-to-day
scheduling, dispatch and administrative functions for the DWR
contracts allocated to their portfolios as of January 1,
2003.  In its allocation decision, the CPUC indicated that it
would review annually the reasonableness of the IOUs'
administration of the operationally allocated DWR contracts,
including whether the IOUs have dispatched their overall portfolio
of electric resources, including the allocated DWR contracts, on a
least cost basis. While the IOUs would not bear the risk of being
unable to fully pass through the procurement costs associated with
these contracts because they would be recoverable through the DWR's
revenue requirement, the IOUs will be held to a reasonableness
standard in their scheduling and dispatch decision-making and their
administration of the contracts.  If the Utility's scheduling
or dispatch decisions or its administration of these allocated
contracts were found by the CPUC to be unreasonable in conjunction
with the scheduling and dispatch of the Utility's retained
generation, the Utility could bear the risk of not being able to
fully recover its costs in the Utility's rates or otherwise be held
responsible for its action.  On December 19, 2002, in a
separate interim opinion
,
the CPUC established that the
maximum risk of potential disallowance each IOU should face for all
of its procurement activities, including the operation and dispatch
of DWR's contracts, should be limited to twice the
IOU's annual administrative costs of managing procurement
activities.  The Utility anticipates that its annual
administrative costs of managing procurement activities will be
approximately $25 million in 2003.
In
the allocation decision, the CPUC ordered the IOUs to work with the
DWR to facilitate a smooth transition of the administration of the
allocated DWR contracts, and ordered the IOUs and the DWR to file
proposed operational agreements governing the allocated DWR
contracts.  When the operating order was issued, the DWR and
the IOUs had not yet finalized their separate operating agreements.
In its decision issuing the operating order, the CPUC noted that if
the IOUs and the DWR eventually reach mutual agreement, the CPUC
would consider modifying its decision on an expedited basis to
terminate the operating order and approve the operating agreement,
assuming that the operating agreement adopted a framework that was
substantially similar to the one imposed by the operating
order.
Operating Agreement
On
December 20, 2002, the Utility and the DWR executed an operating
agreement following several months of negotiation.  The
agreement provides that it will not become effective unless
approved by the CPUC.  The Utility filed the operating
agreement with the CPUC on December 20, 2002 and requested that the
CPUC act by December 31, 2002 either to terminate the operating
order and approve the operating agreement or to stay its decision
adopting the operating order.
Further,
on December 27, 2002, the U.S. Bankruptcy Court for the Northern
District of California (Bankruptcy Court) authorized the Utility to
begin performance under the operating agreement effective January
1, 2003.
Although
the operating order and the operating agreement have fundamentally
the same objectives, the operating agreement, among other
things:  (1) provides an adequate contractual basis for
establishing a limited agency relationship between the Utility and
the DWR; (2) limits the Utility's contractual liability to
the DWR to $5 million per year plus 10% of damages in excess of $5
million with a limit of $50 million over the term of the agreement;
and (3) clarifies that the DWR is not in the business of reviewing
Utility least-cost dispatch, other than to verify compliance with
the supplier contracts.
The
CPUC took no action on the Utility's requests to make the
operating agreement effective at its final meeting of the year on
December 30, 2002.  On December 30, 2002, the Utility filed an
application for rehearing of the operating order decision with the
CPUC.  On January 1, 2003, after having reserved all rights
associated with challenges to the operating order, the Utility
commenced providing contract administration, scheduling and
dispatch services to the DWR under the CPUC's operating
order.
Servicing Order
On
December 19, 2002, the CPUC issued an order approving the 2003
servicing arrangements between the DWR and the IOUs.  The
servicing arrangements set forth the terms and conditions under
which each IOU provides the transmission and distribution of the
DWR-purchased electricity; addresses billing, collection and
related services on behalf of the DWR; and addresses the
DWR's compensation to the IOUs for providing these
services.  These arrangements require further modification in
order to account for the allocation of the DWR's long-term
contracts to the IOUs.  On January 2, 2003, the Utility filed
an application for rehearing of the servicing order decision with
the CPUC.
Approval of Procurement Plan
As
previously reported, on October 24, 2002, the CPUC ordered the IOUs
to resume procurement on January 1, 2003.  As part of the
resumption of the procurement function, each IOU would procure
power for that portion of its customers' needs that is not
covered by the combination of the allocation of power from existing
DWR contracts to that IOU's customers and the IOU's own
power resources and contracts (referred to as the residual net open
position).  The Utility's proposed plan of
reorganization (Utility's Plan) provided that the Utility
would not be obligated to assume responsibility for its residual
net open position, unless certain conditions were satisfied,
including the Utility's receipt of an investment grade credit
rating.  On December 26, 2002, the Utility amended the
Utility's Plan to eliminate the condition that the Utility
receive an investment grade credit rating before reassuming
procurement responsibility.  Until the Utility receives an
investment grade credit rating, the Independent System Operator
(ISO) requires the Utility to post collateral in order to resume
procurement activities.  On December 23, 2002, the Bankruptcy
Court authorized the Utility to use up to $150 million of its cash
to collateralize procurement costs pursuant to ISO
tariffs.
As
previously reported, the Utility entered into several interim
procurement contracts in October 2002 that would have obligated the
Utility and the DWR upon the occurrence of certain
conditions.  The contracts were not finalized before January
1, 2003, when the DWR's authority to enter such contracts
expired, leaving the Utility to manage its residual net open
position by entering into new bilateral contracts and making spot
market purchases as set forth in the Utility's revised 2003
interim procurement plan, filed with the CPUC on November 12,
2002.  Despite the lack of additional contracts, the Utility
currently expects its residual net open position for 2003 to be
immaterial.
On
December 19, 2002, the CPUC issued an interim opinion
adopting, in large part but with modifications, the
Utility's procurement plan.   The CPUC found that
the maximum risk of potential disallowance each IOU should face for
all of its procurement activities should be limited to twice its
annual administrative costs of managing procurement
activities.  As noted above in the discussion of the
CPUC's operating order, the Utility anticipates that its
annual administrative costs of managing procurement activities will
be approximately $25 million in 2003.  While the
Utility's procurement plan covered procurement activities
only for the 2003 calendar year, the CPUC authorized the IOUs to
extend their planning into the first quarter of 2004, directing
them to hedge their 2004 first quarter residual net short positions
with transactions entered into in 2003.
The
CPUC authorized the Utility to file an expedited trigger
application at any time that its forecasts indicate it will face an
undercollection of procurement costs in excess of 5 percent of its
prior year's generation revenues, excluding amounts collected
for the DWR.  The Utility currently estimates that its 5
percent threshold amount will be approximately $250 million. 
On October 24, 2002, the CPUC directed the IOUs, when filing an
expedited trigger application, to propose an amortization period
for the 5 percent amount of not less than 90 days to insure timely
recovery of the undercollected procurement costs.
In
addition, the CPUC adopted, on a preliminary basis, the
Utility's starting Energy Resource Recovery Account (ERRA)
revenue requirement of $2.035 billion.  The Utility will
record its procurement costs in the ERRA.  The CPUC will
examine the Utility's forecast of costs for 2003 and will
finalize the Utility's starting revenue requirement when it
reviews the Utility's ERRA application to be filed on
February 1, 2003.
The CPUC also clarified its October 2002 decision on the amount
of renewables the IOUs are to purchase each year under the new
Renewables Portfolio Standard, indicating that each year the IOUs
are to purchase enough renewables to generate a net 1 percent
increase over the 2001 baseline renewables amount.
The Utility intends to file its proposed long-term procurement
plan (covering the next 20 years) on April 1, 2003.  The CPUC
has stated that it plans to issue a final decision on the
IOUs' long-term procurement plans in November 2003.
B.  Motion to Extend Exclusivity
On December 20, 2002, the Utility filed a motion with the
Bankruptcy Court requesting the court to further extend the period
during only which the Utility (with the exception of the CPUC and
the Official Committee of Unsecured Creditors) can file a proposed
plan of reorganization for the Utility from December 31, 2002 to
April 30, 2003. A hearing on this motion has been set for January
22, 2003.
C.  2003 General Rate Case (GRC)
Also, on December 19, 2002, the CPUC approved the
Utility's motion for an order making the revenue requirements
determined in the Utility's Test Year 2003 GRC effective
January 1, 2003, even though the CPUC will not issue a final
decision on the 2003 GRC until after that date.
D.  Pacific Gas and Electric Company Bankruptcy - Monthly
Operating Report
On
December 30, 2002, the Utility filed its monthly operating report
for the month ended November 30, 2002 with the Bankruptcy
Court.  The Utility's monthly operating report includes an
unaudited income statement for the month and an unaudited balance
sheet dated as of the end of the month.  These unaudited
financial statements are attached as Exhibit 99 to this report.
Although not included in Exhibit 99, the monthly operating report
also includes a statement of receipts and disbursements, as well as
other information.  The preliminary financial statements were
prepared using certain assumptions and estimates that are subject
to revision.  Any adjustments for these estimates (based upon
changes in facts and circumstances, further analysis, and other
factors) will be reflected in the financial statements in the
period during which such adjustments are made.  These
adjustments could have a material impact on reported results in the
future.
Item 7.  Financial Statements, Pro Forma Financial
Information, and Exhibits
Exhibit 99 - Pacific Gas and Electric Company Income Statement
for the month ended November 30, 2002, and Balance Sheet dated
November 30, 2002.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their
behalf by the undersigned thereunto duly authorized.
PG&E CORPORATION
By:    LINDA Y.H. CHENG
LINDA Y.H. CHENG
Corporate
Secretary
PACIFIC GAS AND ELECTRIC COMPANY
By:    LINDA Y.H. CHENG
LINDA Y.H. CHENG
Corporate Secretary
Dated:  January 6, 2003