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:  May 22, 1997



               Exact Name of
Commission     Registrant        State or other    IRS Employer
File           as specified      Jurisdiction of   Identification
Number         in its charter    Incorporation     Number
-----------    --------------    ---------------   --------------

1-12609        PG&E Corporation  California        94-3234914

1-2348         Pacific Gas and   California        94-0742640
               Electric Company







77 Beale Street, P.O. Box 770000, San Francisco, California 94177
       (Address of principal executive offices) (Zip Code)

Registrants' telephone number, including area code:(415) 973-7000



<PAGE>

Item 5.  Other Events

A.  Electric Industry Restructuring

     1.  Diablo Canyon Ratemaking

As previously disclosed, in 1996, Pacific Gas and Electric
Company (PG&E) filed with the California Public Utilities
Commission (CPUC) a proposal for pricing electric generation from
PG&E's Diablo Canyon Nuclear Power Plant (Diablo Canyon) at
market prices and completing recovery of the investment in Diablo
Canyon by the end of 2001.  Under its proposal, PG&E would
replace the existing Diablo Canyon performance based ratemaking
mechanism with: (1) a sunk cost revenue requirement to recover
net investment in plant, including a return on this net
investment, and (2) a performance-based Incremental Cost
Incentive Price (ICIP) mechanism to recover the facility's
variable and other operating costs and capital addition costs.
As proposed by PG&E, the sunk cost revenue requirement would be
set to accelerate recovery of Diablo Canyon sunk costs from a
twenty-year period ending in 2016 to a five-year period beginning
in 1997 and ending in 2001.  The related return on common equity
associated with Diablo Canyon sunk costs would be reduced to 90
percent of PG&E's long-term cost of debt. PG&E's proposed ICIP
mechanism would establish a rate per kilowatt-hour (kWh)
generated by the facility.  This rate would be based upon a fixed
forecast of on-going costs, capital additions, and capacity
factors for the period 1997 through 2001.

On May 21, 1997, the CPUC voted (by a vote of three commissioners
with two commissioners dissenting) to issue a decision on PG&E's
proposal with an effective date of January 1, 1997.  Based on
information available at the May 21, 1997 CPUC meeting, it
appears that, with significant exceptions, the CPUC decision
generally adopts the overall ratemaking structure proposed by
PG&E:

1.   PG&E's sunk costs would be recovered through a sunk cost
revenue requirement, at a reduced return on common equity equal
to 90 percent of PG&E's embedded cost of debt, or 6.77% in
1996; and

2.   ongoing operating costs and capital additions would be
recovered through the ICIP mechanism.

However, as described below, the CPUC decision substantially
reduces the level of PG&E's proposed ICIP pricing, imposes a
disallowance of about $70 million, and excludes certain inventory
items from the sunk cost revenue requirement.  In addition, the
decision fails to clarify Diablo Canyon's "must take" status
during the transition period under California electric industry
restructuring.

<PAGE>

ICIP Pricing:
-------------
The CPUC decision adopts a fixed forecast of ICIP for 1997-2001,
as shown below.  The prices are based on an assumed capacity
factor of 83.6 percent and an escalation factor of 1.5 percent.

         Incremental Cost Incentive Prices and Estimated
                    Total Revenue Requirement
<TABLE>
<CAPTION>
                      1997    1998     1999    2000     2001
-----------------------------------------------------------------
<S>                  <C>     <C>      <C>     <C>      <C>
ICIP (cents per kWh)  3.26    3.31     3.37     3.43    3.49

Estimated Total Revenue Requirement
($ in millions)
Sunk Cost Recovery  $1,385   $1,322  $1,259   $1,197  $1,135
ICIP Revenues          515      523     532      542     552
-----------------------------------------------------------------

Total Revenue
 Requirement        $1,900   $1,845  $1,791   $1,739  $1,687
</TABLE>

Sunk Cost Recovery:
-------------------
The CPUC decision excludes several items totaling $160 million
from the sunk cost revenue requirement, including out-of-core
fuel inventory, materials and supplies inventory, and prepaid
insurance expenses.  The CPUC decision requires that the costs of
materials, supplies and nuclear fuel be recovered through the
ICIP mechanism as these items are used.

In addition, the CPUC decision finds that PG&E's proposed
modified Diablo Canyon ratemaking is a form of traditional
ratemaking subject to a state statute requiring a prudence review
of the plant's construction costs and requiring a disallowance of
any such costs exceeding $50 million which result from an
unreasonable construction error or omission.  The decision then
finds that PG&E admitted to an error in the design and
construction of the plant of $100 million and accordingly adopts
a prudence disallowance of approximately $70 million for the
undepreciated portion of such costs attributable to the error.

In adopting the CPUC final decision, the CPUC rejected an
alternate proposed decision supported by two commissioners which
represented a compromise between PG&E's proposal and the adopted
decision.  Because the final CPUC decision is significantly
inconsistent from PG&E's proposal and prior CPUC decisions on
electric industry restructuring, PG&E intends to seek rehearing
before the CPUC.

<PAGE>

B.  Changes in Management

On May 21, 1997, the Board of Directors of PG&E Corporation
appointed Robert D. Glynn, currently president and chief
operating officer, as chief executive officer of PG&E Corporation
effective June 1, 1997, succeeding Stanley T. Skinner.  Mr.
Skinner will continue as chairman of the board of PG&E
Corporation and its largest subsidiary, PG&E, until December 31,
1997, at which time he will retire.  Upon Mr. Skinner's
retirement, Mr. Glynn will become chairman, president and chief
executive officer of PG&E Corporation, and Chairman of PG&E.  In
addition, Gordon R. Smith, currently chief financial officer of
PG&E Corporation and senior vice president and chief financial
officer of PG&E, will relinquish those positions and become
president and chief executive officer of PG&E, and a member of
PG&E's board of directors, effective June 1, 1997.

<PAGE>
                             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
                             and
                         PACIFIC GAS AND ELECTRIC COMPANY




                              BRUCE R. WORTHINGTON
                         By ________________________________
                              Bruce R. Worthington
                               General Counsel
                              (PG&E Corporation)
                               Senior Vice President and
                               General Counsel
                              (Pacific Gas and Electric Company)

Dated: May 22, 1997
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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:  May 22, 1997

               Exact Name of
Commission     Registrant        State or other    IRS Employer
File           as specified      Jurisdiction of   Identification
Number         in its charter    Incorporation     Number
-----------    --------------    ---------------   --------------

1-12609        PG&E Corporation  California        94-3234914

1-2348         Pacific Gas and   California        94-0742640
               Electric Company

77 Beale Street, P.O. Box 770000, San Francisco, California 94177
       (Address of principal executive offices) (Zip Code)

Registrants' telephone number, including area code:(415) 973-7000
Item 5.  Other Events

A.  Electric Industry Restructuring

     1.  Diablo Canyon Ratemaking

As previously disclosed, in 1996, Pacific Gas and Electric
Company (PG&E) filed with the California Public Utilities
Commission (CPUC) a proposal for pricing electric generation from
PG&E's Diablo Canyon Nuclear Power Plant (Diablo Canyon) at
market prices and completing recovery of the investment in Diablo
Canyon by the end of 2001.  Under its proposal, PG&E would
replace the existing Diablo Canyon performance based ratemaking
mechanism with: (1) a sunk cost revenue requirement to recover
net investment in plant, including a return on this net
investment, and (2) a performance-based Incremental Cost
Incentive Price (ICIP) mechanism to recover the facility's
variable and other operating costs and capital addition costs.
As proposed by PG&E, the sunk cost revenue requirement would be
set to accelerate recovery of Diablo Canyon sunk costs from a
twenty-year period ending in 2016 to a five-year period beginning
in 1997 and ending in 2001.  The related return on common equity
associated with Diablo Canyon sunk costs would be reduced to 90
percent of PG&E's long-term cost of debt. PG&E's proposed ICIP
mechanism would establish a rate per kilowatt-hour (kWh)
generated by the facility.  This rate would be based upon a fixed
forecast of on-going costs, capital additions, and capacity
factors for the period 1997 through 2001.

On May 21, 1997, the CPUC voted (by a vote of three commissioners
with two commissioners dissenting) to issue a decision on PG&E's
proposal with an effective date of January 1, 1997.  Based on
information available at the May 21, 1997 CPUC meeting, it
appears that, with significant exceptions, the CPUC decision
generally adopts the overall ratemaking structure proposed by
PG&E:

1.   PG&E's sunk costs would be recovered through a sunk cost
revenue requirement, at a reduced return on common equity equal
to 90 percent of PG&E's embedded cost of debt, or 6.77% in
1996; and

2.   ongoing operating costs and capital additions would be
recovered through the ICIP mechanism.

However, as described below, the CPUC decision substantially
reduces the level of PG&E's proposed ICIP pricing, imposes a
disallowance of about $70 million, and excludes certain inventory
items from the sunk cost revenue requirement.  In addition, the
decision fails to clarify Diablo Canyon's "must take" status
during the transition period under California electric industry
restructuring.
ICIP Pricing:
-------------
The CPUC decision adopts a fixed forecast of ICIP for 1997-2001,
as shown below.  The prices are based on an assumed capacity
factor of 83.6 percent and an escalation factor of 1.5 percent.

         Incremental Cost Incentive Prices and Estimated
                    Total Revenue Requirement
1997    1998     1999    2000     2001
-----------------------------------------------------------------
ICIP (cents per kWh)  3.26    3.31     3.37     3.43    3.49

Estimated Total Revenue Requirement
($ in millions)
Sunk Cost Recovery  $1,385   $1,322  $1,259   $1,197  $1,135
ICIP Revenues          515      523     532      542     552
-----------------------------------------------------------------

Total Revenue
 Requirement        $1,900   $1,845  $1,791   $1,739  $1,687
Sunk Cost Recovery:
-------------------
The CPUC decision excludes several items totaling $160 million
from the sunk cost revenue requirement, including out-of-core
fuel inventory, materials and supplies inventory, and prepaid
insurance expenses.  The CPUC decision requires that the costs of
materials, supplies and nuclear fuel be recovered through the
ICIP mechanism as these items are used.

In addition, the CPUC decision finds that PG&E's proposed
modified Diablo Canyon ratemaking is a form of traditional
ratemaking subject to a state statute requiring a prudence review
of the plant's construction costs and requiring a disallowance of
any such costs exceeding $50 million which result from an
unreasonable construction error or omission.  The decision then
finds that PG&E admitted to an error in the design and
construction of the plant of $100 million and accordingly adopts
a prudence disallowance of approximately $70 million for the
undepreciated portion of such costs attributable to the error.

In adopting the CPUC final decision, the CPUC rejected an
alternate proposed decision supported by two commissioners which
represented a compromise between PG&E's proposal and the adopted
decision.  Because the final CPUC decision is significantly
inconsistent from PG&E's proposal and prior CPUC decisions on
electric industry restructuring, PG&E intends to seek rehearing
before the CPUC.
B.  Changes in Management

On May 21, 1997, the Board of Directors of PG&E Corporation
appointed Robert D. Glynn, currently president and chief
operating officer, as chief executive officer of PG&E Corporation
effective June 1, 1997, succeeding Stanley T. Skinner.  Mr.
Skinner will continue as chairman of the board of PG&E
Corporation and its largest subsidiary, PG&E, until December 31,
1997, at which time he will retire.  Upon Mr. Skinner's
retirement, Mr. Glynn will become chairman, president and chief
executive officer of PG&E Corporation, and Chairman of PG&E.  In
addition, Gordon R. Smith, currently chief financial officer of
PG&E Corporation and senior vice president and chief financial
officer of PG&E, will relinquish those positions and become
president and chief executive officer of PG&E, and a member of
PG&E's board of directors, effective June 1, 1997.
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
                             and
                         PACIFIC GAS AND ELECTRIC COMPANY

                              BRUCE R. WORTHINGTON
                         By ________________________________
                              Bruce R. Worthington
                               General Counsel
                              (PG&E Corporation)
                               Senior Vice President and
                               General Counsel
                              (Pacific Gas and Electric Company)

Dated: May 22, 1997