<html>
<head>
<title>SECURITIES AND EXCHANGE COMMISSION</title>
</head>
<body link="blue" vlink="purple">
<div>
<p align="center"><font size="3" face=
"Times New Roman">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman">SECURITIES
AND EXCHANGE COMMISSION</font></p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman"><br />
 </font></p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman">Washington,
D.C.&nbsp; 20549</font></p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman"><br />
 </font></p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman">FORM
8-K</font></p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman"><br />
 </font></p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman">CURRENT
REPORT</font></p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman"><br />
 </font></p>
</td>
</tr>

<tr>
<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>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman"><br />
 </font></p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman">Date of
Report: May 13, 2004</font></p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman"><br />
 </font></p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><font size="3" face="Times New Roman"><br />
 Commission<br />
 File<br />
 Number</font></p>
</td>
<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>
</tr>

<tr>
<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>
</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>
</td>
</tr>

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

<p align="center"><font size="3" face="Times New Roman"><br />
 </font></p>
</td>
</tr>

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

<tr>
<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>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman"></font></p>

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

<tr>
<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>
</tr>

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

<tr>
<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"></td>
</tr>

<tr>
<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>
</tr>

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

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

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

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

<hr>

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

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

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

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

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

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
May 12, 2004, Pacific Gas and Electric Company (Utility), a
subsidiary of PG&amp;E Corporation, filed a cost of capital
application with the California Public Utilities Commission (CPUC)
to recover in rates its (1) actual cost of capital (long term debt
and costs of preferred stock) from January 1, 2004 through April
11, 2004, (2) its new cost of capital resulting from the
Utility&rsquo;s financing consummated in connection with the
implementation of the Utility&rsquo;s plan of reorganization under
Chapter 11 of the U.S. Bankruptcy Code on April 12, 2004, and (3)
costs associated with interest rate hedges for its Chapter 11 exit
financing.&nbsp; The application also requests authorization for
the Utility&rsquo;s forecast cost of capital and capital structure
for 2005.&nbsp;</font></p>

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

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Utility's currently authorized return on equity (ROE) for its
electricity and natural gas distribution operations and for its
electricity generation operations is 11.22%, and its currently
authorized cost of debt is 7.57%.&nbsp; The Utility&rsquo;s
currently authorized cost of preferred stock is 6.05%.&nbsp; The
Utility's currently authorized capital structure is 48.00% common
equity, 46.20% long-term debt and 5.80% preferred
equity.</font></p>

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

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
December 2003 settlement agreement entered into among the Utility,
PG&amp;E Corporation and the CPUC (Settlement Agreement), provides
that from January 1, 2004 until Moody's Investor Services has
issued an issuer rating for the Utility of not less than A3 or
Standard &amp; Poor&rsquo;s has issued a long-term issuer credit
rating for the Utility of not less than A-, the Utility's
authorized ROE will be no less than 11.22% per year and its
authorized equity ratio will be no less than 52%.&nbsp; However,
the Settlement Agreement provides that the Utility's authorized
equity ratio for 2004 and 2005 will equal the greater of the
proportion of equity approved in the Utility's 2004 and 2005 cost
of capital proceedings or 48.6%.&nbsp; The Settlement Agreement
also provides that the Utility shall be allowed to recover the
reasonable costs of hedging interest rates for its exit financing
and that the costs of financing, including fees, shall be fully
recoverable as part of the cost of debt to be collected in the
Utility&rsquo;s retail gas and electric rates without further
review.&nbsp;&nbsp;</font></p>

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

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>
Requested authorization for 2004.</u>&nbsp; The Utility has not
requested a change to its currently authorized ROE of 11.22 % for
2004. For 2004, the Utility has requested an authorized capital
structure consisting of 49% common equity, 2.8 % preferred equity,
and 48.2 % long-term debt.&nbsp; The Utility&rsquo;s new cost of
long-term debt is 5.17 percent for the period from April 12 to
December 31, 2004, which results in a weighted average cost of debt
for 2004 of 5.82%.&nbsp; The Utility requested an authorized cost
of preferred stock of 6.76 % for 2004.&nbsp;</font></p>

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

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
resulting overall rate of return (ROR) for 2004 would be 8.49% and
the Utility&rsquo;s annual revenue requirement for 2004 would
decrease by $106 million compared to currently authorized revenue
requirements.</font></p>

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

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>
Requested Authorization for 2005.</u>&nbsp;&nbsp; The Utility
requested an authorized ROE of 11.60 % for its gas and electric
distribution operations, its electric generation operations, and
for its natural gas transmission and storage operations.&nbsp; The
Utility&rsquo;s requested cost of preferred stock for 2005 is
6.42%.&nbsp; The Utility has requested an authorized capital
structure for 2005 consisting of 52.0 % common equity, 45.5 %
preferred equity, and 2.5 % long-term debt.&nbsp; The requested
capital structure reflects an assumption that bonds in the
approximate amount of $2 billion, secured by a dedicated rate
component (DRC), are sold on January 1, 2005 and that the proceeds
of the issuance are used to rebalance the Utility&rsquo;s capital
structure in order to attain the target capital structure of 52%
equity ratio as provided in the Settlement Agreement and to fund
infrastructure capital expenditures. (The California legislation to
authorize the DRC financing, Senate Bill 772, was approved by the
California Assembly on May 10, 2004.&nbsp; The bill will be sent to
the California Senate for consideration.&nbsp; If approved by the
California Senate, the bill will be sent to the California Governor
for signature by the end of May 2004.)</font></p>

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

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
2005, the Utility has requested an authorized cost of debt of
5.94%.&nbsp; The Utility&rsquo;s estimated cost of debt for 2005
assumes that the first tranche of DRC financing of approximately $2
billion has occurred on January 1, 2005.&nbsp; The Utility plans to
use a portion of the proceeds from the DRC financing to redeem all
or a portion of the Utility&rsquo;s 2-year floating rate notes
issued in March 2004.&nbsp; Since the interest rate on these
floating rate notes is significantly lower than the interest rates
on the remaining long-term debt issued in the Utility&rsquo;s exit
financing, redeeming the 2- year floating rate notes would cause
the average cost of the Utility&rsquo;s remaining debt to be
higher.&nbsp; The combined effect of the increased average cost of
debt, the requested ROE, and the 52 % equity ratio would cause the
Utility&rsquo;s forecast revenue requirement for 2005 to increase
by approximately $104 million over the requested reduction for 2004
and would result in an overall ROR of 8.90 % for 2005.&nbsp; This
revenue requirement change would not include the reduction in
revenue requirements that would result from the DRC
financing.&nbsp; (After the DRC financing, the 11.22% ROE on the
$2.21 billion after-tax regulatory asset established under the
Settlement Agreement would be reduced by the amount of the
financing.&nbsp; Instead, the Utility would recover the cost of
debt (principal and interest) related to the DRC financing from
customers through the dedicated rate component.)</font></p>

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

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Utility has proposed to include any electric revenue requirement
change authorized in this proceeding in rates effective January 1,
2005.&nbsp; The Utility has proposed to include any gas revenue
requirement changes authorized in this proceeding in the next gas
transportation rate change, annual true-up or the biennial cost
allocation proceeding.</font></p>

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

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Utility has proposed a procedural schedule for its cost of capital
application that contemplates that hearings would begin August 23,
2004 and that the assigned administrative law judge would issue a
proposed decision by November 2, 2004.</font></p>

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

<hr>

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

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

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

<tr height="1">
<td height="1" valign="top"></td>
<td height="1" valign="top" bgcolor="black"></td>
<td height="1" valign="top"></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;&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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Christopher
P. Johns<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Senior Vice President
and Controller</font></p>

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

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

<tr height="53">
<td height="53" 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td colspan="2" height="53" valign="top">
<p><font size="3" face="Times New Roman">PACIFIC GAS AND ELECTRIC
COMPANY</font></p>

<p><font size="3" face="Times New Roman"></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;&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">By:&nbsp;&nbsp;DINYAR B.
MISTRY</font></p>
</td>
</tr>

<tr height="1">
<td height="1" valign="top"></td>
<td height="1" valign="top" bgcolor="black"></td>
<td height="1" valign="top"></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;&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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dinyar
B. Mistry<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vice President and
Controller</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Dated:&nbsp; May 13,
2004</font></p>
</td>
<td colspan="2" valign="top"></td>
</tr>
</table>

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

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

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

<p><font size="3" face="Times New Roman"></font></p>
</div>
</body>
</html>
[{"type": "8-K", "sequence": "1", "filename": "costofcapfinal514m.htm", "description": "FORM 8-K", "secsgml_size_bytes": 20238}]
{"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": "04803896"}, "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
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 13, 2004
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
and Regulation FD Disclosure
On
May 12, 2004, Pacific Gas and Electric Company (Utility), a
subsidiary of PG&E Corporation, filed a cost of capital
application with the California Public Utilities Commission (CPUC)
to recover in rates its (1) actual cost of capital (long term debt
and costs of preferred stock) from January 1, 2004 through April
11, 2004, (2) its new cost of capital resulting from the
Utility's financing consummated in connection with the
implementation of the Utility's plan of reorganization under
Chapter 11 of the U.S. Bankruptcy Code on April 12, 2004, and (3)
costs associated with interest rate hedges for its Chapter 11 exit
financing.  The application also requests authorization for
the Utility's forecast cost of capital and capital structure
for 2005.
The
Utility's currently authorized return on equity (ROE) for its
electricity and natural gas distribution operations and for its
electricity generation operations is 11.22%, and its currently
authorized cost of debt is 7.57%.  The Utility's
currently authorized cost of preferred stock is 6.05%.  The
Utility's currently authorized capital structure is 48.00% common
equity, 46.20% long-term debt and 5.80% preferred
equity.
The
December 2003 settlement agreement entered into among the Utility,
PG&E Corporation and the CPUC (Settlement Agreement), provides
that from January 1, 2004 until Moody's Investor Services has
issued an issuer rating for the Utility of not less than A3 or
Standard & Poor's has issued a long-term issuer credit
rating for the Utility of not less than A-, the Utility's
authorized ROE will be no less than 11.22% per year and its
authorized equity ratio will be no less than 52%.  However,
the Settlement Agreement provides that the Utility's authorized
equity ratio for 2004 and 2005 will equal the greater of the
proportion of equity approved in the Utility's 2004 and 2005 cost
of capital proceedings or 48.6%.  The Settlement Agreement
also provides that the Utility shall be allowed to recover the
reasonable costs of hedging interest rates for its exit financing
and that the costs of financing, including fees, shall be fully
recoverable as part of the cost of debt to be collected in the
Utility's retail gas and electric rates without further
review.
Requested authorization for 2004.
The Utility has not
requested a change to its currently authorized ROE of 11.22 % for
2004. For 2004, the Utility has requested an authorized capital
structure consisting of 49% common equity, 2.8 % preferred equity,
and 48.2 % long-term debt.  The Utility's new cost of
long-term debt is 5.17 percent for the period from April 12 to
December 31, 2004, which results in a weighted average cost of debt
for 2004 of 5.82%.  The Utility requested an authorized cost
of preferred stock of 6.76 % for 2004.
The
resulting overall rate of return (ROR) for 2004 would be 8.49% and
the Utility's annual revenue requirement for 2004 would
decrease by $106 million compared to currently authorized revenue
requirements.
Requested Authorization for 2005.
The Utility
requested an authorized ROE of 11.60 % for its gas and electric
distribution operations, its electric generation operations, and
for its natural gas transmission and storage operations.  The
Utility's requested cost of preferred stock for 2005 is
6.42%.  The Utility has requested an authorized capital
structure for 2005 consisting of 52.0 % common equity, 45.5 %
preferred equity, and 2.5 % long-term debt.  The requested
capital structure reflects an assumption that bonds in the
approximate amount of $2 billion, secured by a dedicated rate
component (DRC), are sold on January 1, 2005 and that the proceeds
of the issuance are used to rebalance the Utility's capital
structure in order to attain the target capital structure of 52%
equity ratio as provided in the Settlement Agreement and to fund
infrastructure capital expenditures. (The California legislation to
authorize the DRC financing, Senate Bill 772, was approved by the
California Assembly on May 10, 2004.  The bill will be sent to
the California Senate for consideration.  If approved by the
California Senate, the bill will be sent to the California Governor
for signature by the end of May 2004.)
For
2005, the Utility has requested an authorized cost of debt of
5.94%.  The Utility's estimated cost of debt for 2005
assumes that the first tranche of DRC financing of approximately $2
billion has occurred on January 1, 2005.  The Utility plans to
use a portion of the proceeds from the DRC financing to redeem all
or a portion of the Utility's 2-year floating rate notes
issued in March 2004.  Since the interest rate on these
floating rate notes is significantly lower than the interest rates
on the remaining long-term debt issued in the Utility's exit
financing, redeeming the 2- year floating rate notes would cause
the average cost of the Utility's remaining debt to be
higher.  The combined effect of the increased average cost of
debt, the requested ROE, and the 52 % equity ratio would cause the
Utility's forecast revenue requirement for 2005 to increase
by approximately $104 million over the requested reduction for 2004
and would result in an overall ROR of 8.90 % for 2005.  This
revenue requirement change would not include the reduction in
revenue requirements that would result from the DRC
financing.  (After the DRC financing, the 11.22% ROE on the
$2.21 billion after-tax regulatory asset established under the
Settlement Agreement would be reduced by the amount of the
financing.  Instead, the Utility would recover the cost of
debt (principal and interest) related to the DRC financing from
customers through the dedicated rate component.)
The
Utility has proposed to include any electric revenue requirement
change authorized in this proceeding in rates effective January 1,
2005.  The Utility has proposed to include any gas revenue
requirement changes authorized in this proceeding in the next gas
transportation rate change, annual true-up or the biennial cost
allocation proceeding.
The
Utility has proposed a procedural schedule for its cost of capital
application that contemplates that hearings would begin August 23,
2004 and that the assigned administrative law judge would issue a
proposed decision by November 2, 2004.
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:  DINYAR B.
MISTRY
Dinyar
B. Mistry
Vice President and
Controller
Dated:  May 13,
2004