<html>
<head>
<title>PG&amp;E Corporation and Pacific Gas and Electric
Company</title>
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<body link="blue" vlink="purple">
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<p align="center"><b>UNITED STATES</b></p>
</td>
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<p align="center"><b>SECURITIES AND EXCHANGE COMMISSION</b></p>
</td>
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<p align="center"><b>Washington, D.C.&nbsp; 20549</b></p>
</td>
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<p><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b></p>
</td>
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<p align="center"><b>FORM 8-K</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>CURRENT REPORT</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b></p>
</td>
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<p align="center"><b>Date of Report: March 4, 2005</b></p>

<p align="center">
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b></p>
</td>
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<tr>
<td colspan="5" valign="top">
<p align="center"><b>PG&amp;E CORPORATION</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>(Exact Name of Registrant as specified in
Charter)</b></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><u>California</u></b></p>
</td>
<td colspan="2" valign="top">
<p align="center"><b><u>1-2609</u></b></p>
</td>
<td colspan="2" valign="top">
<p align="center"><b><u>94-323914</u></b></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">(State or other jurisdiction of
incorporation)</p>
</td>
<td colspan="2" valign="top">
<p align="center"><br />
 (Commission File Number)</p>
</td>
<td colspan="2" valign="top">
<p align="center">(IRS Employer<br />
 Identification No.)</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top">
<p align="center"><b><u>One Market, Spear Tower, Suite 2400, San
Francisco, CA</u></b></p>
</td>
<td colspan="3" valign="top">
<p align="center"><b><u>94105</u></b></p>
</td>
</tr>

<tr>
<td colspan="2" valign="top">
<p align="center">(Address of principal executive offices)</p>
</td>
<td colspan="3" valign="top">
<p align="center">(Zip code)</p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b><u>415-267-7000</u></b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>(Registrant&rsquo;s Telephone Number,
Including Area Code)</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b><u>N/A</u></b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>(Former Name or Former Address, if Changed
Since Last Report)</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>PACIFIC GAS AND ELECTRIC COMPANY</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>(Exact Name of Registrant as specified in
Charter)</b></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><u>California</u></b></p>
</td>
<td colspan="2" valign="top">
<p align="center"><b><u>1-2348</u></b></p>
</td>
<td colspan="2" valign="top">
<p align="center"><b><u>94-0742640</u></b></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">(State or other jurisdiction of
incorporation)</p>
</td>
<td colspan="2" valign="top">
<p align="center"><br />
 (Commission File Number)</p>
</td>
<td colspan="2" valign="top">
<p align="center">(IRS Employer<br />
 Identification No.)</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td colspan="2" valign="top"></td>
<td colspan="2" valign="top"></td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><b><u>77 Beale Street, P. O. Box 770000, San
Francisco, California</u></b></p>
</td>
<td valign="top">
<p align="center"><b><u>94177</u></b></p>
</td>
</tr>

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

<tr>
<td colspan="5" valign="top">
<p align="center"><b><u>(415) 973-7000</u></b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>(Registrant&rsquo;s Telephone Number,
Including Area Code)</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b><u>N/A</u></b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>(Former Name or Former Address, if Changed
Since Last Report)</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top"></td>
</tr>

<tr>
<td colspan="5" valign="top">
<p><br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):</p>
</td>
</tr>
</table>

<table border="0" cellspacing="0" cellpadding="0" width="624">
<tr>
<td valign="top">
<p>[&nbsp;]</p>
</td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)</p>
</td>
</tr>

<tr>
<td valign="top">
<p>[&nbsp;]</p>
</td>
<td valign="top"></td>
<td valign="top">
<p>Soliciting Material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)</p>
</td>
</tr>

<tr>
<td valign="top">
<p>[&nbsp;]</p>
</td>
<td valign="top"></td>
<td valign="top">
<p>Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act<br />
 (17 CFR 240.14d-2(b)</p>
</td>
</tr>

<tr>
<td valign="top">
<p>[&nbsp;]</p>
</td>
<td valign="top"></td>
<td valign="top">
<p>Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act<br />
 (17 CFR 240.13e-4(c))</p>
</td>
</tr>
</table>

<p><b></b></p>

<div align="center">
<hr size="2" width="624" align="center" />
</div>

<p><b>Item 1.01 &ndash; Entry Into a Material Definitive
Agreement</b></p>

<p>Accelerated Share Repurchase Transaction</p>

<p>In accordance with its previously announced expectation, on
March 4, 2005, PG&amp;E Corporation entered into accelerated share
repurchase arrangements with Goldman, Sachs &amp; Co. (GS&amp;Co.)
under which PG&amp;E Corporation has repurchased approximately 29.5
million shares of its outstanding common stock at an initial price
of $35.60 per share and an aggregate price of approximately $1.050
billion (in each case exclusive of commissions).&nbsp; The
repurchase will be funded from available cash on hand.&nbsp; The
repurchased shares will be retired.&nbsp;</p>

<p>Under the terms of the arrangements, certain additional payments
are required by both PG&amp;E Corporation and GS&amp;Co.&nbsp; Most
significantly, PG&amp;E Corporation may receive from, or be
required to pay, GS&amp;Co. a price adjustment based on the daily
volume weighted average market price (VWAP) of PG&amp;E Corporation
common stock over a period of approximately six months.&nbsp; Any
additional payments that PG&amp;E Corporation must make can be
settled, at PG&amp;E Corporation&rsquo;s option, in cash, in shares
of its common stock, or a combination of the two.</p>

<p></p>

<p>GS&amp;Co. may terminate the transaction (i) in the event of a
default by PG&amp;E Corporation under the accelerated share
repurchase arrangements (which would include the acceleration of
certain other PG&amp;E Corporation indebtedness in a principal
amount in excess of $75 million), (ii) on the day before any
ex-dividend date of a PG&amp;E Corporation dividend that occurs
after April 15, 2005, and (iii) in certain other
circumstances.&nbsp; In the event of termination in connection with
an ex-dividend date, PG&amp;E Corporation and GS&amp;Co. may elect
to enter into a new agreement to complete the original transaction
although the price adjustment based on the to-date VWAP and certain
other amounts would become payable.&nbsp; Upon an early termination
(other than when a new agreement is executed to complete the
original transaction), PG&amp;E Corporation would be required to
compensate GS&amp;Co. for losses it incurred in connection with the
accelerated share repurchase transaction.</p>

<p></p>

<p>Any shares that PG&amp;E Corporation issues in the future in
connection with an early termination of the transaction or to
compensate GS&amp;Co. for any additional amounts due under the
accelerated share repurchase arrangements would increase the number
of shares outstanding at the time of issuance.&nbsp; In addition,
until the transaction is completed or terminated, generally
accepted accounting principles require PG&amp;E Corporation to
assume that it will issue shares to settle any obligation to
GS&amp;Co.&nbsp;&nbsp; PG&amp;E Corporation must calculate the
number of shares that would be required to satisfy the obligation
upon completion of the transaction based on the market price of
PG&amp;E Corporation common stock at the end of a quarterly or
year-end reporting period.&nbsp; The number of shares PG&amp;E
Corporation must treat as having been issued to settle such
obligation would be included in the number of shares outstanding
for purposes of calculating PG&amp;E Corporation&rsquo;s fully
diluted earnings per share for that reporting period.</p>

<p></p>

<p>GS&amp;Co. and certain of its affiliates have engaged, and may
in the future engage, in financial advisory, investment banking and
other services for PG&amp;E Corporation and its affiliates,
including entering into previous accelerated share repurchase
arrangements and acting as a lender under PG&amp;E
Corporation&rsquo;s credit agreement.</p>

<p><b>Item 2.03 &ndash; Creation of a Direct Financial Obligation
or an Obligation under an Off-Balance Sheet Arrangement of a
Registrant</b></p>

<p>The information set forth above in Item 1.01 regarding PG&amp;E
Corporation&rsquo;s undertaking of an accelerated share repurchase
is hereby incorporated into Item 2.03(b) by reference.</p>

<p></p>

<h3>Item 8.01 - Other Events</h3>

<p></p>

<p>A.&nbsp; Notice of Redemption of Pacific Gas and Electric
Company&rsquo;s (Utility) Floating Rate First Mortgage Bonds</p>

<p></p>

<p>On March 1, 2005, pursuant to the Utility&rsquo;s instruction,
the trustee under the indenture for the Utility&rsquo;s Floating
Rate First Mortgage Bonds due 2006 provided notice that $600
million aggregate principal amount of Floating Rate First Mortgage
Bonds would be redeemed on April 3, 2005.&nbsp; As previously
disclosed, on February 24, 2005, the Utility defeased $600 million
aggregate principal amount of Floating Rate First Mortgage Bonds by
irrevocably depositing the redemption funds with the trustee to be
held in escrow until the redemption date. The bonds to be redeemed
will be selected from all Floating Rate First Mortgage Bonds due
2006 in accordance with the procedures of The Depository Trust
Company.&nbsp;&nbsp; The principal aggregate amount of Floating
Rate First Mortgage Bonds that remains outstanding is $200
million.</p>

<p>B.&nbsp; Credit Rating Agency Actions</p>

<p>On March 3, 2005, Moody&rsquo;s Investors Service
(Moody&rsquo;s) announced that it had upgraded its issuer credit
rating on the Utility to Baa1 from Baa3 and assigned a Baa3 issuer
rating to PG&amp;E Corporation.&nbsp; The Utility&rsquo;s other
ratings that have been upgraded by Moody&rsquo;s are:</p>

<ul type="disc">
<li>First mortgage bonds, secured pollution control bonds, and
secured bank loan agreement to Baa1 from Baa2;</li>

<li>Preferred stock to Baa3 from Ba2;</li>

<li>Shelf registration for the issuance of First Mortgage Bonds to
(P)Baa1 from (P)Baa2, and</li>

<li>The issuance of senior unsecured debt to (P)Baa1 from
(P)Baa3.</li>
</ul>

<p>Moody&rsquo;s also assigned a rating of Baa3 to PG&amp;E
Corporation&rsquo;s $200 million unsecured bank revolving credit
facility.&nbsp; Moody&rsquo;s stated that its rating outlook is
stable for the Utility and PG&amp;E Corporation.&nbsp;</p>

<p>Moody&rsquo;s stated that its upgrade reflects a number of
recent positive developments, which collectively strengthen the
Utility&rsquo;s credit quality, including strong financial
performance since the Utility emerged from bankruptcy in April
2004, prospective financial metrics that are consistent with the
higher rating, the issuance of approximately $1.9 billion of energy
reduction bonds in February 2005, the continuation of a more
constructive regulatory environment, and the extinguishment of
PG&amp;E Corporation&rsquo;s ownership in National Energy &amp; Gas
Transmission, Inc.&nbsp;&nbsp; Moody&rsquo;s also stated that its
rating also considers numerous unresolved state and federal
regulatory issues, as well as related litigation, and noted that
there is some uncertainty concerning the regulatory framework that
would result if the state reintroduces some form of direct
access.</p>

<p>Moody&rsquo;s also stated that its rating of the Utility&rsquo;s
senior secured debt is the same as its issuer rating because
Moody&rsquo;s anticipates that all of this debt will shortly become
unsecured noting that the terms of the indenture for the First
Mortgage Bonds provides for the release of collateral securing the
debt after certain conditions are satisfied.&nbsp;</p>

<p>The First Mortgage Bonds, which were issued in March 2004, are
secured by a lien on substantially all of the Utility's real
property and certain tangible personal property related to the
Utility's facilities. The indenture provides that the lien may be
released on a date chosen by the Utility and specified in an order
delivered by the Utility to the trustee (the &ldquo;release
date&rdquo;), along with other documentation, including:</p>

<ul type="disc">
<li>Written evidence that the ratings assigned by Moody's and
Standard &amp; Poor&rsquo;s Rating Service (S&amp;P) on
the&nbsp;&nbsp;&nbsp;&nbsp; Utility's long-term unsecured debt
obligations immediately after the release date would be at least
equal to the initial ratings on the First Mortgage Bonds (BBB by
S&amp;P and Baa2 by Moody&rsquo;s), and</li>

<li>An officer&rsquo;s certificate stating that the aggregate
principal amount of debt secured by a lien on any principal
property that would be outstanding immediately after the release
date, excluding debt secured by specified liens, would not exceed
5% of the Utility's tangible net assets, as defined in the
indenture.</li>
</ul>

<p>As previously disclosed, on February 16, 2005, S&amp;P upgraded
its corporate credit rating on the Utility to BBB from BBB- and
affirmed its BBB senior secured rating on the Utility&rsquo;s First
Mortgage Bonds.&nbsp; In order to meet the condition specified in
the indenture, the Utility would need to obtain from S&amp;P and
Moody's written confirmation before the anticipated release date
that the Utility's long-term unsecured debt obligations immediately
after the release date would be at least equal to BBB (S&amp;P) and
Baa2 (Moody&rsquo;s).&nbsp;&nbsp; If the lien is released, there
will be no collateral securing the First Mortgage Bonds and the
bonds will become the Utility's unsecured general obligations
ranking <i>pari passu</i> with the Utility's other unsecured
debt.&nbsp; Under the indenture, the Utility has pledged that after
the release date, it will not incur secured debt except for (i)
debt secured by specified liens, and (ii) secured debt in an amount
not exceeding 10% of the Utility's tangible net assets, as defined
in the indenture.</p>

<p>As previously disclosed, the settlement agreement entered into
among PG&amp;E Corporation, the Utility and the California Public
Utilities Commission (CPUC) to resolve the Utility&rsquo;s Chapter
11 proceeding (Settlement Agreement), provides that the CPUC will
set the Utility&rsquo;s capital structure and authorized return on
equity (ROE) in the Utility&rsquo;s annual cost of capital
proceedings in its usual manner; <u>&shy;provided that</u>, the
authorized ROE shall not be less than 11.22% per year and the
authorized equity ratio for ratemaking purposes shall not be less
than 52% until the Utility&rsquo;s long-term issuer credit ratings
are at least A- from S&amp;P or A3 from Moody's.&nbsp;</p>

<p></p>

<br clear="all" />


<table border="0" cellspacing="0" cellpadding="0" width="624">
<tr>
<td valign="top">
<p align="center">SIGNATURE</p>
</td>
</tr>

<tr>
<td valign="top">
<p>&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top">
<p>Pursuant to the requirements of the Securities Exchange Act of
1934, the registrants have duly caused this report to be signed on
their behalf by the undersigned thereunto duly authorized.</p>

<p>&nbsp;</p>
</td>
</tr>
</table>

<p></p>

<p></p>

<table border="0" cellspacing="0" cellpadding="0" width="624">
<tr>
<td valign="top"></td>
<td colspan="2" valign="top">
<p>PG&amp;E CORPORATION</p>
</td>
</tr>

<tr>
<td valign="top">
<p>&nbsp;</p>
</td>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>By:&nbsp;&nbsp;</p>
</td>
<td valign="top">
<div>
<p>Christopher P. Johns</p>
</div>
</td>
</tr>

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top"></td>
<td valign="top">
<p>Christopher P. Johns<br />
 Senior Vice President, Chief Financial Officer and Controller</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td colspan="2" valign="top">
<p>PACIFIC GAS AND ELECTRIC COMPANY</p>
</td>
</tr>

<tr>
<td valign="top">
<p>&nbsp;</p>
</td>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>By:&nbsp;&nbsp;</p>
</td>
<td valign="top">
<div>
<p>Dinyar B. Mistry</p>
</div>
</td>
</tr>

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top"></td>
<td valign="top">
<p>Dinyar B. Mistry<br />
 Vice President and Controller</p>
</td>
</tr>
</table>

<p>Dated:&nbsp; March 4, 2005</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": "05662559"}, "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"}}
PG&E Corporation and Pacific Gas and Electric
Company
UNITED STATES
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: March 4, 2005
PG&E CORPORATION
(Exact Name of Registrant as specified in
Charter)
California
1-2609
94-323914
(State or other jurisdiction of
incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
One Market, Spear Tower, Suite 2400, San
Francisco, CA
94105
(Address of principal executive offices)
(Zip code)
415-267-7000
(Registrant's Telephone Number,
Including Area Code)
N/A
(Former Name or Former Address, if Changed
Since Last Report)
PACIFIC GAS AND ELECTRIC COMPANY
(Exact Name of Registrant as specified in
Charter)
California
1-2348
94-0742640
(State or other jurisdiction of
incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
77 Beale Street, P. O. Box 770000, San
Francisco, California
94177
(Address of principal executive offices)
(Zip code)
(415) 973-7000
(Registrant's Telephone Number,
Including Area Code)
N/A
(Former Name or Former Address, if Changed
Since Last Report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
[ ]
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ]
Soliciting Material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act
(17 CFR 240.14d-2(b)
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act
(17 CFR 240.13e-4(c))
Item 1.01 – Entry Into a Material Definitive
Agreement
Accelerated Share Repurchase Transaction
In accordance with its previously announced expectation, on
March 4, 2005, PG&E Corporation entered into accelerated share
repurchase arrangements with Goldman, Sachs & Co. (GS&Co.)
under which PG&E Corporation has repurchased approximately 29.5
million shares of its outstanding common stock at an initial price
of $35.60 per share and an aggregate price of approximately $1.050
billion (in each case exclusive of commissions).  The
repurchase will be funded from available cash on hand.  The
repurchased shares will be retired.
Under the terms of the arrangements, certain additional payments
are required by both PG&E Corporation and GS&Co.  Most
significantly, PG&E Corporation may receive from, or be
required to pay, GS&Co. a price adjustment based on the daily
volume weighted average market price (VWAP) of PG&E Corporation
common stock over a period of approximately six months.  Any
additional payments that PG&E Corporation must make can be
settled, at PG&E Corporation's option, in cash, in shares
of its common stock, or a combination of the two.
GS&Co. may terminate the transaction (i) in the event of a
default by PG&E Corporation under the accelerated share
repurchase arrangements (which would include the acceleration of
certain other PG&E Corporation indebtedness in a principal
amount in excess of $75 million), (ii) on the day before any
ex-dividend date of a PG&E Corporation dividend that occurs
after April 15, 2005, and (iii) in certain other
circumstances.  In the event of termination in connection with
an ex-dividend date, PG&E Corporation and GS&Co. may elect
to enter into a new agreement to complete the original transaction
although the price adjustment based on the to-date VWAP and certain
other amounts would become payable.  Upon an early termination
(other than when a new agreement is executed to complete the
original transaction), PG&E Corporation would be required to
compensate GS&Co. for losses it incurred in connection with the
accelerated share repurchase transaction.
Any shares that PG&E Corporation issues in the future in
connection with an early termination of the transaction or to
compensate GS&Co. for any additional amounts due under the
accelerated share repurchase arrangements would increase the number
of shares outstanding at the time of issuance.  In addition,
until the transaction is completed or terminated, generally
accepted accounting principles require PG&E Corporation to
assume that it will issue shares to settle any obligation to
GS&Co.   PG&E Corporation must calculate the
number of shares that would be required to satisfy the obligation
upon completion of the transaction based on the market price of
PG&E Corporation common stock at the end of a quarterly or
year-end reporting period.  The number of shares PG&E
Corporation must treat as having been issued to settle such
obligation would be included in the number of shares outstanding
for purposes of calculating PG&E Corporation's fully
diluted earnings per share for that reporting period.
GS&Co. and certain of its affiliates have engaged, and may
in the future engage, in financial advisory, investment banking and
other services for PG&E Corporation and its affiliates,
including entering into previous accelerated share repurchase
arrangements and acting as a lender under PG&E
Corporation's credit agreement.
Item 2.03 – Creation of a Direct Financial Obligation
or an Obligation under an Off-Balance Sheet Arrangement of a
Registrant
The information set forth above in Item 1.01 regarding PG&E
Corporation's undertaking of an accelerated share repurchase
is hereby incorporated into Item 2.03(b) by reference.
Item 8.01 - Other Events
A.  Notice of Redemption of Pacific Gas and Electric
Company's (Utility) Floating Rate First Mortgage Bonds
On March 1, 2005, pursuant to the Utility's instruction,
the trustee under the indenture for the Utility's Floating
Rate First Mortgage Bonds due 2006 provided notice that $600
million aggregate principal amount of Floating Rate First Mortgage
Bonds would be redeemed on April 3, 2005.  As previously
disclosed, on February 24, 2005, the Utility defeased $600 million
aggregate principal amount of Floating Rate First Mortgage Bonds by
irrevocably depositing the redemption funds with the trustee to be
held in escrow until the redemption date. The bonds to be redeemed
will be selected from all Floating Rate First Mortgage Bonds due
2006 in accordance with the procedures of The Depository Trust
Company.   The principal aggregate amount of Floating
Rate First Mortgage Bonds that remains outstanding is $200
million.
B.  Credit Rating Agency Actions
On March 3, 2005, Moody's Investors Service
(Moody's) announced that it had upgraded its issuer credit
rating on the Utility to Baa1 from Baa3 and assigned a Baa3 issuer
rating to PG&E Corporation.  The Utility's other
ratings that have been upgraded by Moody's are:
First mortgage bonds, secured pollution control bonds, and
secured bank loan agreement to Baa1 from Baa2;
Preferred stock to Baa3 from Ba2;
Shelf registration for the issuance of First Mortgage Bonds to
(P)Baa1 from (P)Baa2, and
The issuance of senior unsecured debt to (P)Baa1 from
(P)Baa3.
Moody's also assigned a rating of Baa3 to PG&E
Corporation's $200 million unsecured bank revolving credit
facility.  Moody's stated that its rating outlook is
stable for the Utility and PG&E Corporation.
Moody's stated that its upgrade reflects a number of
recent positive developments, which collectively strengthen the
Utility's credit quality, including strong financial
performance since the Utility emerged from bankruptcy in April
2004, prospective financial metrics that are consistent with the
higher rating, the issuance of approximately $1.9 billion of energy
reduction bonds in February 2005, the continuation of a more
constructive regulatory environment, and the extinguishment of
PG&E Corporation's ownership in National Energy & Gas
Transmission, Inc.   Moody's also stated that its
rating also considers numerous unresolved state and federal
regulatory issues, as well as related litigation, and noted that
there is some uncertainty concerning the regulatory framework that
would result if the state reintroduces some form of direct
access.
Moody's also stated that its rating of the Utility's
senior secured debt is the same as its issuer rating because
Moody's anticipates that all of this debt will shortly become
unsecured noting that the terms of the indenture for the First
Mortgage Bonds provides for the release of collateral securing the
debt after certain conditions are satisfied.
The First Mortgage Bonds, which were issued in March 2004, are
secured by a lien on substantially all of the Utility's real
property and certain tangible personal property related to the
Utility's facilities. The indenture provides that the lien may be
released on a date chosen by the Utility and specified in an order
delivered by the Utility to the trustee (the "release
date"), along with other documentation, including:
Written evidence that the ratings assigned by Moody's and
Standard & Poor's Rating Service (S&P) on
the     Utility's long-term unsecured debt
obligations immediately after the release date would be at least
equal to the initial ratings on the First Mortgage Bonds (BBB by
S&P and Baa2 by Moody's), and
An officer's certificate stating that the aggregate
principal amount of debt secured by a lien on any principal
property that would be outstanding immediately after the release
date, excluding debt secured by specified liens, would not exceed
5% of the Utility's tangible net assets, as defined in the
indenture.
As previously disclosed, on February 16, 2005, S&P upgraded
its corporate credit rating on the Utility to BBB from BBB- and
affirmed its BBB senior secured rating on the Utility's First
Mortgage Bonds.  In order to meet the condition specified in
the indenture, the Utility would need to obtain from S&P and
Moody's written confirmation before the anticipated release date
that the Utility's long-term unsecured debt obligations immediately
after the release date would be at least equal to BBB (S&P) and
Baa2 (Moody's).   If the lien is released, there
will be no collateral securing the First Mortgage Bonds and the
bonds will become the Utility's unsecured general obligations
ranking
pari passu
with the Utility's other unsecured
debt.  Under the indenture, the Utility has pledged that after
the release date, it will not incur secured debt except for (i)
debt secured by specified liens, and (ii) secured debt in an amount
not exceeding 10% of the Utility's tangible net assets, as defined
in the indenture.
As previously disclosed, the settlement agreement entered into
among PG&E Corporation, the Utility and the California Public
Utilities Commission (CPUC) to resolve the Utility's Chapter
11 proceeding (Settlement Agreement), provides that the CPUC will
set the Utility's capital structure and authorized return on
equity (ROE) in the Utility's annual cost of capital
proceedings in its usual manner;
­provided that
, the
authorized ROE shall not be less than 11.22% per year and the
authorized equity ratio for ratemaking purposes shall not be less
than 52% until the Utility's long-term issuer credit ratings
are at least A- from S&P or A3 from Moody's.
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, Chief Financial Officer and Controller
PACIFIC GAS AND ELECTRIC COMPANY
By:
Dinyar B. Mistry
Dinyar B. Mistry
Vice President and Controller
Dated:  March 4, 2005