<title>PG&amp;E&rsquo;S GRC</title>
</head>
<body link="blue" vlink="purple">
<div>
<p align="center"></p>

<table border="0" cellspacing="0" cellpadding="0" width="644">
<tr>
<td colspan="4" valign="top">
<p align="center">SECURITIES AND EXCHANGE COMMISSION</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">Washington, D.C.&nbsp; 20549</p>
</td>
</tr>

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

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

<tr>
<td colspan="4" valign="top">
<p align="center">FORM 8-K</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">CURRENT REPORT</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">Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934</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">Date of Report: January 25, 2003</p>
</td>
</tr>

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

<p align="center"></p>

<br clear="all" />


<div align="center">

<hr size="2" width="100%" align="center" />
</div>

<p></p>

<p>Item 9. Regulation FD Disclosure</p>

<p></p>

<p>Pacific Gas and Electric Company Bankruptcy</p>

<p></p>

<p>On February 19, 2003, Standard &amp; Poor&rsquo;s (S&amp;P), a
major credit rating agency, announced that it had re-affirmed its
preliminary rating evaluation, originally issued in January 2002,
of the corporate credit ratings of, and the securities proposed to
be issued by, the four companies that would result from the
implementation of the plan of reorganization (Plan) of Pacific Gas
and Electric Company (Utility) proposed by the Utility and its
parent, PG&amp;E Corporation, in the Utility&rsquo;s bankruptcy
proceeding pending in the U.S. Bankruptcy Court for the Northern
District of California (Bankruptcy Court).&nbsp; S&amp;P stated
that the approximately $8.5 billion of securities proposed to be
issued by the reorganized Utility and three limited liability
companies, as well as their corporate credit ratings, would be
capable of achieving investment grade ratings of at least BBB-.</p>

<p></p>

<p>The Plan contemplates that the assets of the Utility&rsquo;s
electric transmission, natural gas transportation and storage, and
electric generation businesses would be transferred to three new
limited liability companies: ETrans, LLC, GTrans LLC, and Electric
Generation LLC (Gen), or collectively the LLCs.&nbsp;&nbsp; The
Plan provides that allowed claims would be satisfied by cash,
long-term notes issued by the LLCs or a combination of cash and
such notes.&nbsp; Under the Plan, each of ETrans, GTrans, and Gen
would issue long-term notes to the reorganized Utility and the
Utility would then transfer the notes to certain holders of allowed
claims.&nbsp; In addition, each of the reorganized Utility, ETrans,
GTrans, and Gen would issue &ldquo;new money&rdquo; notes in
registered public offerings.&nbsp; The LLCs would transfer the
proceeds of the sale of the new money notes, less working capital
reserves, to the Utility for payment of allowed claims.&nbsp; The
Plan currently also would reinstate nearly $1.59 billion of
preferred stock and pollution control loan agreements.&nbsp;</p>

<p></p>

<p>Among other conditions precedent, before the Plan can become
effective it must be confirmed by the Bankruptcy Court; certain
transactions contemplated under the Plan must be approved by the
Federal Energy Regulatory Commission (FERC), the Nuclear Regulatory
Commission, and the Securities and Exchange Commission (SEC); and
S&amp;P and Moody's Investors Service shall have established credit
ratings for each of the securities to be issued by the reorganized
Utility and the LLCs of not less than BBB- and Baa3,
respectively.</p>

<p></p>

<p>S&amp;P noted that the assignment of definitive investment grade
ratings to the successor companies will depend on the ultimate
outcome of the Utility&rsquo;s bankruptcy proceedings and the
satisfaction of certain enumerated conditions,
including:&nbsp;&nbsp;</p>

<p></p>

<p align="left">The debt to be issued by each of the reorganized
Utility and the LLCs will be secured;</p>

<p align="left">Gen will establish and fund a debt service reserve
account and an operating reserve account;</p>

<p align="left">With certain exceptions, Gen will not issue any
debt beyond the forecasted amounts without first obtaining from
S&amp;P confirmation that the issuance of such additional debt will
not cause any investment grade ratings assigned to outstanding Gen
debt to be downgraded to speculative grade from investment
grade;</p>

<p align="left">The Bankruptcy Court will, as contemplated by the
Plan, (1) issue valid orders that override all California
legislation and regulations that are inconsistent with the Plan,
including, but not limited to, those that preclude the Utility from
transferring generation assets to third parties, (2) approve the
proposed 12-year power sales agreement (PSA) between the
reorganized Utility and Gen, (3) enforce the PSA in accordance with
its terms, and (4) approve the transfer of electric transmission,
gas transmission, and electric generation assets to the appropriate
LLC as contemplated by the Plan;</p>

<p align="left">In accordance with the Plan which prohibits the
reorganized Utility from accepting assignment of the California
Department of Water Resources (DWR) energy contracts, the
Bankruptcy Court, notwithstanding any contrary state law,
regulation or policy, will prohibit or shield the reorganized
Utility from assuming financial responsibility for the DWR
contracts;</p>

<p align="left">PG&amp;E Corporation&rsquo;s debt will be reduced
by at least $500 million before or simultaneous with the effective
date of the Plan, primarily with cash on hand;</p>

<p align="left">PG&amp;E Corporation will issue up to $700 million
of equity, the proceeds of which will be used, on or before the
effective date of the Plan, as necessary to reduce the collective
debt levels of the reorganized Utility and the LLCs by about $615
million from the debt levels originally contemplated by the Plan.
<b></b>Such equity issuance is required unless other monies -
whether resulting from lower than anticipated creditor claims,
FERC-ordered generator refunds, or other sources &ndash; are
available to reduce the debt levels of the reorganized Utility and
the LLCs; and</p>

<p align="left">Neither PG&amp;E Corporation nor the LLCs will
issue debt for the purpose of infusing capital into PG&amp;E
National Energy Group, Inc. or its subsidiaries (PG&amp;E NEG);
moreover, neither PG&amp;E Corporation nor the LLCs shall transfer,
dividend, or otherwise deploy available cash balances to PG&amp;E
NEG if such use of cash will result in the issuance of debt by
PG&amp;E Corporation or the LLCs.</p>

<p></p>

<p>In order to satisfy the conditions specified in S&amp;P&rsquo;s
preliminary rating evaluation, on February 24, 2003, the Utility
filed amendments to the Plan with the Bankruptcy Court that, among
other modifications:&nbsp;</p>

<p></p>

<ul type="disc">
<li>permit the reorganized Utility and the LLCs to issue secured
debt instead of unsecured debt,</li>

<li>permit adjustments in the amount of debt the reorganized
Utility and the LLCs would issue so that additional new money notes
could be issued if additional cash is required to satisfy allowed
claims or to deposit in escrow for disputed claims and such debt
can be issued while maintaining investment grade ratings, or so
that less debt could be issued in order to obtain investment grade
ratings or if less cash is required to satisfy allowed claims and
be deposited into escrow for disputed claims,</li>

<li>require Gen to establish a debt service reserve account and an
operating reserve account,</li>

<li>under certain circumstances, permit an increase in the amount
of cash creditors receiving cash and notes will receive,</li>

<li>permit the Utility&rsquo;s mortgage-backed pollution control
bonds to be redeemed if the reorganized Utility issues secured new
money notes, and&nbsp;&nbsp;</li>

<li>commit PG&amp;E Corporation to contribute up to $700 million in
cash to the Utility&rsquo;s capital from the issuance of equity or
from other available sources, to the extent necessary to satisfy
the cash obligations of the Utility in respect of allowed claims
and required deposits into escrow for disputed claims, or to obtain
investment grade ratings for the debt to be issued by the
reorganized Utility and the LLCs.</li>
</ul>

<p></p>

<p>&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If PG&amp;E Corporation is required to issue equity, PG&amp;E
Corporation&rsquo;s amended and restated credit agreement dated
October 18, 2002 (Credit Agreement) with loans outstanding in the
aggregate principal amount of $720 million, requires mandatory
prepayment of outstanding loans in an amount equal to the net cash
proceeds from the issuance or sale of equity by PG&amp;E
Corporation.&nbsp; In addition, PG&amp;E Corporation is generally
prohibited by the terms of the Credit Agreement from making
investments in the Utility, except as specifically permitted by the
terms of the loans or as required by applicable law or the
conditions adopted by the California Public Utilities Commission
with respect to holding companies.&nbsp; To the extent lender
consent is required to permit the transactions specified in the
S&amp;P preliminary rating evaluation to occur, PG&amp;E
Corporation intends to negotiate with its lenders.&nbsp; Absent any
required lender consent, PG&amp;E Corporation intends to seek to
refinance its indebtedness.</p>

<p></p>

<p>In addition to the amendments to the Plan, amendments to various
filings at the FERC, and possibly other regulatory agencies, will
be required in order to implement the changes to the Plan. The
Bankruptcy Court has scheduled &eth;10 days through March 27, 2003
for continuation of the confirmation trial.&nbsp; The Bankruptcy
Court is holding an additional 3 days in March and 15 days in
April, the latest being April 24, 2003, as possible additional
trial dates and has expressed hope to conclude both the evidentiary
hearings and the post-trial arguments within that time frame, if
not sooner. Scheduling matters will be discussed at a status
conference to be held on February 27, 2003.</p>

<p></p>

<p>Cautionary Statement Regarding Forward Looking Statements</p>

<p></p>

<p>The Utility also filed revised financial projections for the
reorganized Utility and the LLCs with the Bankruptcy Court that are
attached to this report as Exhibit 99.&nbsp; This report and
Exhibit 99 hereto contain forward looking statements about the
proposed Plan, projected financial information relating to the
disaggregated entities and the various assumptions underlying such
projections.&nbsp; These statements, financial projections and
underlying assumptions, are necessarily subject to various risks
and uncertainties that could cause actual results to differ
materially from those contemplated by the forward looking
statements and financial projections.&nbsp; Some of the factors
that could cause results to differ materially include:</p>

<p></p>

<ul type="disc">
<li>whether the Bankruptcy Court confirms the Plan, the alternative
proposed plan of reorganization sponsored by the CPUC and the
Official Committee of Unsecured Creditors, or some other plan of
reorganization;</li>
</ul>

<p>whether regulatory and governmental approvals required to
implement <a name="_DV_C21">a confirmed</a>&nbsp; plan are obtained
and the timing of such approvals;</p>

<p>whether there are any delays in implementation of a plan due to
litigation related to regulatory, governmental, or Bankruptcy Court
orders; and</p>

<p>future equity or debt market conditions, future interest rates,
future credit ratings, and other factors that may affect the
ability to implement either plan or affect the amount and value of
the securities proposed to be issued under either plan.</p>

<p></p>

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

<p></p>

<p>Item 7. Financial Statements, Pro Forma Financial Information,
and Exhibits</p>

<p></p>

<p>Exhibit 99 - Financial Projections&nbsp; related to proposed
Plan of Reorganization</p>

<br clear="all" />


<p></p>

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

<p align="center"></p>

<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></p>

<p></p>

<p></p>

<table border="0" cellspacing="0" cellpadding="0" width="649">
<tr>
<td valign="top"></td>
<td valign="top">
<p>PG&amp;E CORPORATION<br />
 </p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>By: CHRISTOPHER P. JOHNS</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>CHRISTOPHER P. JOHNS<br />
 Senior Vice President and Controller<br />
<br />
 </p>
</td>
</tr>

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

<p></p>

<table border="0" cellspacing="0" cellpadding="0" width="649">
<tr>
<td valign="top"></td>
<td valign="top">
<p>PACIFIC GAS AND ELECTRIC COMPANY<br />
 </p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>By: DINYAR B. MISTRY</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>DINYAR B.MISTRY</p>

<p>Vice President and Controller</p>

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

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

<p></p>

<p>Date:&nbsp; February 25, 2003</p>

<p></p>

<p></p>

<p></p>
</div>
</body>
</html>
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{"company-data": {"conformed-name": "PG&E CORP", "cik": "0001004980", "assigned-sic": "4931", "irs-number": "943234914", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-12609", "film-number": "03579783"}, "business-address": {"street1": "ONE MARKET SPEAR TOWER", "street2": "SUITE 2400", "city": "SAN FRANCISCO", "state": "CA", "zip": "94105", "phone": "4152677000"}, "mail-address": {"street1": "ONE MARKET SPEAR TOWER", "street2": "SUITE 2400", "city": "SAN FRANCISCO", "state": "CA", "zip": "94105"}, "former-company": {"former-conformed-name": "PG&E PARENT CO INC", "date-changed": "19951214"}}
PG&E'S GRC
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: January 25, 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 9. Regulation FD Disclosure
Pacific Gas and Electric Company Bankruptcy
On February 19, 2003, Standard & Poor's (S&P), a
major credit rating agency, announced that it had re-affirmed its
preliminary rating evaluation, originally issued in January 2002,
of the corporate credit ratings of, and the securities proposed to
be issued by, the four companies that would result from the
implementation of the plan of reorganization (Plan) of Pacific Gas
and Electric Company (Utility) proposed by the Utility and its
parent, PG&E Corporation, in the Utility's bankruptcy
proceeding pending in the U.S. Bankruptcy Court for the Northern
District of California (Bankruptcy Court).  S&P stated
that the approximately $8.5 billion of securities proposed to be
issued by the reorganized Utility and three limited liability
companies, as well as their corporate credit ratings, would be
capable of achieving investment grade ratings of at least BBB-.
The Plan contemplates that the assets of the Utility's
electric transmission, natural gas transportation and storage, and
electric generation businesses would be transferred to three new
limited liability companies: ETrans, LLC, GTrans LLC, and Electric
Generation LLC (Gen), or collectively the LLCs.   The
Plan provides that allowed claims would be satisfied by cash,
long-term notes issued by the LLCs or a combination of cash and
such notes.  Under the Plan, each of ETrans, GTrans, and Gen
would issue long-term notes to the reorganized Utility and the
Utility would then transfer the notes to certain holders of allowed
claims.  In addition, each of the reorganized Utility, ETrans,
GTrans, and Gen would issue "new money" notes in
registered public offerings.  The LLCs would transfer the
proceeds of the sale of the new money notes, less working capital
reserves, to the Utility for payment of allowed claims.  The
Plan currently also would reinstate nearly $1.59 billion of
preferred stock and pollution control loan agreements.
Among other conditions precedent, before the Plan can become
effective it must be confirmed by the Bankruptcy Court; certain
transactions contemplated under the Plan must be approved by the
Federal Energy Regulatory Commission (FERC), the Nuclear Regulatory
Commission, and the Securities and Exchange Commission (SEC); and
S&P and Moody's Investors Service shall have established credit
ratings for each of the securities to be issued by the reorganized
Utility and the LLCs of not less than BBB- and Baa3,
respectively.
S&P noted that the assignment of definitive investment grade
ratings to the successor companies will depend on the ultimate
outcome of the Utility's bankruptcy proceedings and the
satisfaction of certain enumerated conditions,
including:
The debt to be issued by each of the reorganized
Utility and the LLCs will be secured;
Gen will establish and fund a debt service reserve
account and an operating reserve account;
With certain exceptions, Gen will not issue any
debt beyond the forecasted amounts without first obtaining from
S&P confirmation that the issuance of such additional debt will
not cause any investment grade ratings assigned to outstanding Gen
debt to be downgraded to speculative grade from investment
grade;
The Bankruptcy Court will, as contemplated by the
Plan, (1) issue valid orders that override all California
legislation and regulations that are inconsistent with the Plan,
including, but not limited to, those that preclude the Utility from
transferring generation assets to third parties, (2) approve the
proposed 12-year power sales agreement (PSA) between the
reorganized Utility and Gen, (3) enforce the PSA in accordance with
its terms, and (4) approve the transfer of electric transmission,
gas transmission, and electric generation assets to the appropriate
LLC as contemplated by the Plan;
In accordance with the Plan which prohibits the
reorganized Utility from accepting assignment of the California
Department of Water Resources (DWR) energy contracts, the
Bankruptcy Court, notwithstanding any contrary state law,
regulation or policy, will prohibit or shield the reorganized
Utility from assuming financial responsibility for the DWR
contracts;
PG&E Corporation's debt will be reduced
by at least $500 million before or simultaneous with the effective
date of the Plan, primarily with cash on hand;
PG&E Corporation will issue up to $700 million
of equity, the proceeds of which will be used, on or before the
effective date of the Plan, as necessary to reduce the collective
debt levels of the reorganized Utility and the LLCs by about $615
million from the debt levels originally contemplated by the Plan.
Such equity issuance is required unless other monies -
whether resulting from lower than anticipated creditor claims,
FERC-ordered generator refunds, or other sources – are
available to reduce the debt levels of the reorganized Utility and
the LLCs; and
Neither PG&E Corporation nor the LLCs will
issue debt for the purpose of infusing capital into PG&E
National Energy Group, Inc. or its subsidiaries (PG&E NEG);
moreover, neither PG&E Corporation nor the LLCs shall transfer,
dividend, or otherwise deploy available cash balances to PG&E
NEG if such use of cash will result in the issuance of debt by
PG&E Corporation or the LLCs.
In order to satisfy the conditions specified in S&P's
preliminary rating evaluation, on February 24, 2003, the Utility
filed amendments to the Plan with the Bankruptcy Court that, among
other modifications:
permit the reorganized Utility and the LLCs to issue secured
debt instead of unsecured debt,
permit adjustments in the amount of debt the reorganized
Utility and the LLCs would issue so that additional new money notes
could be issued if additional cash is required to satisfy allowed
claims or to deposit in escrow for disputed claims and such debt
can be issued while maintaining investment grade ratings, or so
that less debt could be issued in order to obtain investment grade
ratings or if less cash is required to satisfy allowed claims and
be deposited into escrow for disputed claims,
require Gen to establish a debt service reserve account and an
operating reserve account,
under certain circumstances, permit an increase in the amount
of cash creditors receiving cash and notes will receive,
permit the Utility's mortgage-backed pollution control
bonds to be redeemed if the reorganized Utility issues secured new
money notes, and
commit PG&E Corporation to contribute up to $700 million in
cash to the Utility's capital from the issuance of equity or
from other available sources, to the extent necessary to satisfy
the cash obligations of the Utility in respect of allowed claims
and required deposits into escrow for disputed claims, or to obtain
investment grade ratings for the debt to be issued by the
reorganized Utility and the LLCs.
If PG&E Corporation is required to issue equity, PG&E
Corporation's amended and restated credit agreement dated
October 18, 2002 (Credit Agreement) with loans outstanding in the
aggregate principal amount of $720 million, requires mandatory
prepayment of outstanding loans in an amount equal to the net cash
proceeds from the issuance or sale of equity by PG&E
Corporation.  In addition, PG&E Corporation is generally
prohibited by the terms of the Credit Agreement from making
investments in the Utility, except as specifically permitted by the
terms of the loans or as required by applicable law or the
conditions adopted by the California Public Utilities Commission
with respect to holding companies.  To the extent lender
consent is required to permit the transactions specified in the
S&P preliminary rating evaluation to occur, PG&E
Corporation intends to negotiate with its lenders.  Absent any
required lender consent, PG&E Corporation intends to seek to
refinance its indebtedness.
In addition to the amendments to the Plan, amendments to various
filings at the FERC, and possibly other regulatory agencies, will
be required in order to implement the changes to the Plan. The
Bankruptcy Court has scheduled ð10 days through March 27, 2003
for continuation of the confirmation trial.  The Bankruptcy
Court is holding an additional 3 days in March and 15 days in
April, the latest being April 24, 2003, as possible additional
trial dates and has expressed hope to conclude both the evidentiary
hearings and the post-trial arguments within that time frame, if
not sooner. Scheduling matters will be discussed at a status
conference to be held on February 27, 2003.
Cautionary Statement Regarding Forward Looking Statements
The Utility also filed revised financial projections for the
reorganized Utility and the LLCs with the Bankruptcy Court that are
attached to this report as Exhibit 99.  This report and
Exhibit 99 hereto contain forward looking statements about the
proposed Plan, projected financial information relating to the
disaggregated entities and the various assumptions underlying such
projections.  These statements, financial projections and
underlying assumptions, are necessarily subject to various risks
and uncertainties that could cause actual results to differ
materially from those contemplated by the forward looking
statements and financial projections.  Some of the factors
that could cause results to differ materially include:
whether the Bankruptcy Court confirms the Plan, the alternative
proposed plan of reorganization sponsored by the CPUC and the
Official Committee of Unsecured Creditors, or some other plan of
reorganization;
whether regulatory and governmental approvals required to
implement
a confirmed
plan are obtained
and the timing of such approvals;
whether there are any delays in implementation of a plan due to
litigation related to regulatory, governmental, or Bankruptcy Court
orders; and
future equity or debt market conditions, future interest rates,
future credit ratings, and other factors that may affect the
ability to implement either plan or affect the amount and value of
the securities proposed to be issued under either plan.
In particular, the financial projections, attached as Exhibit
99, have been prepared based upon certain assumptions that PG&E
Corporation and the Utility believes to be reasonable under the
circumstances, taking into account the purpose for which they were
prepared.  However, the financial projections were not
prepared with a view toward compliance with the published
guidelines of the SEC or the American Institute of Certified Public
Accountants regarding projections or forecasts.  In addition,
the financial projections have not been examined or compiled by the
independent accountants of the Utility or PG&E
Corporation.  Neither the Utility nor PG&E Corporation
makes any representation as to the accuracy of the projections or
the ability of the disaggregated entities to achieve the projected
results.  Many of the assumptions on which the projections are
based are subject to significant uncertainties.  Inevitably,
some assumptions will not materialize and unanticipated events and
circumstances may affect the actual financial results. 
Therefore, the actual results achieved may vary from the projected
results and the variations may be material.
Item 7. Financial Statements, Pro Forma Financial Information,
and Exhibits
Exhibit 99 - Financial Projections  related to proposed
Plan of Reorganization
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrants have duly caused this report to be signed on
their behalf by the undersigned thereunto duly authorized.
PG&E CORPORATION
By: CHRISTOPHER P. JOHNS
CHRISTOPHER P. JOHNS
Senior Vice President and Controller
PACIFIC GAS AND ELECTRIC COMPANY
By: DINYAR B. MISTRY
DINYAR B.MISTRY
Vice President and Controller
Date:  February 25, 2003