<html>
<head>
</head>
<body>
<div>
<table border="0" cellspacing="0" cellpadding="0" width="644">
<tr>
<td colspan="4" valign="top">
<p align="center">SECURITIES AND EXCHANGE COMMISSION</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><br />
 </p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center">Washington, D.C.&nbsp; 20549</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><br />
<br />
 </p>
</td>
</tr>

<tr>
<td colspan="4" valign="top"></td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center">FORM 8-K</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><br />
 </p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center">CURRENT REPORT</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><br />
 </p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center">Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><br />
 </p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center">Date of Report: October 15, 2002</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><br />
 </p>
</td>
</tr>

<tr>
<td colspan="4" valign="top"></td>
</tr>

<tr>
<td valign="top">
<p align="center"><br />
 Commission<br />
 File<br />
 Number</p>
</td>
<td valign="top">
<p align="center">Exact Name of<br />
 Registrant<br />
 as specified in<br />
 its charter</p>
</td>
<td valign="top">
<p align="center"><br />
 State or other<br />
 Jurisdiction of<br />
 Incorporation</p>
</td>
<td valign="top">
<p align="center"><br />
 IRS Employer<br />
 &nbsp; Identification<br />
 Number</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">_____________</p>
</td>
<td valign="top">
<p align="center">_____________</p>
</td>
<td valign="top">
<p align="center">_____________</p>
</td>
<td valign="top">
<p align="center">_____________</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">1-12609</p>

<p align="center">1-2348</p>
</td>
<td valign="top">
<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>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td colspan="2" valign="top">
<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>
</tr>

<tr>
<td colspan="4" valign="top"></td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center">(Address of principal executive offices) (Zip
Code)</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><br />
 </p>
</td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<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>
</tr>

<tr>
<td colspan="4" valign="top"></td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center">(Registrant's telephone number, including area
code)</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>
</table>

<p><br />
</p>

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

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

<h2>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pacific Gas
and Electric Company&rsquo;s (Utility) 2003 Cost of Capital
Proceeding</h2>

<p>On October 8, 2002, the administrative law judge in the
Utility&rsquo;s 2003 cost of capital proceeding issued a proposed
decision (PD).&nbsp; (The Utility is a subsidiary of PG&amp;E
Corporation.)&nbsp; The Utility sought a 2003 return on common
equity (ROE ) of 12.5% for electric distribution and generation
operations and a 2003 ROE of 12.25% for gas distribution
operations.&nbsp; The PD proposes an authorized ROE of 11.7% for
electric distribution and generation operations, and an ROE of
11.5% for gas distribution operations, as compared to the currently
authorized ROE of 11.22% for both electric and gas distribution
operations.&nbsp; The PD preliminarily estimates that the increased
ROE would result in an increase in revenue requirements of $35.1
million and $4.7 million for electric and gas distribution
operations, respectively.&nbsp;&nbsp;&nbsp;</p>

<p>&nbsp;</p>

<p>The PD proposes to maintain the Utility&rsquo;s currently
authorized capital structure (48% common equity, 5.8% preferred
stock, 46.2% long-term debt), and proposes to deny the proposal by
the CPUC&rsquo;s Office of Ratepayer Advocates to increase the
Utility's debt leverage.&nbsp;</p>

<p></p>

<p>The PD proposes to leave the proceeding open to address the
impact on the Utility&rsquo;s ROE and capital structure due to its
implementation of financing in connection with a bankruptcy plan of
reorganization.&nbsp; The Utility would be required to file an
advice letter within 30 days of completing any such financing to
request authority to true up its test year 2003 capital structure,
long-term debt and preferred stock cost, risks, and ROE.</p>

<p></p>

<p>The CPUC is expected to issue a final decision before the end of
2002.<br />
</p>

<h2>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pacific Gas
and Electric Company Bankruptcy</h2>

<p>As previously disclosed, the Utility&rsquo;s proposed plan of
reorganization (Plan) contemplates that a new entity, Electric
Generation, LLC (Gen) (which would become a subsidiary of PG&amp;E
Corporation after consummation of the Plan), will enter into a
long-term power sales agreement (PSA) with the reorganized
Utility.&nbsp; In late November 2001, Gen, which was formed to hold
the generation assets of the Utility pursuant to the Plan, filed an
application with the Federal Energy Regulatory Commission (FERC)
seeking approval of the PSA.&nbsp; Under the proposed PSA, the
reorganized Utility would purchase the full output from Gen&rsquo;s
power production assets at fixed rates (subject only to an
inflation adjustment) for 11 years from the Plan effective date and
approximately half the output for the 12th and final year of the
contract.&nbsp;&nbsp; The FERC must find that the proposed PSA is
just and reasonable before the agreement could become
effective.&nbsp;&nbsp; In order to demonstrate that the pricing,
terms and conditions of the proposed PSA are just and reasonable,
Gen submitted benchmark evidence of contemporaneous contracts
between non-affiliated parties for similar services in the
California electric market.&nbsp;</p>

<p>In June 2002, the FERC found that it lacked sufficient
evidentiary support to determine whether Gen&rsquo;s benchmark
analysis was appropriate.&nbsp; The FERC ordered that an expedited
evidentiary hearing be held on the narrow issues of (1) whether the
PSA is comparable to the selected benchmark contracts, and (2)
whether Gen used an appropriate set of contracts for the benchmark
analysis.&nbsp; Hearings on these narrow issues were held during
August 2002.</p>

<p>On October 10, 2002, a FERC administrative law judge (ALJ)
issued an initial decision finding that Gen successfully had
&ldquo;carried its burden&rdquo; with respect to the benchmark
analysis and had shown that the PSA was in fact comparable to the
selected benchmark contracts.&nbsp; The ALJ found no evidence in
the record of any exercise of market power on Gen&rsquo;s
behalf.&nbsp; In addition, the ALJ found that Gen&rsquo;s selection
of contracts used as a comparison group in the benchmark analysis
was appropriate and met all of the FERC&rsquo;s
criteria.&nbsp;&nbsp; The ALJ&rsquo;s findings provide a basis for
the FERC to approve the PSA as just and reasonable.&nbsp;&nbsp;</p>

<p></p>

<p>Pursuant to the FERC&rsquo;s procedural rules, parties may file
a &ldquo;brief on exceptions&rdquo; within 20 days from the date of
the initial decision.&nbsp; There is no specific time by which the
FERC is required to take final action on the initial decision.</p>

<br clear="all" />


<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 align="left">SIGNATURE</p>
</td>
</tr>
</table>

<p>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>

<table border="0" cellspacing="0" cellpadding="0">
<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;&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;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>

<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;LINDA Y.H. CHENG<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate Secretary</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;DINYAR B. MISTRY</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; <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;&nbsp; DINYAR B. MISTRY<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Vice President and
Controller</p>
</td>
</tr>
</table>

<p>Dated:&nbsp; October 15, 2002</p>
</div>
</body>
</html>
[{"type": "8-K", "sequence": "1", "filename": "final1015.htm", "description": "FROM 8-K", "secsgml_size_bytes": 14317}]
{"company-data": {"conformed-name": "PG&E CORP", "cik": "0001004980", "assigned-sic": "4931", "irs-number": "943234914", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-12609", "film-number": "02788845"}, "business-address": {"street1": "ONE MARKET SPEAR TOWER", "street2": "SUITE 2400", "city": "SAN FRANCISCO", "state": "CA", "zip": "94105", "phone": "4152677000"}, "mail-address": {"street1": "ONE MARKET SPEAR TOWER", "street2": "SUITE 2400", "city": "SAN FRANCISCO", "state": "CA", "zip": "94105"}, "former-company": {"former-conformed-name": "PG&E PARENT CO INC", "date-changed": "19951214"}}
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: October 15, 2002
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.        Pacific Gas
and Electric Company's (Utility) 2003 Cost of Capital
Proceeding
On October 8, 2002, the administrative law judge in the
Utility's 2003 cost of capital proceeding issued a proposed
decision (PD).  (The Utility is a subsidiary of PG&E
Corporation.)  The Utility sought a 2003 return on common
equity (ROE ) of 12.5% for electric distribution and generation
operations and a 2003 ROE of 12.25% for gas distribution
operations.  The PD proposes an authorized ROE of 11.7% for
electric distribution and generation operations, and an ROE of
11.5% for gas distribution operations, as compared to the currently
authorized ROE of 11.22% for both electric and gas distribution
operations.  The PD preliminarily estimates that the increased
ROE would result in an increase in revenue requirements of $35.1
million and $4.7 million for electric and gas distribution
operations, respectively.
The PD proposes to maintain the Utility's currently
authorized capital structure (48% common equity, 5.8% preferred
stock, 46.2% long-term debt), and proposes to deny the proposal by
the CPUC's Office of Ratepayer Advocates to increase the
Utility's debt leverage.
The PD proposes to leave the proceeding open to address the
impact on the Utility's ROE and capital structure due to its
implementation of financing in connection with a bankruptcy plan of
reorganization.  The Utility would be required to file an
advice letter within 30 days of completing any such financing to
request authority to true up its test year 2003 capital structure,
long-term debt and preferred stock cost, risks, and ROE.
The CPUC is expected to issue a final decision before the end of
2002.
B.        Pacific Gas
and Electric Company Bankruptcy
As previously disclosed, the Utility's proposed plan of
reorganization (Plan) contemplates that a new entity, Electric
Generation, LLC (Gen) (which would become a subsidiary of PG&E
Corporation after consummation of the Plan), will enter into a
long-term power sales agreement (PSA) with the reorganized
Utility.  In late November 2001, Gen, which was formed to hold
the generation assets of the Utility pursuant to the Plan, filed an
application with the Federal Energy Regulatory Commission (FERC)
seeking approval of the PSA.  Under the proposed PSA, the
reorganized Utility would purchase the full output from Gen's
power production assets at fixed rates (subject only to an
inflation adjustment) for 11 years from the Plan effective date and
approximately half the output for the 12th and final year of the
contract.   The FERC must find that the proposed PSA is
just and reasonable before the agreement could become
effective.   In order to demonstrate that the pricing,
terms and conditions of the proposed PSA are just and reasonable,
Gen submitted benchmark evidence of contemporaneous contracts
between non-affiliated parties for similar services in the
California electric market.
In June 2002, the FERC found that it lacked sufficient
evidentiary support to determine whether Gen's benchmark
analysis was appropriate.  The FERC ordered that an expedited
evidentiary hearing be held on the narrow issues of (1) whether the
PSA is comparable to the selected benchmark contracts, and (2)
whether Gen used an appropriate set of contracts for the benchmark
analysis.  Hearings on these narrow issues were held during
August 2002.
On October 10, 2002, a FERC administrative law judge (ALJ)
issued an initial decision finding that Gen successfully had
"carried its burden" with respect to the benchmark
analysis and had shown that the PSA was in fact comparable to the
selected benchmark contracts.  The ALJ found no evidence in
the record of any exercise of market power on Gen's
behalf.  In addition, the ALJ found that Gen's selection
of contracts used as a comparison group in the benchmark analysis
was appropriate and met all of the FERC's
criteria.   The ALJ's findings provide a basis for
the FERC to approve the PSA as just and reasonable.
Pursuant to the FERC's procedural rules, parties may file
a "brief on exceptions" within 20 days from the date of
the initial decision.  There is no specific time by which the
FERC is required to take final action on the initial decision.
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:  DINYAR B. MISTRY
DINYAR B. MISTRY
Vice President and
Controller
Dated:  October 15, 2002