<html>
<head>
<title>9-16-03 Form 8-K</title>
</head>
<body>
<div>
<table border="0" cellspacing="0" cellpadding="0" width="644">
<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><i><font size="2" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;</font></i></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><i><font size="2" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;</font></i></p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p><i><font size="2" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;</font></i></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><i><font size="2" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;</font></i></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><i><font size="2" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;</font></i></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><i><font size="2" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;</font></i></p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman">Date of
Report: September 16, 2003</font></p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p><i><font size="2" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;</font></i></p>
</td>
</tr>

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

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

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

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

<div align="center"><font size="3" face="Times New Roman"></font>
<hr size="2" width="100%" align="center" />
</div>

<p><font size="3" face="Times New Roman">Item
5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pacific Gas and Electric Company
2003 General Rate Case Proceeding</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
September 15, 2003, PG&amp;E Corporation&rsquo;s subsidiary,
Pacific Gas and Electric Company (Utility), The Utility Reform
Network, the California Public Utilities Commission&rsquo;s (CPUC)
Office of Ratepayer Advocates (ORA), Aglet Consumer Alliance, the
Modesto Irrigation District (MID), the Natural Resources Defense
Council (NRDC), and the Agricultural Energy Consumers Association
filed a joint motion with the CPUC seeking approval of a settlement
agreement these parties entered into in the Utility&rsquo;s 2003
General Rate Case (GRC) proceeding.&nbsp; (MID and NRDC joined in
designated portions of the settlement agreement only.)&nbsp; The
proposed settlement agreement also has been filed with the
CPUC.&nbsp; The parties reached agreement on all disputed issues
raised by the settling parties in this phase of the GRC, with the
exception of the Utility&rsquo;s request that the CPUC include the
costs of a pension contribution in the Utility&rsquo;s revenue
requirement&nbsp;&nbsp; The CPUC will resolve the pension
contribution issue, as well as other issues raised by non-settling
parties, based upon briefs to be submitted on September 17,
2003.&nbsp; The Utility&rsquo;s GRC revenue requirements are
subject to adjustment to reflect the CPUC&rsquo;s decision
regarding those issues not included in the settlement
agreement.&nbsp;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The settlement agreement proposes that the Utility would receive a
$236 million increase in its electric distribution revenue
requirements and a $52 million increase in its gas distribution
revenue requirements, over the current authorized amounts.&nbsp;
This compares with a $447 million increase in electric distribution
revenue requirements and a $105 million increase in gas
distribution revenue requirements requested by the Utility in its
November 2002 application.&nbsp; It is anticipated that there will
be no increase in retail customer electric rates, as the increases
provided under the proposed settlement would be offset by decreases
in other areas.&nbsp; The impact of the gas distribution settlement
on a typical residential customer&rsquo;s total gas bill would be
2.26 percent.&nbsp;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As previously disclosed, the CPUC already is considering a proposed
settlement among the Utility, ORA, and other parties that reduced
the Utility&rsquo;s 2003 generation revenue requirement from its
initial request for an increase of $149 million to $82
million.&nbsp; (This generation revenue requirement excludes fuel
expense, purchased power expense, the California Department of
Water Resources&rsquo; (DWR) revenue requirements, and nuclear
decommissioning revenue requirements.&nbsp; Recovery of fuel and
purchased power generation-related costs for 2003 was addressed in
the proceeding regarding the Utility's Energy Resource Recovery
Account.&nbsp; DWR revenue requirements are addressed in separate
proceedings.&nbsp; Nuclear decommissioning costs were addressed in
the Nuclear Decommissioning Costs Triennial Proceeding.)&nbsp; If
approved by the CPUC, the generation settlement would resolve all
generation-specific issues, but would not resolve various tax
methodology issues nor the amount of administrative and general
(A&amp;G) expenses and common plant to allocate to
generation.&nbsp; The new settlement would resolve these remaining
issues, proposing that the Utility receive an increase of $38
million for electric generation operations, compared to the $149
million increase originally requested.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
proposed settlement agreements, if approved by the CPUC, would
result in total 2003 revenue requirements for the Utility of $2,493
million for electric distribution operations, $927 million for gas
distribution operations, and $912 million for electric generation
operations.&nbsp; If the Utility prevails on the pension
contribution issue, an additional revenue requirement of
approximately $75 million would be allocated among electric
distribution, gas distribution, and electric generation
operations.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The parties have agreed that the Utility&rsquo;s next GRC will be
to determine rates for test year 2007.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the proposed settlement agreements for distribution and
generation, attrition revenue increases for 2004, 2005, and 2006
would be authorized in the 2003 GRC.&nbsp; The attrition increase
for 2004 and 2005 would be calculated as the prior year&rsquo;s
revenue requirement multiplied by the Consumer Price Index
(CPI).&nbsp; For 2006, the 2005 revenue requirement would be
multiplied by the CPI plus 1 percent to calculate the attrition
increase.&nbsp; For generation, the Utility also would receive
additional revenues to cover the costs of refueling activities at
its Diablo Canyon nuclear power plant.&nbsp; For gas and electric
distribution operations, the attrition increases would be subject
to a minimum increase of 2.0 percent and a maximum increase of 3.0
percent for 2004, a minimum increase of 2.25 percent and a maximum
increase of 3.25 percent for 2005, and a minimum increase of 3.0
percent and a maximum increase of 4.0 percent for 2006.&nbsp; For
electric generation operations, the attrition increases would be
subject to a minimum increase of 1.5 percent and a maximum increase
of 3.0 percent for 2004 and 2005, and a minimum increase of 2.5
percent and a maximum increase of 4.0 percent for 2006.&nbsp; The
parties note in the proposed settlement agreement that outcomes in
future cost of capital proceedings, in which the CPUC determines
the authorized rate of return that the Utility may earn on its
electric and gas distribution and electric generation assets, could
affect the Utility&rsquo;s revenue requirement, including the
attrition adjustments.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
parties have agreed to assume for purposes of calculating the
revenue requirement that the Utility&rsquo;s total utility A&amp;G
expenses will be reduced to $585 million from the Utility&rsquo;s
original request of approximately $736 million.&nbsp; The A&amp;G
assumed expenses would be increased if the Utility prevails on the
pension fund contribution issue.&nbsp;&nbsp;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
previously disclosed, the ORA recommended against the
Utility&rsquo;s request for higher electric distribution
depreciation rates, resulting in a $123 million difference between
the Utility&rsquo;s and the ORA&rsquo;s estimates for distribution
depreciation expenses.&nbsp; The settlement agreement provides that
the parties will agree to the ORA&rsquo;s position on calculating
electric, gas, and common plant depreciation.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The parties also agreed to assume for purposes of calculating the
revenue requirement that the Utility&rsquo;s operating and
maintenance (O&amp;M) expenses would be $392 million and $119
million for electric and gas distribution, respectively.&nbsp; Of
the amount for electric distribution, $125 million is allocated to
vegetation management expense.&nbsp; The settlement provides that
for purposes of calculating the revenue requirement&nbsp; the
Utility&rsquo;s expenses for electric and gas distribution customer
accounts and services will be approximately $201 million and $158
million, respectively.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To determine the amount of distribution rate base on which the
Utility would be entitled to earn an authorized rate of return, the
parties agreed to use recorded 2002 plant as the starting point for
test year 2003 and to allocate residual and common plant and
reserve using the allocation method presented by the Utility.&nbsp;
The parties agreed that the net weighted average capital additions
to rate base for 2003 would be $292 million for electric
distribution and $89.2 million for gas
distribution.&nbsp;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, the settlement agreement provides that the Utility will
implement two new balancing accounts--the Distribution Revenue
Adjustment Mechanism and the Utility Generation Balancing Account,
effective January 1, 2004, to ensure that the Utility recovers its
authorized electric distribution and electric generation revenue
requirements regardless of the level of sales.&nbsp; The Core Fixed
Cost Account already performs this function for gas
distribution.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
After a settlement agreement is submitted to the CPUC for approval,
there is a 45-day comment period, although the parties have
requested that this period be shortened.&nbsp; Depending on the
comments submitted, a hearing may be held regarding the
settlement.&nbsp; PG&amp;E Corporation and the Utility are unable
to predict the outcome of this matter.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The parties have requested that the CPUC issue a final decision
approving the settlement agreement and resolve all remaining issues
on or before February 5, 2004.&nbsp; Pursuant to a prior CPUC
decision, any revenue requirement change would be effective as of
January 1, 2003.</font></p>

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

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following information included in this Current Report on Form 8-K
regarding the reaffirmation of earnings guidance, is being
furnished, not filed, pursuant to Item 9 of Form
8-K.&nbsp;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PG&amp;E Corporation previously has provided guidance regarding
PG&amp;E Corporation&rsquo;s earnings per share from operations for
2003 and 2004, as furnished in a Current Report on Form 8-K dated
August 19, 2003.&nbsp; PG&amp;E Corporation reaffirms such
previously issued guidance for 2003 and 2004.&nbsp; These
statements are forward-looking statements that are subject to a
number of risks and uncertainties that could cause actual results
to differ materially from those contemplated by the forward-looking
statements.&nbsp; Some of the factors that could cause results to
differ materially include:</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="762">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">-</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">The outcome of the
Utility&rsquo;s Chapter 11 proceeding, including whether the
proposed settlement agreement becomes effective and whether the new
plan of reorganization contemplated by the proposed settlement
agreement (Settlement Plan) is implemented;</font></p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">-</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Whether the assumptions
contained in Exhibit C to the Disclosure Statement describing the
Settlement Plan are realized;</font></p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">-</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Whether the proposed
settlements in the Utility&rsquo;s 2003 GRC proceeding are approved
by the CPUC;</font></p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">-</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Unanticipated changes in
operating expenses and capital expenditures;</font></p>
</td>
</tr>

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

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

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

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">-</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Changes in market demand
and general economic and financial market conditions, including
unanticipated changes in interest or inflation rates;</font></p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">-</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">The demand for and pricing
of natural gas transportation and storage services;</font></p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">-</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">The Utility's ability to
manage the net open position over time, which can be affected by
whether various counterparties are able to meet their obligations
under their power sale agreements with the Utility or with the
DWR;</font></p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">-</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Applicable governmental
policies and legislative or regulatory actions;</font></p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">-</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Future regulatory
proceedings related to whether the Utility has complied with all
applicable rules, tariffs, and orders, and the extent to which a
finding of non-compliance could result in customer refunds,
penalties, or other non-recoverable expense;</font></p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">-</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">The outcome of pending
litigation and regulatory proceedings, including proceedings to
determine the timing and impact of the end of the retail
electricity rate freeze, the structure of post-rate freeze
ratemaking, and whether the Utility is required to refund
previously collected revenues to ratepayers;</font></p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">-</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Competition and the level
of direct access customers;</font></p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">-</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">New accounting
pronouncements, including significant changes in accounting
policies material to the Utility;</font></p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">-</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">How the CPUC administers
the capital structure, stand-alone dividend, and first priority
conditions of the holding company conditions;</font></p>
</td>
</tr>

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

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

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

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">-</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Whether PG&amp;E
Corporation is determined to be liable for any claims asserted by
PG&amp;E National Energy Group, Inc. (NEG) or its creditors in
NEG&rsquo;s bankruptcy proceeding against PG&amp;E Corporation and
the amount of any claims for which PG&amp;E Corporation is
determined to be liable.</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<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"><br clear="all" />
</font></p>

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

<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>

<table border="0" cellspacing="0" cellpadding="0" width="684">
<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;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">PG&amp;E CORPORATION<br />
</font> <i><font size="2">&nbsp;&nbsp;&nbsp;</font></i></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;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">By:&nbsp; LINDA Y.H.
CHENG</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;</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<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;</u></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;</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LINDA
Y.H. CHENG<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate
Secretary</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;</font></p>
</td>
<td 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;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">PACIFIC GAS AND ELECTRIC
COMPANY<br />
</font> <i><font size="2">&nbsp;&nbsp;&nbsp;</font></i></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;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">By:&nbsp;&nbsp;KENT M.
HARVEY</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;</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<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;</u></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;</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KENT M.
HARVEY<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Senior Vice President,
Chief Financial Officer and Treasurer</font></p>
</td>
</tr>

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

<p><font size="3" face="Times New Roman">Dated:&nbsp; September 16,
2003</font></p>
</div>
</body>
</html>
[{"type": "8-K", "sequence": "1", "filename": "final091603.htm", "description": "FORM 8-K", "secsgml_size_bytes": 34477}]
{"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": "03897470"}, "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"}}
9-16-03 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: September 16, 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.     Pacific Gas and Electric Company
2003 General Rate Case Proceeding
On
September 15, 2003, PG&E Corporation's subsidiary,
Pacific Gas and Electric Company (Utility), The Utility Reform
Network, the California Public Utilities Commission's (CPUC)
Office of Ratepayer Advocates (ORA), Aglet Consumer Alliance, the
Modesto Irrigation District (MID), the Natural Resources Defense
Council (NRDC), and the Agricultural Energy Consumers Association
filed a joint motion with the CPUC seeking approval of a settlement
agreement these parties entered into in the Utility's 2003
General Rate Case (GRC) proceeding.  (MID and NRDC joined in
designated portions of the settlement agreement only.)  The
proposed settlement agreement also has been filed with the
CPUC.  The parties reached agreement on all disputed issues
raised by the settling parties in this phase of the GRC, with the
exception of the Utility's request that the CPUC include the
costs of a pension contribution in the Utility's revenue
requirement   The CPUC will resolve the pension
contribution issue, as well as other issues raised by non-settling
parties, based upon briefs to be submitted on September 17,
2003.  The Utility's GRC revenue requirements are
subject to adjustment to reflect the CPUC's decision
regarding those issues not included in the settlement
agreement.
The settlement agreement proposes that the Utility would receive a
$236 million increase in its electric distribution revenue
requirements and a $52 million increase in its gas distribution
revenue requirements, over the current authorized amounts. 
This compares with a $447 million increase in electric distribution
revenue requirements and a $105 million increase in gas
distribution revenue requirements requested by the Utility in its
November 2002 application.  It is anticipated that there will
be no increase in retail customer electric rates, as the increases
provided under the proposed settlement would be offset by decreases
in other areas.  The impact of the gas distribution settlement
on a typical residential customer's total gas bill would be
2.26 percent.
As previously disclosed, the CPUC already is considering a proposed
settlement among the Utility, ORA, and other parties that reduced
the Utility's 2003 generation revenue requirement from its
initial request for an increase of $149 million to $82
million.  (This generation revenue requirement excludes fuel
expense, purchased power expense, the California Department of
Water Resources' (DWR) revenue requirements, and nuclear
decommissioning revenue requirements.  Recovery of fuel and
purchased power generation-related costs for 2003 was addressed in
the proceeding regarding the Utility's Energy Resource Recovery
Account.  DWR revenue requirements are addressed in separate
proceedings.  Nuclear decommissioning costs were addressed in
the Nuclear Decommissioning Costs Triennial Proceeding.)  If
approved by the CPUC, the generation settlement would resolve all
generation-specific issues, but would not resolve various tax
methodology issues nor the amount of administrative and general
(A&G) expenses and common plant to allocate to
generation.  The new settlement would resolve these remaining
issues, proposing that the Utility receive an increase of $38
million for electric generation operations, compared to the $149
million increase originally requested.
The
proposed settlement agreements, if approved by the CPUC, would
result in total 2003 revenue requirements for the Utility of $2,493
million for electric distribution operations, $927 million for gas
distribution operations, and $912 million for electric generation
operations.  If the Utility prevails on the pension
contribution issue, an additional revenue requirement of
approximately $75 million would be allocated among electric
distribution, gas distribution, and electric generation
operations.
The parties have agreed that the Utility's next GRC will be
to determine rates for test year 2007.
Under the proposed settlement agreements for distribution and
generation, attrition revenue increases for 2004, 2005, and 2006
would be authorized in the 2003 GRC.  The attrition increase
for 2004 and 2005 would be calculated as the prior year's
revenue requirement multiplied by the Consumer Price Index
(CPI).  For 2006, the 2005 revenue requirement would be
multiplied by the CPI plus 1 percent to calculate the attrition
increase.  For generation, the Utility also would receive
additional revenues to cover the costs of refueling activities at
its Diablo Canyon nuclear power plant.  For gas and electric
distribution operations, the attrition increases would be subject
to a minimum increase of 2.0 percent and a maximum increase of 3.0
percent for 2004, a minimum increase of 2.25 percent and a maximum
increase of 3.25 percent for 2005, and a minimum increase of 3.0
percent and a maximum increase of 4.0 percent for 2006.  For
electric generation operations, the attrition increases would be
subject to a minimum increase of 1.5 percent and a maximum increase
of 3.0 percent for 2004 and 2005, and a minimum increase of 2.5
percent and a maximum increase of 4.0 percent for 2006.  The
parties note in the proposed settlement agreement that outcomes in
future cost of capital proceedings, in which the CPUC determines
the authorized rate of return that the Utility may earn on its
electric and gas distribution and electric generation assets, could
affect the Utility's revenue requirement, including the
attrition adjustments.
The
parties have agreed to assume for purposes of calculating the
revenue requirement that the Utility's total utility A&G
expenses will be reduced to $585 million from the Utility's
original request of approximately $736 million.  The A&G
assumed expenses would be increased if the Utility prevails on the
pension fund contribution issue.
As
previously disclosed, the ORA recommended against the
Utility's request for higher electric distribution
depreciation rates, resulting in a $123 million difference between
the Utility's and the ORA's estimates for distribution
depreciation expenses.  The settlement agreement provides that
the parties will agree to the ORA's position on calculating
electric, gas, and common plant depreciation.
The parties also agreed to assume for purposes of calculating the
revenue requirement that the Utility's operating and
maintenance (O&M) expenses would be $392 million and $119
million for electric and gas distribution, respectively.  Of
the amount for electric distribution, $125 million is allocated to
vegetation management expense.  The settlement provides that
for purposes of calculating the revenue requirement  the
Utility's expenses for electric and gas distribution customer
accounts and services will be approximately $201 million and $158
million, respectively.
To determine the amount of distribution rate base on which the
Utility would be entitled to earn an authorized rate of return, the
parties agreed to use recorded 2002 plant as the starting point for
test year 2003 and to allocate residual and common plant and
reserve using the allocation method presented by the Utility. 
The parties agreed that the net weighted average capital additions
to rate base for 2003 would be $292 million for electric
distribution and $89.2 million for gas
distribution.
In
addition, the settlement agreement provides that the Utility will
implement two new balancing accounts--the Distribution Revenue
Adjustment Mechanism and the Utility Generation Balancing Account,
effective January 1, 2004, to ensure that the Utility recovers its
authorized electric distribution and electric generation revenue
requirements regardless of the level of sales.  The Core Fixed
Cost Account already performs this function for gas
distribution.
After a settlement agreement is submitted to the CPUC for approval,
there is a 45-day comment period, although the parties have
requested that this period be shortened.  Depending on the
comments submitted, a hearing may be held regarding the
settlement.  PG&E Corporation and the Utility are unable
to predict the outcome of this matter.
The parties have requested that the CPUC issue a final decision
approving the settlement agreement and resolve all remaining issues
on or before February 5, 2004.  Pursuant to a prior CPUC
decision, any revenue requirement change would be effective as of
January 1, 2003.
Item
9.     Regulation FD Disclosure
The
following information included in this Current Report on Form 8-K
regarding the reaffirmation of earnings guidance, is being
furnished, not filed, pursuant to Item 9 of Form
8-K.
PG&E Corporation previously has provided guidance regarding
PG&E Corporation's earnings per share from operations for
2003 and 2004, as furnished in a Current Report on Form 8-K dated
August 19, 2003.  PG&E Corporation reaffirms such
previously issued guidance for 2003 and 2004.  These
statements are forward-looking statements that are subject to a
number of risks and uncertainties that could cause actual results
to differ materially from those contemplated by the forward-looking
statements.  Some of the factors that could cause results to
differ materially include:
-
The outcome of the
Utility's Chapter 11 proceeding, including whether the
proposed settlement agreement becomes effective and whether the new
plan of reorganization contemplated by the proposed settlement
agreement (Settlement Plan) is implemented;
-
Whether the assumptions
contained in Exhibit C to the Disclosure Statement describing the
Settlement Plan are realized;
-
Whether the proposed
settlements in the Utility's 2003 GRC proceeding are approved
by the CPUC;
-
Unanticipated changes in
operating expenses and capital expenditures;
-
The level and volatility
of wholesale electricity and natural gas prices and the Utility's
ability to manage and respond to this volatility
successfully;
-
Changes in market demand
and general economic and financial market conditions, including
unanticipated changes in interest or inflation rates;
-
The demand for and pricing
of natural gas transportation and storage services;
-
The Utility's ability to
manage the net open position over time, which can be affected by
whether various counterparties are able to meet their obligations
under their power sale agreements with the Utility or with the
DWR;
-
Applicable governmental
policies and legislative or regulatory actions;
-
Future regulatory
proceedings related to whether the Utility has complied with all
applicable rules, tariffs, and orders, and the extent to which a
finding of non-compliance could result in customer refunds,
penalties, or other non-recoverable expense;
-
The outcome of pending
litigation and regulatory proceedings, including proceedings to
determine the timing and impact of the end of the retail
electricity rate freeze, the structure of post-rate freeze
ratemaking, and whether the Utility is required to refund
previously collected revenues to ratepayers;
-
Competition and the level
of direct access customers;
-
New accounting
pronouncements, including significant changes in accounting
policies material to the Utility;
-
How the CPUC administers
the capital structure, stand-alone dividend, and first priority
conditions of the holding company conditions;
-
The effect of compliance
with existing and future environmental laws, regulations, and
policies; and
-
Whether PG&E
Corporation is determined to be liable for any claims asserted by
PG&E National Energy Group, Inc. (NEG) or its creditors in
NEG's bankruptcy proceeding against PG&E Corporation and
the amount of any claims for which PG&E Corporation is
determined to be liable.
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:  LINDA Y.H.
CHENG
LINDA
Y.H. CHENG
Corporate
Secretary
PACIFIC GAS AND ELECTRIC
COMPANY
By:  KENT M.
HARVEY
KENT M.
HARVEY
Senior Vice President,
Chief Financial Officer and Treasurer
Dated:  September 16,
2003