<html>
<head>
<title>12-09-03 Form 8-K</title>
</head>
<body>
<div>
<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td colspan="4" valign="top">
<p align="center">SECURITIES AND EXCHANGE COMMISSION</p>
</td>
</tr>

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

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

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

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

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

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

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

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

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

<tr>
<td colspan="4" valign="top">
<p align="center">Date of Report: December 9, 2003</p>
</td>
</tr>

<tr>
<td colspan="4" 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;<br />

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

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

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

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

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

<p align="center">1-2348</p>
</td>
<td valign="top">
<p align="center">PG&amp;E Corporation</p>

<p align="center">Pacific Gas and<br />
 Electric Company</p>
</td>
<td valign="top">
<p align="center">California</p>

<p align="center">California</p>
</td>
<td valign="top">
<p align="center">94-3234914</p>

<p align="center">94-0742640</p>

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

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

<tr>
<td colspan="2" valign="top">
<p align="center">Pacific Gas and Electric Company<br />
 77 Beale Street, P. O. Box 770000<br />
 San Francisco, California&nbsp;&nbsp;94177</p>
</td>
<td colspan="2" valign="top">
<p align="center">PG&amp;E Corporation<br />
 One Market, Spear Tower, Suite 2400<br />
 San Francisco, California&nbsp;&nbsp;94105</p>
</td>
</tr>

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

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

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

<tr>
<td colspan="2" valign="top">
<p align="center">Pacific Gas and Electric Company<br />
 (415) 973-7000</p>
</td>
<td colspan="2" valign="top">
<p align="center">PG&amp;E Corporation<br />
 (415) 267-7000</p>
</td>
</tr>

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

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

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

<br clear="all" />


<hr>


<div>

<p>Item 5.&nbsp; Other Events</p>

<p>A.&nbsp;&nbsp;Additional Proposed Decisions Regarding Proposed
Settlement Agreement</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December 4, 2003, three members of the California Public Utilities
Commission (CPUC) each issued an alternate proposed decision for
consideration by the CPUC regarding the proposed settlement
agreement (Settlement Agreement) announced in June 2003 by PG&amp;E
Corporation, its subsidiary, Pacific Gas and Electric Company
(Utility), and the CPUC staff to jointly support a new plan of
reorganization of the Utility (Settlement Plan).&nbsp; The
Settlement Plan has been submitted for confirmation to the U.S.
Bankruptcy Court for the Northern District of California
(Bankruptcy Court) where the Utility&rsquo;s proceeding commenced
under Chapter 11 of the U.S. Bankruptcy Code is pending.&nbsp;</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
alternate proposed decisions (referred to as the Wood Alternate,
the Brown Alternate, and the Lynch Alternate, respectively) are in
addition to the proposed decision issued by a CPUC administrative
law judge (the ALJ&rsquo;s proposed decision) and the two alternate
proposed decisions that were issued by the President of the CPUC as
alternates to the ALJ&rsquo;s proposed decision (Peevey Alternate 1
and Peevey Alternate 2) on November 18, 2003.&nbsp; (The
ALJ&rsquo;s proposed decision and the Peevey Alternates 1 and 2
were described in a Form 8-K filed by PG&amp;E Corporation and the
Utility with the Securities and Exchange Commission on November 20,
2003.)&nbsp; Comments by all parties on the Brown, Lynch and Wood
Alternates are due by December 11, 2003.&nbsp; To become effective,
among other conditions, the Settlement Agreement must be entered
into by the CPUC by December 31, 2003.&nbsp; The CPUC is scheduled
to consider all six proposed decisions at its regular meeting to be
held on December 18, 2003.&nbsp; The CPUC may accept, reject or
modify any proposed or alternate decision.&nbsp; PG&amp;E
Corporation and the Utility are unable to predict the outcome of
this matter.</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
of the Wood, Brown and Lynch Alternates would modify the key
economic, financial and legal provisions of the Settlement
Agreement.&nbsp; Among other proposed modifications, each
would:</p>

<div align="center">
<table border="0" cellspacing="0" cellpadding="0" width="555">
<tr>
<td valign="top">
<ul>
  <li>
    <p>&nbsp;</p>
  </li>
</ul>
</td>
<td valign="top">
<p>Require the Utility and PG&amp;E Corporation to forego or waive
recovery of amounts ranging from $400 million to $2.3 billion
otherwise recoverable under the Settlement Agreement, in addition
to the Utility&rsquo;s waiver and release of existing claims of
approximately $4.6 billion under the Settlement Agreement.</p>
</td>
</tr>

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

<tr>
<td valign="top">
<ul>
  <li>
    <p>&nbsp;</p>
  </li>
</ul>
</td>
<td valign="top">
<p>Conclude that the CPUC does not have authority to enter into a
settlement agreement that would bind itself for an unlimited period
of time.&nbsp; The Wood and Brown Alternates would find that the
CPUC can bind itself for a limited period of time, not to exceed
four years in the case of the Wood Alternate or five years in the
case of the Brown Alternate.&nbsp; As a result of this finding, the
Wood Alternate and the Brown Alternate would limit the term of the
modified settlement agreement (including the provisions regarding
enforceability and capital structure) and reduce the amortization
period of the regulatory asset provided in the alternates, to four
years under the Wood Alternate and five years under the Brown
Alternate, except that all rights that vest under the Settlement
Agreement would survive such termination.&nbsp; (The Lynch
Alternate, like the ALJ&rsquo;s proposed decision, would find that
the CPUC does not have the authority to bind itself in fixing just
and reasonable rates, but, like the ALJ&rsquo;s proposed decision,
would state that the CPUC intends that all future Commissions
should recognize and give all possible consideration and weight to
the fact that the modified settlement agreement has been approved
based upon the expectations and reasonable reliance of the parties
and the CPUC that all of its terms and conditions would remain in
effect for the full term of the agreement and would be implemented
by future Commissions.)</p>
</td>
</tr>

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

<tr>
<td valign="top">
<ul>
  <li>
    <p>&nbsp;</p>
  </li>
</ul>
</td>
<td valign="top">
<p>The Brown and Wood Alternates provide less of an immediate rate
reduction when a plan of reorganization is implemented than the
estimated amount provided under the Settlement Agreement.&nbsp; The
Brown and Wood Alternates estimate that they would provide $400
million and $230 million in immediate rate reduction, respectively,
compared to the $670 million estimate for the Settlement
Agreement.&nbsp; The Lynch Alternate would not provide any
immediate rate reduction until after the Utility has completed
recovery of Commissioner Lynch&rsquo;s estimate of the
Utility&rsquo;s net undercollection at December 31, 2003 of $1.95
billion that she predicts would allow the Utility to exit from
Chapter 11 in the first quarter of 2005.</p>
</td>
</tr>

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

<tr>
<td valign="top">
<ul>
  <li>
    <p>&nbsp;</p>
  </li>
</ul>
</td>
<td valign="top">
<p>Modify the Settlement Agreement&rsquo;s provision regarding the
mutual release of claims by the CPUC and PG&amp;E Corporation to
clarify that the CPUC&rsquo;s release of PG&amp;E Corporation does
not extend to the claims brought by the California Attorney General
and the City and County of San Francisco against PG&amp;E
Corporation under Section 17200 of the California Business and
Professions Code for unfair business practices.</p>
</td>
</tr>
</table>
</div>

<p>Further, the Brown, Wood and Lynch Alternates would:</p>

<div align="center">
<table border="0" cellspacing="0" cellpadding="0" width="559">
<tr>
<td valign="top">
<ul>
  <li>
    <p>&nbsp;&nbsp;</p>
  </li>
</ul>
</td>
<td valign="top">
<p>Like the ALJ&rsquo;s proposed decision and the Peevey Alternate
2, delete the Settlement Agreement provisions restricting the
CPUC&rsquo;s authority to restrict the ability of the boards of
directors of either the Utility or PG&amp;E Corporation to declare
and pay dividends or repurchase common stock, other than the
capital structure and stand-alone dividend conditions contained in
prior CPUC decisions authorizing the formation of PG&amp;E
Corporation.</p>
</td>
</tr>

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

<tr>
<td valign="top">
<ul>
  <li>
    <p>&nbsp;</p>
  </li>
</ul>
</td>
<td valign="top">
<p>Like the ALJ&rsquo;s proposed decision and the Peevey Alternate
2, delete the phrase &ldquo;notwithstanding any contrary state
law&rdquo; from the provisions which state that the Settlement
Agreement, the Settlement Plan, and the confirmation order would be
enforceable in accordance with federal law, notwithstanding any
contrary state law.&nbsp; Like the ALJ&rsquo;s proposed decision
and the Peevey Alternate 2, the Wood and Brown Alternates explain
that the CPUC can only enter into a settlement agreement if it is
consistent with state law, and that the phrase is therefore
irrelevant.&nbsp; The Lynch Alternate would delete these provisions
entirely.</p>
</td>
</tr>

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

<tr>
<td valign="top">
<ul>
  <li>
    <p>&nbsp;&nbsp;</p>
  </li>
</ul>
</td>
<td valign="top">
<p>Like the Peevey Alternate 2, clarify the provision committing
the CPUC to act to facilitate and maintain investment grade credit
ratings for the Utility.&nbsp; The Wood Alternate and the Brown
Alternate would clarify that this provision would be interpreted so
that the CPUC would not be obligated to guarantee such a credit
rating when there are other causes, besides the CPUC&rsquo;s
actions (e.g., the Utility&rsquo;s imprudent conduct resulting in a
disallowance), which are responsible for any threats to the
Utility&rsquo;s investment grade credit rating.&nbsp; The Lynch
Alternate would delete this provision entirely.</p>
</td>
</tr>

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

<tr>
<td valign="top">
<ul>
  <li>
    <p>&nbsp;</p>
  </li>
</ul>
</td>
<td valign="top">
<p>Like the ALJ&rsquo;s proposed decision and the Peevey Alternate
2, the Wood Alternate, the Brown Alternate and the Lynch Alternate
would require the Utility to increase its funding to support
environmental enhancement activities to $100 million over 10 years,
as compared to $70 million proposed in the Settlement
Agreement.&nbsp; The Utility would be authorized to recover the
$100 million in its retail rates without further review.&nbsp; The
Brown and Wood Alternates would require the Utility to increase its
funding to support research and investment in clean energy
technology to $30 million over five years, as compared to $15
million proposed in the Settlement Agreement.&nbsp; The funds to
support clean energy technology and investment would not be
recoverable in retail rates.</p>
</td>
</tr>
</table>
</div>

<p><u>The Brown Alternate</u>.&nbsp; In addition to the changes
discussed above, the Brown Alternate recommends that:</p>

<div align="center">
<table border="0" cellspacing="0" cellpadding="0" width="561">
<tr>
<td valign="top" width="52">
<ul>
  <li>
    <p>&nbsp;</p>
  </li>
</ul>
</td>
<td valign="top" width="505">
<p>The amortization period of the $2.21 billion regulatory asset
called for under the Settlement Agreement be shortened from nine
years to five years, with a requirement that the Utility update the
forecast of cash on hand, including any reduction for PG&amp;E
Corporation&rsquo;s bankruptcy-litigation costs discussed below, to
adjust the terms of the Settlement Agreement and resulting rates to
take into account the updated cash forecast.&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="52">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="505"></td>
</tr>

<tr>
<td valign="top" width="52">
<ul>
  <li>
    <p>&nbsp;</p>
  </li>
</ul>
</td>
<td valign="top" width="505">
<p>The Utility&rsquo;s reimbursement of PG&amp;E
Corporation&rsquo;s costs of professional fees and expenses related
to the Utility&rsquo;s Chapter 11 proceeding estimated by the Brown
Alternate to be approximately $217 million, be borne by PG&amp;E
Corporation and not be reimbursed by the Utility from ratepayers
directly or indirectly.&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="52">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="505"></td>
</tr>

<tr>
<td valign="top" width="52">
<ul>
  <li>
    <p>&nbsp;</p>
  </li>
</ul>
</td>
<td valign="top" width="505">
<p>The Utility not be permitted to recover from ratepayers $96
million in net costs the Utility incurred due to the premature
termination of a gas hedging contract entered into by the Utility,
and that the Utility be required to adjust its rates under the
Settlement Agreement in order to provide ratepayers with the
present value of the $96 million.</p>
</td>
</tr>

<tr>
<td valign="top" width="52">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="505"></td>
</tr>

<tr>
<td valign="top" width="52">
  <ul>
    <li>&nbsp;</li>
  </ul>
</td>
<td valign="top" width="505">
<p>Headroom revenue for 2003 in excess of&nbsp; $775 million be
credited to ratepayers, rather than headroom in excess of $875
million as provided for in the Settlement Agreement.</p>
</td>
</tr>
</table>
</div>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>The
Wood Alternate.</u>&nbsp; In addition to the changes discussed
above, the Wood Alternate recommends that:</p>

<div align="center">
<table border="0" cellspacing="0" cellpadding="0" width="559">
<tr>
<td valign="top">
<ul>
  <li>
    <p>&nbsp;&nbsp;</p>
  </li>
</ul>
</td>
<td valign="top">
<p>The $2.21 billion regulatory asset called for under the
Settlement Agreement be reduced to $1.2 billion and that the
amortization period be shortened from nine years to four
years.&nbsp;</p>
</td>
</tr>

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

<tr>
<td valign="top">
<ul>
  <li>
    <p>&nbsp;</p>
  </li>
</ul>
</td>
<td valign="top">
<p>PG&amp;E Corporation and the Utility bear their own litigation
expenses related to the Utility&rsquo;s Chapter 11 proceeding
(aggregating approximately $444 million), and that the Utility be
prohibited from recovering in retail rates directly or indirectly
any portion of amounts reimbursed to PG&amp;E Corporation for any
such expenses.&nbsp;</p>
</td>
</tr>

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

<tr>
<td valign="top">
<ul>
  <li>
    <p>&nbsp;</p>
  </li>
</ul>
</td>
<td valign="top">
<p>The provisions limiting the CPUC&rsquo;s ability to change the
Utility's authorized return on equity and authorized equity ratio
until the Utility achieves investment grade credit ratings would be
modified to authorize the CPUC to require PG&amp;E Corporation to
divest or deconsolidate the Utility if the CPUC obtains information
that the Utility&rsquo;s relationship with PG&amp;E Corporation is
in any manner preventing the Utility from receiving company credit
ratings of at least &ldquo;A-&ldquo; from Standard &amp;
Poor&rsquo;s or &ldquo;A3&rdquo; from Moody&rsquo;s Investors
Service (Moody&rsquo;s).</p>
</td>
</tr>
</table>
</div>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>The
Lynch Alternate</u>.&nbsp;&nbsp; The Lynch Alternate proposes an
alternative plan to allow the Utility to recover its energy crisis
undercollected costs by applying all excess revenues collected
through current retail electric rates and maintaining current rates
until the Utility&rsquo;s net undercollection as defined by the
Lynch Alternate is reduced to zero.&nbsp; The Lynch Alternate would
find that the Utility&rsquo;s net undercollected costs as of
December 31, 2003 would be $1.95 <b></b>billion compared to the
Utility&rsquo;s estimate of $3.67 billion in undercollected costs
and claims, from, among other items, disallowing bankruptcy related
costs of $444 million and $96 million of gas hedging contracts, a
different definition of headroom than used in the Settlement
Agreement for the period 2001 through 2003 resulting in a $763
million additional credit, and elimination of the return and taxes
on retained generation.&nbsp; In addition, the Lynch Alternate
proposes that the Utility would forego the payment of dividends and
contribute approximately $460 million of its earnings towards
paying down the undercollection while the current rates remain in
effect during 2004 and the first quarter of 2005.&nbsp;&nbsp; The
Lynch Alternate projects that current rates would generate
approximately $1.16 billion in headroom in 2004, allowing the
Utility to recover its entire undercollection as defined by the
Lynch Alternate, reinstate its lapsed debts, and emerge from
Chapter 11 during the first quarter of 2005.&nbsp;</p>

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

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December 8, 2003, Moody's announced that it had placed the ratings
of the Utility under review for possible upgrade.&nbsp;
Moody&rsquo;s stated: &ldquo;If the company's POR is adopted in its
entirety as proposed and there does not appear to be significant
risk of a successful challenge to key aspects of the plan, the
potential exists for the ratings of the utility to be upgraded to
investment grade.&rdquo;</p>

<hr>

<br clear="all" />


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

<tr>
<td valign="top">
<p><br />
 </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.<br>
</p>
</td>
</tr>

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

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>PG&amp;E CORPORATION<br />
<br />
 </p>
</td>
</tr>

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CHRISTOPHER P.
JOHNS</p>
</td>
</tr>

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

<p><br />
 </p>
</td>
</tr>

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

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

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>PACIFIC GAS AND ELECTRIC COMPANY<br />
<br />
 </p>
</td>
</tr>

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

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

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

<tr>
<td valign="top">
<p>Dated:&nbsp; December 9, 2003</p>
</td>
<td valign="top"></td>
</tr>
</table>
</div>
</body>
</html>
[{"type": "8-K", "sequence": "1", "filename": "final120903.htm", "description": "FORM 8-K", "secsgml_size_bytes": 25433}]
{"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": "031044953"}, "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"}}
12-09-03 Form 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report: December 9, 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)
Item 5.  Other Events
A.  Additional Proposed Decisions Regarding Proposed
Settlement Agreement
On
December 4, 2003, three members of the California Public Utilities
Commission (CPUC) each issued an alternate proposed decision for
consideration by the CPUC regarding the proposed settlement
agreement (Settlement Agreement) announced in June 2003 by PG&E
Corporation, its subsidiary, Pacific Gas and Electric Company
(Utility), and the CPUC staff to jointly support a new plan of
reorganization of the Utility (Settlement Plan).  The
Settlement Plan has been submitted for confirmation to the U.S.
Bankruptcy Court for the Northern District of California
(Bankruptcy Court) where the Utility's proceeding commenced
under Chapter 11 of the U.S. Bankruptcy Code is pending.
The
alternate proposed decisions (referred to as the Wood Alternate,
the Brown Alternate, and the Lynch Alternate, respectively) are in
addition to the proposed decision issued by a CPUC administrative
law judge (the ALJ's proposed decision) and the two alternate
proposed decisions that were issued by the President of the CPUC as
alternates to the ALJ's proposed decision (Peevey Alternate 1
and Peevey Alternate 2) on November 18, 2003.  (The
ALJ's proposed decision and the Peevey Alternates 1 and 2
were described in a Form 8-K filed by PG&E Corporation and the
Utility with the Securities and Exchange Commission on November 20,
2003.)  Comments by all parties on the Brown, Lynch and Wood
Alternates are due by December 11, 2003.  To become effective,
among other conditions, the Settlement Agreement must be entered
into by the CPUC by December 31, 2003.  The CPUC is scheduled
to consider all six proposed decisions at its regular meeting to be
held on December 18, 2003.  The CPUC may accept, reject or
modify any proposed or alternate decision.  PG&E
Corporation and the Utility are unable to predict the outcome of
this matter.
Each
of the Wood, Brown and Lynch Alternates would modify the key
economic, financial and legal provisions of the Settlement
Agreement.  Among other proposed modifications, each
would:
Require the Utility and PG&E Corporation to forego or waive
recovery of amounts ranging from $400 million to $2.3 billion
otherwise recoverable under the Settlement Agreement, in addition
to the Utility's waiver and release of existing claims of
approximately $4.6 billion under the Settlement Agreement.
Conclude that the CPUC does not have authority to enter into a
settlement agreement that would bind itself for an unlimited period
of time.  The Wood and Brown Alternates would find that the
CPUC can bind itself for a limited period of time, not to exceed
four years in the case of the Wood Alternate or five years in the
case of the Brown Alternate.  As a result of this finding, the
Wood Alternate and the Brown Alternate would limit the term of the
modified settlement agreement (including the provisions regarding
enforceability and capital structure) and reduce the amortization
period of the regulatory asset provided in the alternates, to four
years under the Wood Alternate and five years under the Brown
Alternate, except that all rights that vest under the Settlement
Agreement would survive such termination.  (The Lynch
Alternate, like the ALJ's proposed decision, would find that
the CPUC does not have the authority to bind itself in fixing just
and reasonable rates, but, like the ALJ's proposed decision,
would state that the CPUC intends that all future Commissions
should recognize and give all possible consideration and weight to
the fact that the modified settlement agreement has been approved
based upon the expectations and reasonable reliance of the parties
and the CPUC that all of its terms and conditions would remain in
effect for the full term of the agreement and would be implemented
by future Commissions.)
The Brown and Wood Alternates provide less of an immediate rate
reduction when a plan of reorganization is implemented than the
estimated amount provided under the Settlement Agreement.  The
Brown and Wood Alternates estimate that they would provide $400
million and $230 million in immediate rate reduction, respectively,
compared to the $670 million estimate for the Settlement
Agreement.  The Lynch Alternate would not provide any
immediate rate reduction until after the Utility has completed
recovery of Commissioner Lynch's estimate of the
Utility's net undercollection at December 31, 2003 of $1.95
billion that she predicts would allow the Utility to exit from
Chapter 11 in the first quarter of 2005.
Modify the Settlement Agreement's provision regarding the
mutual release of claims by the CPUC and PG&E Corporation to
clarify that the CPUC's release of PG&E Corporation does
not extend to the claims brought by the California Attorney General
and the City and County of San Francisco against PG&E
Corporation under Section 17200 of the California Business and
Professions Code for unfair business practices.
Further, the Brown, Wood and Lynch Alternates would:
Like the ALJ's proposed decision and the Peevey Alternate
2, delete the Settlement Agreement provisions restricting the
CPUC's authority to restrict the ability of the boards of
directors of either the Utility or PG&E Corporation to declare
and pay dividends or repurchase common stock, other than the
capital structure and stand-alone dividend conditions contained in
prior CPUC decisions authorizing the formation of PG&E
Corporation.
Like the ALJ's proposed decision and the Peevey Alternate
2, delete the phrase "notwithstanding any contrary state
law" from the provisions which state that the Settlement
Agreement, the Settlement Plan, and the confirmation order would be
enforceable in accordance with federal law, notwithstanding any
contrary state law.  Like the ALJ's proposed decision
and the Peevey Alternate 2, the Wood and Brown Alternates explain
that the CPUC can only enter into a settlement agreement if it is
consistent with state law, and that the phrase is therefore
irrelevant.  The Lynch Alternate would delete these provisions
entirely.
Like the Peevey Alternate 2, clarify the provision committing
the CPUC to act to facilitate and maintain investment grade credit
ratings for the Utility.  The Wood Alternate and the Brown
Alternate would clarify that this provision would be interpreted so
that the CPUC would not be obligated to guarantee such a credit
rating when there are other causes, besides the CPUC's
actions (e.g., the Utility's imprudent conduct resulting in a
disallowance), which are responsible for any threats to the
Utility's investment grade credit rating.  The Lynch
Alternate would delete this provision entirely.
Like the ALJ's proposed decision and the Peevey Alternate
2, the Wood Alternate, the Brown Alternate and the Lynch Alternate
would require the Utility to increase its funding to support
environmental enhancement activities to $100 million over 10 years,
as compared to $70 million proposed in the Settlement
Agreement.  The Utility would be authorized to recover the
$100 million in its retail rates without further review.  The
Brown and Wood Alternates would require the Utility to increase its
funding to support research and investment in clean energy
technology to $30 million over five years, as compared to $15
million proposed in the Settlement Agreement.  The funds to
support clean energy technology and investment would not be
recoverable in retail rates.
The Brown Alternate
.  In addition to the changes
discussed above, the Brown Alternate recommends that:
The amortization period of the $2.21 billion regulatory asset
called for under the Settlement Agreement be shortened from nine
years to five years, with a requirement that the Utility update the
forecast of cash on hand, including any reduction for PG&E
Corporation's bankruptcy-litigation costs discussed below, to
adjust the terms of the Settlement Agreement and resulting rates to
take into account the updated cash forecast.
The Utility's reimbursement of PG&E
Corporation's costs of professional fees and expenses related
to the Utility's Chapter 11 proceeding estimated by the Brown
Alternate to be approximately $217 million, be borne by PG&E
Corporation and not be reimbursed by the Utility from ratepayers
directly or indirectly.
The Utility not be permitted to recover from ratepayers $96
million in net costs the Utility incurred due to the premature
termination of a gas hedging contract entered into by the Utility,
and that the Utility be required to adjust its rates under the
Settlement Agreement in order to provide ratepayers with the
present value of the $96 million.
Headroom revenue for 2003 in excess of  $775 million be
credited to ratepayers, rather than headroom in excess of $875
million as provided for in the Settlement Agreement.
The
Wood Alternate.
In addition to the changes discussed
above, the Wood Alternate recommends that:
The $2.21 billion regulatory asset called for under the
Settlement Agreement be reduced to $1.2 billion and that the
amortization period be shortened from nine years to four
years.
PG&E Corporation and the Utility bear their own litigation
expenses related to the Utility's Chapter 11 proceeding
(aggregating approximately $444 million), and that the Utility be
prohibited from recovering in retail rates directly or indirectly
any portion of amounts reimbursed to PG&E Corporation for any
such expenses.
The provisions limiting the CPUC's ability to change the
Utility's authorized return on equity and authorized equity ratio
until the Utility achieves investment grade credit ratings would be
modified to authorize the CPUC to require PG&E Corporation to
divest or deconsolidate the Utility if the CPUC obtains information
that the Utility's relationship with PG&E Corporation is
in any manner preventing the Utility from receiving company credit
ratings of at least "A-" from Standard &
Poor's or "A3" from Moody's Investors
Service (Moody's).
The
Lynch Alternate
.   The Lynch Alternate proposes an
alternative plan to allow the Utility to recover its energy crisis
undercollected costs by applying all excess revenues collected
through current retail electric rates and maintaining current rates
until the Utility's net undercollection as defined by the
Lynch Alternate is reduced to zero.  The Lynch Alternate would
find that the Utility's net undercollected costs as of
December 31, 2003 would be $1.95
billion compared to the
Utility's estimate of $3.67 billion in undercollected costs
and claims, from, among other items, disallowing bankruptcy related
costs of $444 million and $96 million of gas hedging contracts, a
different definition of headroom than used in the Settlement
Agreement for the period 2001 through 2003 resulting in a $763
million additional credit, and elimination of the return and taxes
on retained generation.  In addition, the Lynch Alternate
proposes that the Utility would forego the payment of dividends and
contribute approximately $460 million of its earnings towards
paying down the undercollection while the current rates remain in
effect during 2004 and the first quarter of 2005.   The
Lynch Alternate projects that current rates would generate
approximately $1.16 billion in headroom in 2004, allowing the
Utility to recover its entire undercollection as defined by the
Lynch Alternate, reinstate its lapsed debts, and emerge from
Chapter 11 during the first quarter of 2005.
B.  Credit Rating Agency Announcement
On
December 8, 2003, Moody's announced that it had placed the ratings
of the Utility under review for possible upgrade. 
Moody's stated: "If the company's POR is adopted in its
entirety as proposed and there does not appear to be significant
risk of a successful challenge to key aspects of the plan, the
potential exists for the ratings of the utility to be upgraded to
investment grade."
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
CHRISTOPHER P.
JOHNS
Christopher P.
Johns
Senior Vice President
and Controller
PACIFIC GAS AND ELECTRIC COMPANY
DINYAR MISTRY
Dinyar Mistry
Vice President and
Controller
Dated:  December 9, 2003