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<title>10-24-03 Form 8-K</title>
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<p align="center"><font size="3" face="Times New Roman">SECURITIES
AND EXCHANGE COMMISSION</font></p>
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<p align="center"><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
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<p align="center"><font size="3" face="Times New Roman">Washington,
D.C.&nbsp; 20549</font></p>
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<p align="center"><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
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<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
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<p align="center"><font size="3" face="Times New Roman">FORM
8-K</font></p>
</td>
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<p align="center"><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
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<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman">CURRENT
REPORT</font></p>
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<p align="center"><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
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<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman">Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of
1934</font></p>
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<p align="center"><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
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<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman">Date of
Report: October 24, 2003</font></p>
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<p align="center"><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
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<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
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<p align="center"><font size="3" face="Times New Roman"><br />
 Commission<br />
 File<br />
 Number</font></p>
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<td valign="top">
<p align="center"><font size="3" face="Times New Roman">Exact Name
of<br />
 Registrant<br />
 as specified in<br />
 its charter</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face="Times New Roman"><br />
 State or other<br />
 Jurisdiction of<br />
 Incorporation</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face="Times New Roman"><br />
 IRS Employer<br />
 &nbsp; Identification<br />
 Number</font></p>
</td>
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<p align="center"><font size="3" face=
"Times New Roman">_____________</font></p>
</td>
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<p align="center"><font size="3" face=
"Times New Roman">_____________</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">_____________</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">_____________</font></p>
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<p align="center"><font size="3" face=
"Times New Roman">1-12609</font></p>

<p align="center"><font size="3" face=
"Times New Roman">1-2348</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face="Times New Roman">PG&amp;E
Corporation</font></p>

<p align="center"><font size="3" face="Times New Roman">Pacific Gas
and<br />
 Electric Company</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">California</font></p>

<p align="center"><font size="3" face=
"Times New Roman">California</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">94-3234914</font></p>

<p align="center"><font size="3" face=
"Times New Roman">94-0742640</font></p>
</td>
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<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
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<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
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<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
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<td colspan="2" valign="top">
<p align="center"><font size="3" face="Times New Roman">Pacific Gas
and Electric Company<br />
 77 Beale Street, P. O. Box 770000<br />
 San Francisco, California&nbsp;&nbsp;94177</font></p>
</td>
<td colspan="2" valign="top">
<p align="center"><font size="3" face="Times New Roman">PG&amp;E
Corporation<br />
 One Market, Spear Tower, Suite 2400<br />
 San Francisco, California&nbsp;&nbsp;94105</font></p>
</td>
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<td colspan="4" valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
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<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman">(Address of
principal executive offices) (Zip Code)</font></p>
</td>
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<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
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<td colspan="2" valign="top">
<p align="center"><font size="3" face="Times New Roman">Pacific Gas
and Electric Company<br />
 (415) 973-7000</font></p>
</td>
<td colspan="2" valign="top">
<p align="center"><font size="3" face="Times New Roman">PG&amp;E
Corporation<br />
 (415) 267-7000</font></p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
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<td colspan="4" valign="top">
<p align="center"><font size="3" face=
"Times New Roman">(Registrant's telephone number, including area
code)</font></p>
</td>
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<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
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<p align="center"><font size="3" face=
"Times New Roman">Inapplicable</font></p>

<p align="center"><font size="3" face="Times New Roman">(Former
Name or Former Address, if Changed Since Last Report)</font></p>

<p><font size="3" face="Times New Roman">Item
5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Events</font></p>

<p><font size="3" face="Times New Roman">A.&nbsp; Credit Rating
Change</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
October 23, 2003, Moody's Investors Service (Moody's) upgraded the
credit ratings of Pacific Gas and Electric Company (Utility) and
its senior unsecured debt from Caa2 to B2, concluding a review for
possible upgrade that was initiated on June 23, 2003.&nbsp; Moody's
rating outlook is positive.&nbsp; In particular, Moody's upgraded
the Utility's:</font></p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p><b><font size="3" face=
"Times New Roman">-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></b></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">First mortgage bonds and
secured pollution control bonds to Ba3 from B3;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><b><font size="3" face="Times New Roman">-</font></b></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Issuer rating, senior
unsecured notes, unsecured debentures, and unsecured, unenhanced
pollution control bonds to B2 from Caa2;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><b><font size="3" face="Times New Roman">-</font></b></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Subordinated debt to B3
from Caa3; and</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><b><font size="3" face="Times New Roman">-</font></b></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Preferred stock to Caa1
from Ca;</font></p>
</td>
</tr>
</table>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Moody's
noted that its rating action reflects what it viewed as significant
progress toward resolving regulatory issues with the California
Public Utilities Commission (CPUC), apparent progress toward
agreement on a plan of reorganization (POR) in the Utility&rsquo;s
Chapter 11 proceeding pending in the U.S. Bankruptcy Court for the
Northern District of California (Bankruptcy Court), and Moody's
belief that the Utility's emergence from Chapter 11 is likely to
occur sometime during 2004.&nbsp; In taking its action, Moody's
also considered that the Utility, while operating in Chapter 11
since April 2001, is current on interest payments on all of its
debt obligations, and is expected to remain current through the
remainder of the Chapter 11 proceeding.&nbsp; Moody's noted that,
with the approval of the Bankruptcy Court, the Utility has met all
of its payment obligations under its first mortgage bond indenture
on a timely basis, and that it expects the Utility to meet the next
principal payment due in March 2004.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Moody's
also stated that its positive rating outlook reflects the proposed
Chapter 11 settlement agreement among the Utility, PG&amp;E
Corporation, and the staff of the CPUC.&nbsp;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Finally,
Moody's stated that the Utility&rsquo;s current ratings are
significantly below investment grade and reflect, among other
things, the uncertain financial profile of the Utility at the time
of its emergence from Chapter 11 and the fact that various legal
and regulatory uncertainties remain concerning the Utility's exit
from Chapter 11, including the possibility that the regulatory plan
contemplated under the current POR might not be approved by the
CPUC and the Bankruptcy Court, thereby causing the Utility to
emerge from Chapter 11 under a modified POR, or causing the Utility
to remain in Chapter 11 for an indeterminate time period while a
new POR is formulated.</font></p>

<p><font size="3" face="Times New Roman">B.&nbsp; Department of
Water Resources&rsquo; (DWR) 2001-2002 Revenue Requirement True-Up
Proceeding</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As previously disclosed, the CPUC&rsquo;s allocation of the
DWR&rsquo;s revenue requirement for the 2001-2002 period among the
three California investor-owned utilities (IOUs) is subject to
true-up adjustments based on the actual amount of power purchased
by the DWR for the respective IOU&rsquo;s customers during the
2001-2002 period.&nbsp; The DWR pays for its costs of purchasing
electricity from a revenue requirement collected from the
IOUs&rsquo; electricity customers through a power charge and a bond
charge.&nbsp; The CPUC allocated approximately 48.3% of the adopted
DWR power charge revenue requirement for the 2001-2002 period, or
about $4.4 billion, to the Utility.&nbsp;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In testimony submitted to the CPUC on October 15 and 22, 2003, the
Utility estimated that it over-remitted $107 million in power
charges to the DWR for the 2001- 2002 period based on the
allocation methodology applied by the CPUC in determining the
allocation of the 2001-2002 DWR power charge revenue
requirement.&nbsp; The Utility also proposed that the CPUC use a
different allocation methodology under which the Utility estimates
it over-remitted $211 million.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Testimony submitted by Southern California Edison (SCE) and other
parties includes varying estimates of the Utility&rsquo;s true-up
adjustment depending on the allocation methodology proposed.&nbsp;
SCE calculated that the Utility over-remitted approximately $101
million in power charges to the DWR based on the allocation
methodology applied by the CPUC in determining the allocation of
the 2001-2002 DWR power charge revenue requirement.&nbsp; However,
SCE also has proposed that the CPUC apply the allocation
methodology used to allocate the DWR bond charge revenue
requirement to allocate the bond proceeds among the customers of
the IOUs, and under this methodology, has estimated that the
Utility has under-remitted $453 million in DWR revenue
requirements.&nbsp; The Utility&rsquo;s testimony noted that the
CPUC had already rejected this proposal in its decision allocating
the DWR&rsquo;s 2003 bond charge revenue requirements.</font></p>

<p><font size="3" face="Times New Roman">The Utility has proposed
to include any true-up adjustments to the DWR&rsquo;s 2001-2002
revenue requirement in each IOU&rsquo;s allocation of the 2004 DWR
revenue requirement to be collected through the 2004 DWR remittance
rate.&nbsp; SCE supports this proposal, but San Diego Gas &amp;
Electric Company has proposed that any under-remittance that an IOU
is determined to owe should be paid by the IOU
immediately.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CPUC
hearings are scheduled to begin on October 27, 2003, and the CPUC
is expected to issue a decision in January 2004.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PG&amp;E Corporation and the Utility expect that any amounts
determined by the CPUC to have been under-remitted or over-remitted
to the DWR by the Utility for the 2001-2002 period will be included
in the DWR&rsquo;s revenue requirements in 2004 and subsequent
periods, and collected or refunded on a going-forward basis from
the Utility&rsquo;s customers.&nbsp; However, PG&amp;E Corporation
and the Utility are unable to predict the outcome of this
matter.&nbsp; If the CPUC retroactively determines that the Utility
has under-remitted a material amount to the DWR and orders the
Utility to make a one-time true-up payment from cash on hand rather
than collect the under-remitted amount from customers on a
going-forward basis, the Utility&rsquo;s financial condition and
results of operation would be materially adversely
affected.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="656">
<tr>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">SIGNATURE</font></p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">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.</font></p>
</td>
</tr>

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

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="656">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td colspan="2" valign="top">
<p><font size="3" face="Times New Roman">PG&amp;E
CORPORATION</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">By:&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman"><br />
 CHRISTOPHER P. JOHNS
______________________________________</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">CHRISTOPHER P. JOHNS<br />
 Senior Vice President and Controller</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td colspan="2" valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td colspan="2" valign="top">
<p><font size="3" face="Times New Roman">PACIFIC GAS AND ELECTRIC
COMPANY</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">By:&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">LINDA Y.H. CHENG<br />
 _________________________________________</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">LINDA Y.H. CHENG<br />
 Corporate Secretary</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="580">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Dated:&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;October
24, 2003</font></p>
</td>
</tr>

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

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

<p><font size="3" face="Times New Roman"></font></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": "03956477"}, "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"}}
10-24-03 Form 8-K
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 24, 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)
Inapplicable
(Former
Name or Former Address, if Changed Since Last Report)
Item
5.     Other Events
A.  Credit Rating
Change
On
October 23, 2003, Moody's Investors Service (Moody's) upgraded the
credit ratings of Pacific Gas and Electric Company (Utility) and
its senior unsecured debt from Caa2 to B2, concluding a review for
possible upgrade that was initiated on June 23, 2003.  Moody's
rating outlook is positive.  In particular, Moody's upgraded
the Utility's:
-
First mortgage bonds and
secured pollution control bonds to Ba3 from B3;
-
Issuer rating, senior
unsecured notes, unsecured debentures, and unsecured, unenhanced
pollution control bonds to B2 from Caa2;
-
Subordinated debt to B3
from Caa3; and
-
Preferred stock to Caa1
from Ca;
Moody's
noted that its rating action reflects what it viewed as significant
progress toward resolving regulatory issues with the California
Public Utilities Commission (CPUC), apparent progress toward
agreement on a plan of reorganization (POR) in the Utility's
Chapter 11 proceeding pending in the U.S. Bankruptcy Court for the
Northern District of California (Bankruptcy Court), and Moody's
belief that the Utility's emergence from Chapter 11 is likely to
occur sometime during 2004.  In taking its action, Moody's
also considered that the Utility, while operating in Chapter 11
since April 2001, is current on interest payments on all of its
debt obligations, and is expected to remain current through the
remainder of the Chapter 11 proceeding.  Moody's noted that,
with the approval of the Bankruptcy Court, the Utility has met all
of its payment obligations under its first mortgage bond indenture
on a timely basis, and that it expects the Utility to meet the next
principal payment due in March 2004.
Moody's
also stated that its positive rating outlook reflects the proposed
Chapter 11 settlement agreement among the Utility, PG&E
Corporation, and the staff of the CPUC.
Finally,
Moody's stated that the Utility's current ratings are
significantly below investment grade and reflect, among other
things, the uncertain financial profile of the Utility at the time
of its emergence from Chapter 11 and the fact that various legal
and regulatory uncertainties remain concerning the Utility's exit
from Chapter 11, including the possibility that the regulatory plan
contemplated under the current POR might not be approved by the
CPUC and the Bankruptcy Court, thereby causing the Utility to
emerge from Chapter 11 under a modified POR, or causing the Utility
to remain in Chapter 11 for an indeterminate time period while a
new POR is formulated.
B.  Department of
Water Resources' (DWR) 2001-2002 Revenue Requirement True-Up
Proceeding
As previously disclosed, the CPUC's allocation of the
DWR's revenue requirement for the 2001-2002 period among the
three California investor-owned utilities (IOUs) is subject to
true-up adjustments based on the actual amount of power purchased
by the DWR for the respective IOU's customers during the
2001-2002 period.  The DWR pays for its costs of purchasing
electricity from a revenue requirement collected from the
IOUs' electricity customers through a power charge and a bond
charge.  The CPUC allocated approximately 48.3% of the adopted
DWR power charge revenue requirement for the 2001-2002 period, or
about $4.4 billion, to the Utility.
In testimony submitted to the CPUC on October 15 and 22, 2003, the
Utility estimated that it over-remitted $107 million in power
charges to the DWR for the 2001- 2002 period based on the
allocation methodology applied by the CPUC in determining the
allocation of the 2001-2002 DWR power charge revenue
requirement.  The Utility also proposed that the CPUC use a
different allocation methodology under which the Utility estimates
it over-remitted $211 million.
Testimony submitted by Southern California Edison (SCE) and other
parties includes varying estimates of the Utility's true-up
adjustment depending on the allocation methodology proposed. 
SCE calculated that the Utility over-remitted approximately $101
million in power charges to the DWR based on the allocation
methodology applied by the CPUC in determining the allocation of
the 2001-2002 DWR power charge revenue requirement.  However,
SCE also has proposed that the CPUC apply the allocation
methodology used to allocate the DWR bond charge revenue
requirement to allocate the bond proceeds among the customers of
the IOUs, and under this methodology, has estimated that the
Utility has under-remitted $453 million in DWR revenue
requirements.  The Utility's testimony noted that the
CPUC had already rejected this proposal in its decision allocating
the DWR's 2003 bond charge revenue requirements.
The Utility has proposed
to include any true-up adjustments to the DWR's 2001-2002
revenue requirement in each IOU's allocation of the 2004 DWR
revenue requirement to be collected through the 2004 DWR remittance
rate.  SCE supports this proposal, but San Diego Gas &
Electric Company has proposed that any under-remittance that an IOU
is determined to owe should be paid by the IOU
immediately.
CPUC
hearings are scheduled to begin on October 27, 2003, and the CPUC
is expected to issue a decision in January 2004.
PG&E Corporation and the Utility expect that any amounts
determined by the CPUC to have been under-remitted or over-remitted
to the DWR by the Utility for the 2001-2002 period will be included
in the DWR's revenue requirements in 2004 and subsequent
periods, and collected or refunded on a going-forward basis from
the Utility's customers.  However, PG&E Corporation
and the Utility are unable to predict the outcome of this
matter.  If the CPUC retroactively determines that the Utility
has under-remitted a material amount to the DWR and orders the
Utility to make a one-time true-up payment from cash on hand rather
than collect the under-remitted amount from customers on a
going-forward basis, the Utility's financial condition and
results of operation would be materially adversely
affected.
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:
CHRISTOPHER P. JOHNS
______________________________________
CHRISTOPHER P. JOHNS
Senior Vice President and Controller
PACIFIC GAS AND ELECTRIC
COMPANY
By:
LINDA Y.H. CHENG
_________________________________________
LINDA Y.H. CHENG
Corporate Secretary
Dated:
October
24, 2003