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<title>SECURITIES AND EXCHANGE COMMISSION</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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<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman">FORM
8-K</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">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>
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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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<p align="center"><font size="3" face="Times New Roman">Date of
Report: July 8, 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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<td colspan="4" valign="top">
<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"><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>
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<td valign="top">
<p align="center"><font size="3" face="Times New Roman"><br />
 State or other<br />
 Jurisdiction of<br />
 Incorporation</font></p>
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<td valign="top">
<p align="center"><font size="3" face="Times New Roman"><br />
 IRS Employer<br />
 &nbsp; Identification<br />
 Number</font></p>
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<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">_____________</font></p>
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<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">_____________</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>
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<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>
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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>
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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>
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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>
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<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>
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<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>
</tr>
</table>

<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><u><font size="3" face="Times New Roman">Proposed Settlement
Agreement</font></u></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
previously disclosed, PG&amp;E Corporation and its subsidiary,
Pacific Gas and Electric Company (Utility) and the staff of the
California Public Utilities Commission (CPUC) entered into a
proposed settlement agreement that contemplates a new plan of
reorganization (Settlement Plan) to supercede the competing plans
of reorganization submitted in the Utility&rsquo;s proceeding under
Chapter 11 of the U.S. Bankruptcy Code pending in the U.S.
Bankruptcy Court for the Northern District of California
(Bankruptcy Court).&nbsp; On June 27, 2003, PG&amp;E Corporation,
the Utility, and the Official Committee of Unsecured Creditors, as
co-proponents, filed the Settlement Plan with the Bankruptcy
Court.&nbsp; Among other conditions to effectiveness of the
Settlement Plan, the CPUC must approve the proposed settlement
agreement on or before December 31, 2003, the Bankruptcy Court must
approve the disclosure statement which will be used to solicit
approval of the Settlement Plan from creditors entitled to vote on
the Settlement Plan, and the Bankruptcy Court must confirm the
Settlement Plan.&nbsp;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
CPUC has set a prehearing conference for July 9, 2003 regarding the
proposed settlement agreement. As requested by the CPUC, on July 1,
2003, the Utility submitted a proposed schedule of procedures it
believes are needed under the California Public Utilities Code and
CPUC policies and practices to implement the proposed settlement
agreement and Settlement Plan.&nbsp; The Utility&rsquo;s proposed
schedule calls for evidentiary hearings to be completed by
September 12, 2003, for a proposed CPUC decision to be issued by
November 18, 2003, and for a final CPUC decision to be issued by
December 18, 2003.&nbsp;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Further,
the Bankruptcy Court has set a hearing for July 30, 2003 to
consider whether to approve the proposed disclosure statement
describing the Settlement Plan.&nbsp;</font></p>

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

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
June 23, 2003, Moody&rsquo;s Investors Service announced that it
placed the ratings of&nbsp;the Utility, including its senior
unsecured debt at Caa2, under review for possible upgrade following
the announcement of the&nbsp;proposed settlement
agreement.&nbsp;&nbsp;&nbsp; On July 1, 2003, Fitch Ratings
announced that it had raised the ratings of the Utility&rsquo;s
senior secured debt and preferred stock to 'BB-' and 'DDD',
respectively, from 'DDD' and 'D'.&nbsp; The Utility&rsquo;s secured
debt and preferred stock remains on Rating Watch Positive by Fitch.
Fitch stated that the ratings reflect the fact that the Utility is
currently paying all interest payments on its outstanding debt
securities and Fitch's view that the Utility is likely to continue
to do so through the remainder of the bankruptcy
process.</font></p>

<p><font size="3" face="Times New Roman">Item 9.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Regulation FD Disclosure</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
information included in this Current Report on Form 8-K, including
portions of the Utility&rsquo;s monthly operating report for the
month ended May 31, 2003 filed with the Bankruptcy Court attached
hereto as Exhibit 1 and the financial projections relating to the
Settlement Plan attached hereto as Exhibit 2, are being furnished,
not filed, pursuant to Item 9 of Form 8-K.</font></p>

<p><u><font size="3" face="Times New Roman">Monthly Operating
Report</font></u></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
June 30, 2003, the Utility filed its monthly operating report for
the month ended May 31, 2003 with the Bankruptcy Court, as required
by Section 704(8) of the U.S. Bankruptcy Code and Rule 2015 of the
Federal Rules of Bankruptcy Procedure and prepared in accordance
with U.S. Trustee Guidelines Region 17.&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
an exhibit to this report.&nbsp; Although not included in the
exhibit attached to this report, the monthly operating report filed
with the Bankruptcy Court 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.</font></p>

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

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
July 8, 2003, PG&amp;E Corporation and the Utility filed financial
projections relating to the Settlement Plan with the Bankruptcy
Court that are attached to this report as Exhibit 2.</font></p>

<p><u><font size="3" face="Times New Roman">Cautionary Statement
Regarding Forward Looking Statements</font></u></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
projected financial information attached hereto as Exhibit 2 and
the various assumptions underlying such projections constitute
forward-looking statements which are necessarily subject to various
risks and uncertainties that could cause actual results to differ
materially from those contemplated by the forward looking
statements and financial projections.&nbsp; Some of the factors
that could cause results to differ materially include:</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="629">
<tr>
<td valign="top">
<p align="center"><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;-</font></b></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">whether the proposed
settlement agreement with the CPUC, and the rates, tariffs and
agreements that it contemplates, are approved by the CPUC after
public hearings, the timing of such approval, and whether any such
approvals are appealed and, if appealed, the timing and resolution
of these appeals;</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;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;-</font></b></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">the outcome and the timing
of the Bankruptcy Court&rsquo;s proceeding to confirm the
Settlement Plan, whether the confirmation order is appealed and, if
appealed, the timing and resolution of these appeals,</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;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;-</font></b></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">the effect of judicial
decisions on the CPUC's authority to enter into and perform its
obligations under the proposed settlement agreement, including the
California Supreme Court's consideration of the legality of
recovery of under-collected costs by another California utility,
Southern California Edison Company, under a settlement and
stipulated federal court judgment with the CPUC;</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;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;-</font></b></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">prevailing governmental
policies and legislative or regulatory actions generally, including
those of the CPUC and the Federal Energy Regulatory Commission, or
the FERC, industry and rate structure, recovery of investments and
costs, acquisitions and disposal of assets and facilities,
treatment of affiliate contracts and relationships and operation
and construction of facilities;</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;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;-</font></b></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">whether the required
credit ratings to implement the Settlement Plan are
obtained;</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;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;-</font></b></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">the impact of future
ratemaking actions of the CPUC;</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;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;-</font></b></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">future equity or debt
market conditions, future interest rates, future credit ratings,
and other factors that may affect the ability to implement the
Settlement Plan or affect the terms, amount, and value of the debt
securities proposed to be issued under the Settlement
Plan;</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;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;-</font></b></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">unanticipated changes in
operating expenses and capital expenditures;</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;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;-</font></b></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">the level and volatility
of wholesale electricity and natural gas prices and the
Utility&rsquo;s ability to manage and respond to this volatility
successfully;</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;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;-</font></b></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">increased competition as a
result of municipalization of the Utility's distribution assets,
self-generation by its customers and other forms of competition
that may result in stranded investment capital, loss of customer
growth and additional barriers to cost recovery;</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;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;-</font></b></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">changes in the level of
the direct access customer cost responsibility surcharge, as well
as other surcharges related to direct access, and changes to the
current suspension of direct access;</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;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><font size="3" face=
"Times New Roman">-</font></b></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">the effect of compliance
with existing and future environmental laws, regulations and
policies;</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;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;-</font></b></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">the inability of various
counterparties to meet their obligations under their power sale
agreements with the Utility or with the California Department of
Water Resources thereby increasing the Utility&rsquo;s risk to
procure additional power to cover the net open position;</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;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;-</font></b></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">the outcome of pending
litigation and rate cases; and</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;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;-</font></b></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">significant changes in the
Utility&rsquo;s relationship with its employees, including the
retirement of existing employees, the availability of qualified
personnel and the potential adverse effects if labor disputes were
to occur.</font></p>
</td>
</tr>
</table>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
particular, the financial projections, attached as Exhibit 2, have
been prepared based upon certain assumptions that PG&amp;E
Corporation and the Utility believes to be reasonable under the
circumstances, taking into account the purpose for which they were
prepared.&nbsp; However, the financial projections were not
prepared with a view toward compliance with the published
guidelines of the Securities and Exchange Commission or the
American Institute of Certified Public Accountants regarding
projections or forecasts.&nbsp; In addition, the financial
projections have not been examined or compiled by the independent
accountants of the Utility or PG&amp;E Corporation.&nbsp; Neither
the Utility nor PG&amp;E Corporation makes any representation as to
the accuracy of the projections or the ability of the reorganized
Utility to achieve the projected results.&nbsp; Many of the
assumptions on which the projections are based are subject to
significant uncertainties.&nbsp; Some assumptions may not
materialize and unanticipated events and circumstances may affect
the actual financial results.&nbsp; Therefore, the actual results
achieved may vary from the projected results and the variations may
be material.</font></p>

<p><b><font size="3" face="Times New Roman"><br clear="all" />
</font></b></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>

<tr>
<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>

<tr>
<td valign="top"></td>
</tr>
</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">BRUCE R. WORTHINGTON<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;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">BRUCE R. WORTHINGTON<br />
 Senior Vice President and General Counsel</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<br />
 &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">DINYAR B. MISTRY<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">DINYAR B. MISTRY<br />
 Vice President and Controller</font></p>
</td>
</tr>
</table>

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

<table border="0" cellspacing="0" cellpadding="0" width="451">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Dated:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;July 8,
2003</font></p>
</td>
</tr>

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

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

<p><font size="3" face="Times New Roman"></font></p>
</div>
</body>
</html>
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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: July 8, 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
Proposed Settlement
Agreement
As
previously disclosed, PG&E Corporation and its subsidiary,
Pacific Gas and Electric Company (Utility) and the staff of the
California Public Utilities Commission (CPUC) entered into a
proposed settlement agreement that contemplates a new plan of
reorganization (Settlement Plan) to supercede the competing plans
of reorganization submitted in the Utility's proceeding under
Chapter 11 of the U.S. Bankruptcy Code pending in the U.S.
Bankruptcy Court for the Northern District of California
(Bankruptcy Court).  On June 27, 2003, PG&E Corporation,
the Utility, and the Official Committee of Unsecured Creditors, as
co-proponents, filed the Settlement Plan with the Bankruptcy
Court.  Among other conditions to effectiveness of the
Settlement Plan, the CPUC must approve the proposed settlement
agreement on or before December 31, 2003, the Bankruptcy Court must
approve the disclosure statement which will be used to solicit
approval of the Settlement Plan from creditors entitled to vote on
the Settlement Plan, and the Bankruptcy Court must confirm the
Settlement Plan.
The
CPUC has set a prehearing conference for July 9, 2003 regarding the
proposed settlement agreement. As requested by the CPUC, on July 1,
2003, the Utility submitted a proposed schedule of procedures it
believes are needed under the California Public Utilities Code and
CPUC policies and practices to implement the proposed settlement
agreement and Settlement Plan.  The Utility's proposed
schedule calls for evidentiary hearings to be completed by
September 12, 2003, for a proposed CPUC decision to be issued by
November 18, 2003, and for a final CPUC decision to be issued by
December 18, 2003.
Further,
the Bankruptcy Court has set a hearing for July 30, 2003 to
consider whether to approve the proposed disclosure statement
describing the Settlement Plan.
Credit
Ratings
On
June 23, 2003, Moody's Investors Service announced that it
placed the ratings of the Utility, including its senior
unsecured debt at Caa2, under review for possible upgrade following
the announcement of the proposed settlement
agreement.    On July 1, 2003, Fitch Ratings
announced that it had raised the ratings of the Utility's
senior secured debt and preferred stock to 'BB-' and 'DDD',
respectively, from 'DDD' and 'D'.  The Utility's secured
debt and preferred stock remains on Rating Watch Positive by Fitch.
Fitch stated that the ratings reflect the fact that the Utility is
currently paying all interest payments on its outstanding debt
securities and Fitch's view that the Utility is likely to continue
to do so through the remainder of the bankruptcy
process.
Item 9.
      Regulation FD Disclosure
The
information included in this Current Report on Form 8-K, including
portions of the Utility's monthly operating report for the
month ended May 31, 2003 filed with the Bankruptcy Court attached
hereto as Exhibit 1 and the financial projections relating to the
Settlement Plan attached hereto as Exhibit 2, are being furnished,
not filed, pursuant to Item 9 of Form 8-K.
Monthly Operating
Report
On
June 30, 2003, the Utility filed its monthly operating report for
the month ended May 31, 2003 with the Bankruptcy Court, as required
by Section 704(8) of the U.S. Bankruptcy Code and Rule 2015 of the
Federal Rules of Bankruptcy Procedure and prepared in accordance
with U.S. Trustee Guidelines Region 17.  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
an exhibit to this report.  Although not included in the
exhibit attached to this report, the monthly operating report filed
with the Bankruptcy Court 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.
Financial
Projections
On
July 8, 2003, PG&E Corporation and the Utility filed financial
projections relating to the Settlement Plan with the Bankruptcy
Court that are attached to this report as Exhibit 2.
Cautionary Statement
Regarding Forward Looking Statements
The
projected financial information attached hereto as Exhibit 2 and
the various assumptions underlying such projections constitute
forward-looking statements which are necessarily subject to various
risks and uncertainties that could cause actual results to differ
materially from those contemplated by the forward looking
statements and financial projections.  Some of the factors
that could cause results to differ materially include:
-
whether the proposed
settlement agreement with the CPUC, and the rates, tariffs and
agreements that it contemplates, are approved by the CPUC after
public hearings, the timing of such approval, and whether any such
approvals are appealed and, if appealed, the timing and resolution
of these appeals;
-
the outcome and the timing
of the Bankruptcy Court's proceeding to confirm the
Settlement Plan, whether the confirmation order is appealed and, if
appealed, the timing and resolution of these appeals,
-
the effect of judicial
decisions on the CPUC's authority to enter into and perform its
obligations under the proposed settlement agreement, including the
California Supreme Court's consideration of the legality of
recovery of under-collected costs by another California utility,
Southern California Edison Company, under a settlement and
stipulated federal court judgment with the CPUC;
-
prevailing governmental
policies and legislative or regulatory actions generally, including
those of the CPUC and the Federal Energy Regulatory Commission, or
the FERC, industry and rate structure, recovery of investments and
costs, acquisitions and disposal of assets and facilities,
treatment of affiliate contracts and relationships and operation
and construction of facilities;
-
whether the required
credit ratings to implement the Settlement Plan are
obtained;
-
the impact of future
ratemaking actions of the CPUC;
-
future equity or debt
market conditions, future interest rates, future credit ratings,
and other factors that may affect the ability to implement the
Settlement Plan or affect the terms, amount, and value of the debt
securities proposed to be issued under the Settlement
Plan;
-
unanticipated changes in
operating expenses and capital expenditures;
-
the level and volatility
of wholesale electricity and natural gas prices and the
Utility's ability to manage and respond to this volatility
successfully;
-
increased competition as a
result of municipalization of the Utility's distribution assets,
self-generation by its customers and other forms of competition
that may result in stranded investment capital, loss of customer
growth and additional barriers to cost recovery;
-
changes in the level of
the direct access customer cost responsibility surcharge, as well
as other surcharges related to direct access, and changes to the
current suspension of direct access;
-
the effect of compliance
with existing and future environmental laws, regulations and
policies;
-
the inability of various
counterparties to meet their obligations under their power sale
agreements with the Utility or with the California Department of
Water Resources thereby increasing the Utility's risk to
procure additional power to cover the net open position;
-
the outcome of pending
litigation and rate cases; and
-
significant changes in the
Utility's relationship with its employees, including the
retirement of existing employees, the availability of qualified
personnel and the potential adverse effects if labor disputes were
to occur.
In
particular, the financial projections, attached as Exhibit 2, have
been prepared based upon certain assumptions that PG&E
Corporation and the Utility believes to be reasonable under the
circumstances, taking into account the purpose for which they were
prepared.  However, the financial projections were not
prepared with a view toward compliance with the published
guidelines of the Securities and Exchange Commission or the
American Institute of Certified Public Accountants regarding
projections or forecasts.  In addition, the financial
projections have not been examined or compiled by the independent
accountants of the Utility or PG&E Corporation.  Neither
the Utility nor PG&E Corporation makes any representation as to
the accuracy of the projections or the ability of the reorganized
Utility to achieve the projected results.  Many of the
assumptions on which the projections are based are subject to
significant uncertainties.  Some assumptions may not
materialize and unanticipated events and circumstances may affect
the actual financial results.  Therefore, the actual results
achieved may vary from the projected results and the variations may
be material.
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:
BRUCE R. WORTHINGTON
__________________________________________
BRUCE R. WORTHINGTON
Senior Vice President and General Counsel
PACIFIC GAS AND ELECTRIC
COMPANY
By:
DINYAR B. MISTRY
_________________________________________
DINYAR B. MISTRY
Vice President and Controller
Dated:     July 8,
2003