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

<p align="center">Washington, D.C.&nbsp; 20549<br />
<br />
</p>

<p align="center">FORM 8-K<br />
</p>

<p align="center">CURRENT REPORT<br />
</p>

<p align="center">Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934<br />
</p>

<p align="center">Date of Report:&nbsp; February 27, 2002<br />
</p>

<table border="0" cellspacing="0" cellpadding="0" width="651">
<tr>
<td>
<p>&nbsp;</p>
</td>
<td valign="top">
<p align="center"><br />
 Commission<br />
 File<br />
 Number</p>
</td>
<td colspan="2" valign="top">
<p align="center">Exact Name of<br />
 Registrant<br />
 as specified in<br />
 its charter</p>
</td>
<td colspan="2" valign="top">
<p align="center"><br />
 State or other<br />
 Jurisdiction of<br />
 Incorporation</p>
</td>
<td colspan="2" valign="top">
<p align="center"><br />
 IRS Employer<br />
 &nbsp; Identification<br />
 Number</p>
</td>
</tr>

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

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

<p align="center">1-2348</p>
</td>
<td colspan="2" valign="top">
<p align="center">PG&amp;E Corporation</p>

<p align="center">Pacific Gas and<br />
 Electric Company</p>
</td>
<td colspan="2" valign="top">
<p align="center">California</p>

<p align="center">California</p>
</td>
<td colspan="2" valign="top">
<p align="center">94-3234914</p>

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

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

<tr>
<td colspan="3" 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"></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>
<td>
<p>&nbsp;</p>
</td>
</tr>
</table>

<p align="center">(Address of principal executive offices) (Zip
Code)</p>

<table border="0" cellspacing="0" cellpadding="0" width="643">
<tr>
<td valign="top">
<p align="center">Pacific Gas and Electric Company<br />
 (415) 973-7000</p>
</td>
<td valign="top"></td>
<td valign="top">
<p align="center">PG&amp;E Corporation<br />
 (415) 267-7000</p>
</td>
</tr>
</table>

<p align="center">(Registrant's telephone number, including area
code)</p>

<div></div>

<p>Item 5. Other Events<br />
</p>

<p>A. Pacific Gas and Electric Company Bankruptcy<br />
</p>

<p>On February 13, 2002, the California Public Utilities Commission
(CPUC) submitted a term sheet to the U.S. Bankruptcy Court for the
Northern District of California (Bankruptcy Court) describing the
CPUC&rsquo;s proposed alternative plan of reorganization for
Pacific Gas and Electric Company (Utility). The Bankruptcy Court
had permitted the CPUC to file a term sheet in order to determine
if the CPUC should be allowed to formally file a proposed plan as a
potential alternative to the proposed plan of reorganization filed
by PG&amp;E Corporation and the Utility on September 20, 2001, as
amended on December 19, 2001 and February 4, 2002 (Plan).&nbsp; The
Bankruptcy Court indicated that the CPUC's term sheet must
demonstrate that the proposed alternative plan would be clearly
credible and capable of being confirmed.&nbsp; On February 20,
2002, PG&amp;E Corporation and the Utility filed a response to the
CPUC&rsquo;s term sheet stating that the CPUC had not met this
burden.&nbsp; Among other comments, PG&amp;E Corporation and the
Utility noted that the proposed plan:<br />
</p>

<ul type="disc">
<li>overstates the amount of available cash by more than $2 billion
and understates the amount of claims that must be resolved by over
$2.5 billion, for a net shortfall of $4.5 billion,&nbsp;<br />
 </li>

<li>deprives the Utility of adequate funds for capital investments
needed to carry on its utility functions,<br />
 </li>

<li>deprives the Utility of a return on its equity capital during
the period before the&nbsp; proposed effective date and immediately
thereafter,<br />
 </li>
</ul>

<ul type="disc">
<li>would not allow the Utility to return to investment grade
status and thus would adversely impact the ability of the Utility
to resume its power procurement function, and<br />
 </li>

<li>would impair the rights of a significant amount of creditors
and equity holders, which could lead those who are disadvantaged to
pursue protracted litigation that could delay the resolution of the
case.<br />
 </li>
</ul>

<p>Pursuant to the Bankruptcy Court&rsquo;s February 7, 2002
decision, on February 21, 2002, PG&amp;E Corporation and the
Utility filed with the Bankruptcy Court a statement indicating that
they intend to amend the Plan and disclosure statement to (1)
eliminate express preemption provisions so they can proceed to a
confirmation hearing where they intend to show that implied
preemption of specified statutes is available to confirm the Plan,
and (2) state with specificity the facts demonstrating that the
State of California (&ldquo;State&rdquo;) and the CPUC have waived
their sovereign immunity, and, in the event the Bankruptcy Court
finds that such immunity has been waived, to provide for
declaratory and injunctive relief against the State and the
CPUC.&nbsp; If the Bankruptcy Court determines that such sovereign
immunity has not been waived, the Bankruptcy Court indicated in its
February 7, 2002 decision that it would still be able to enforce
its confirmation order under certain circumstances.&nbsp; PG&amp;E
Corporation and the Utility also stated that they intend to seek an
expedited interlocutory appeal of an order denying approval of the
disclosure statement on the grounds that the Bankruptcy Court erred
in its February 7, 2002 decision finding that express preemption is
not applicable to the Plan.&nbsp; PG&amp;E Corporation and the
Utility also stated that, upon approval of the amended disclosure
statement, they intend to proceed with the solicitation of consents
and confirmation of the amended Plan while the interlocutory appeal
is pending.&nbsp; (For further information regarding the Bankruptcy
Court&rsquo;s February 7, 2002 decision, see the Current Report on
Form 8-K filed by PG&amp;E Corporation and the Utility with the
Securities and Exchange Commission on February 13, 2002.)<br />
</p>

<p>Finally, on February 26, 2002, the Utility filed its monthly
operating report for the month ended December 31, 2001, with the
Bankruptcy Court. The Utility's monthly operating report includes
an unaudited income statement for the month and an unaudited
balance sheet dated as of the end of the month. These unaudited
financial statements are attached as Exhibit 99.1 to this report.
Although not included in Exhibit 99.1, the monthly operating report
also includes a statement of receipts and disbursements, as well as
other information. The preliminary financial statements were
prepared using certain assumptions and estimates that are subject
to revision. Any adjustments for these estimates (based upon
changes in facts and circumstances, further analysis, and other
factors) will be reflected in the financial statements in the
period during which such adjustments are made. These adjustments
could have a material impact on reported results in the
future.<br />
</p>

<p>B.&nbsp; 2001 Attrition Rate Adjustment<br />
</p>

<p>On February 21, 2002, the CPUC approved the Utility&rsquo;s 2001
attrition rate adjustment request to increase electric distribution
revenues by approximately $151 million, effective January 1,
2001.&nbsp; The 2001 capital-related portion of the increase will
be subject to a true-up based on the Utility&rsquo;s actual 2001
capital costs. The Utility did not request an increase in gas
distribution revenues.&nbsp; As the Utility's electric rates have
been frozen in 2001, the increase in distribution-related revenues
will be offset by a reduction in electric generation-related
revenues in the same amount. Therefore, the adjustment will have no
material impact on 2001 earnings.<br />
</p>

<p>C. Allocation of California Department of Water Resources&rsquo;
Revenue Requirements<br />
</p>

<p>On February 21, 2002, the CPUC approved the California
Department of Water Resources&rsquo; (DWR) state-wide revenue
requirement of $9.045 billion for the two-year period ending
December 31, 2002, which amount reflects an approximate $958
million reduction in the DWR&rsquo;s previous revenue requirement
request of $10.03 billion. The revenue requirement represents the
DWR&rsquo;s total expected expenditures less anticipated proceeds
from the DWR&rsquo;s external financings. The CPUC allocated this
revenue requirement among the Utility and the other two California
investor-owned utilities.&nbsp; The CPUC decision allocates 49.8%
of the adopted DWR revenue requirement, or about $4.5 billion, to
the Utility for the 2001-2002 period. The allocations are subject
to true-up adjustments based on the actual amount of power
purchased by the DWR for the respective utility&rsquo;s customers
during the 2001-2002 period.&nbsp; PG&amp;E Corporation and the
Utility are unable to predict whether future true-ups would have a
material impact on their financial condition or results of
operation.<br />
 </p>

<p>The Utility intends to file an application for rehearing of the
decision by March 4, 2002.<br />
</p>

<p>D.&nbsp; PG&amp;E National Energy Group Synthetic Leases<br />
 </p>

<p>PG&amp;E Corporation has previously disclosed that its
subsidiary, PG&amp;E National Energy Group, Inc (PG&amp;E NEG), has
used &ldquo;synthetic leases&rdquo; in connection with some of its
power plant projects and turbine acquisition commitments.&nbsp; A
synthetic lease is a form of lease financing that qualifies for
operating lease accounting treatment and, under generally accepted
accounting principles (GAAP), is kept &ldquo;off balance
sheet.&rdquo; &nbsp; This financial structure was used on three
generating-related projects that completed development in 1999 and
2000 (Lake Road, La Paloma, and Harquahala) and for financing the
acquisition of turbines for future development projects through two
master turbine trusts.&nbsp;<br />
</p>

<p>The synthetic leases related to the Lake Road and La Paloma
generating projects were entered into in August 1999 and March
2000, respectively. The synthetic leases relating to the Harqhahala
generating project and the turbine acquisitions, entered into in
July 2000 and September 2000, respectively, were terminated during
2001.<br />
</p>

<p>Under accounting rules, the equity investors in a synthetic
lease must maintain at least a 3% ownership interest throughout the
life of the lease.&nbsp; PG&amp;E NEG&rsquo;s synthetic lease
documents provide for the equity investors to fund 3% of project
costs.&nbsp; There is a provision in the lease documents for the
lenders and investors to fund and be paid interest, yield and
fees.&nbsp; Under current GAAP rules, the payment of any yield and
fees to the investors during construction is required to be treated
as a return of capital rather than a return on capital.<br />
</p>

<p>The investors in PG&amp;E NEG&rsquo;s synthetic leases received
certain payments during construction of the associated projects.
These payments have been deemed to reduce the investors&rsquo;
equity ownership in the associated projects to between 2.59% and
2.93%, below the required 3% level.&nbsp; Accordingly, these
synthetic leases do not qualify for off balance sheet
treatment.<br />
</p>

<p>PG&amp;E Corporation will revise its consolidated financial
statements for the years ended December 31, 2000 and 1999, and for
the interim periods ended March 31, June 30, and September 30,
2001, to reflect the assets and liabilities associated with these
synthetic leases.<br />
</p>

<p>The revision is not expected to have a material impact on
PG&amp;E Corporation&rsquo;s earnings, equity, or debt covenant
compliance for such periods.<br />
</p>

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

<p>Exhibit 99.1 - Pacific Gas and Electric Company Income Statement
for the month ended December 31, 2001, and Balance Sheet dated
December 31, 2001.</p>

<div></div>

<p><br />
</p>

<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;</p>
</td>
<td valign="top">
<p>SIGNATURE</p>
</td>
</tr>
</table>

<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>

<table border="0" cellspacing="0" cellpadding="0" width="649">
<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;</p>
</td>
<td valign="top">
<p>PG&amp;E CORPORATION</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;</p>
</td>
<td valign="top">
<p>By:&nbsp;&nbsp;CHRISTOPHER P. JOHNS</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;</p>
</td>
<td valign="top">
<p>
&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></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;</p>
</td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; CHRISTOPHER P. JOHNS<br />
 &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;Senior Vice President and
Controller</p>
</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;</p>
</td>
<td valign="top">
<p>PACIFIC GAS AND ELECTRIC COMPANY</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;</p>
</td>
<td valign="top">
<p>By:&nbsp;&nbsp;DINYAR B. MISTRY</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;</p>
</td>
<td valign="top">
<p>&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;&nbsp;</u></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;</p>
</td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DINYAR B. MISTRY<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vice President and Controller</p>
</td>
</tr>
</table>

<p>Dated:&nbsp; February 27, 2002</p>
</div>
</body>
</html>
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{"company-data": {"conformed-name": "PACIFIC GAS & ELECTRIC CO", "cik": "0000075488", "assigned-sic": "4931", "irs-number": "940742640", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-02348", "film-number": "02560934"}, "business-address": {"street1": "77 BEALE ST", "street2": "P O BOX 770000", "city": "SAN FRANCISCO", "state": "CA", "zip": "94177", "phone": "4152677000"}, "mail-address": {"street1": "77 BEALE STREET", "street2": "P O BOX 770000", "city": "SAN FRANCISCO", "state": "CA", "zip": "94177"}}
PG&E'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:  February 27, 2002
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. Pacific Gas and Electric Company Bankruptcy
On February 13, 2002, the California Public Utilities Commission
(CPUC) submitted a term sheet to the U.S. Bankruptcy Court for the
Northern District of California (Bankruptcy Court) describing the
CPUC's proposed alternative plan of reorganization for
Pacific Gas and Electric Company (Utility). The Bankruptcy Court
had permitted the CPUC to file a term sheet in order to determine
if the CPUC should be allowed to formally file a proposed plan as a
potential alternative to the proposed plan of reorganization filed
by PG&E Corporation and the Utility on September 20, 2001, as
amended on December 19, 2001 and February 4, 2002 (Plan).  The
Bankruptcy Court indicated that the CPUC's term sheet must
demonstrate that the proposed alternative plan would be clearly
credible and capable of being confirmed.  On February 20,
2002, PG&E Corporation and the Utility filed a response to the
CPUC's term sheet stating that the CPUC had not met this
burden.  Among other comments, PG&E Corporation and the
Utility noted that the proposed plan:
overstates the amount of available cash by more than $2 billion
and understates the amount of claims that must be resolved by over
$2.5 billion, for a net shortfall of $4.5 billion,
deprives the Utility of adequate funds for capital investments
needed to carry on its utility functions,
deprives the Utility of a return on its equity capital during
the period before the  proposed effective date and immediately
thereafter,
would not allow the Utility to return to investment grade
status and thus would adversely impact the ability of the Utility
to resume its power procurement function, and
would impair the rights of a significant amount of creditors
and equity holders, which could lead those who are disadvantaged to
pursue protracted litigation that could delay the resolution of the
case.
Pursuant to the Bankruptcy Court's February 7, 2002
decision, on February 21, 2002, PG&E Corporation and the
Utility filed with the Bankruptcy Court a statement indicating that
they intend to amend the Plan and disclosure statement to (1)
eliminate express preemption provisions so they can proceed to a
confirmation hearing where they intend to show that implied
preemption of specified statutes is available to confirm the Plan,
and (2) state with specificity the facts demonstrating that the
State of California ("State") and the CPUC have waived
their sovereign immunity, and, in the event the Bankruptcy Court
finds that such immunity has been waived, to provide for
declaratory and injunctive relief against the State and the
CPUC.  If the Bankruptcy Court determines that such sovereign
immunity has not been waived, the Bankruptcy Court indicated in its
February 7, 2002 decision that it would still be able to enforce
its confirmation order under certain circumstances.  PG&E
Corporation and the Utility also stated that they intend to seek an
expedited interlocutory appeal of an order denying approval of the
disclosure statement on the grounds that the Bankruptcy Court erred
in its February 7, 2002 decision finding that express preemption is
not applicable to the Plan.  PG&E Corporation and the
Utility also stated that, upon approval of the amended disclosure
statement, they intend to proceed with the solicitation of consents
and confirmation of the amended Plan while the interlocutory appeal
is pending.  (For further information regarding the Bankruptcy
Court's February 7, 2002 decision, see the Current Report on
Form 8-K filed by PG&E Corporation and the Utility with the
Securities and Exchange Commission on February 13, 2002.)
Finally, on February 26, 2002, the Utility filed its monthly
operating report for the month ended December 31, 2001, with the
Bankruptcy Court. The Utility's monthly operating report includes
an unaudited income statement for the month and an unaudited
balance sheet dated as of the end of the month. These unaudited
financial statements are attached as Exhibit 99.1 to this report.
Although not included in Exhibit 99.1, the monthly operating report
also includes a statement of receipts and disbursements, as well as
other information. The preliminary financial statements were
prepared using certain assumptions and estimates that are subject
to revision. Any adjustments for these estimates (based upon
changes in facts and circumstances, further analysis, and other
factors) will be reflected in the financial statements in the
period during which such adjustments are made. These adjustments
could have a material impact on reported results in the
future.
B.  2001 Attrition Rate Adjustment
On February 21, 2002, the CPUC approved the Utility's 2001
attrition rate adjustment request to increase electric distribution
revenues by approximately $151 million, effective January 1,
2001.  The 2001 capital-related portion of the increase will
be subject to a true-up based on the Utility's actual 2001
capital costs. The Utility did not request an increase in gas
distribution revenues.  As the Utility's electric rates have
been frozen in 2001, the increase in distribution-related revenues
will be offset by a reduction in electric generation-related
revenues in the same amount. Therefore, the adjustment will have no
material impact on 2001 earnings.
C. Allocation of California Department of Water Resources'
Revenue Requirements
On February 21, 2002, the CPUC approved the California
Department of Water Resources' (DWR) state-wide revenue
requirement of $9.045 billion for the two-year period ending
December 31, 2002, which amount reflects an approximate $958
million reduction in the DWR's previous revenue requirement
request of $10.03 billion. The revenue requirement represents the
DWR's total expected expenditures less anticipated proceeds
from the DWR's external financings. The CPUC allocated this
revenue requirement among the Utility and the other two California
investor-owned utilities.  The CPUC decision allocates 49.8%
of the adopted DWR revenue requirement, or about $4.5 billion, to
the Utility for the 2001-2002 period. The allocations are subject
to true-up adjustments based on the actual amount of power
purchased by the DWR for the respective utility's customers
during the 2001-2002 period.  PG&E Corporation and the
Utility are unable to predict whether future true-ups would have a
material impact on their financial condition or results of
operation.
The Utility intends to file an application for rehearing of the
decision by March 4, 2002.
D.  PG&E National Energy Group Synthetic Leases
PG&E Corporation has previously disclosed that its
subsidiary, PG&E National Energy Group, Inc (PG&E NEG), has
used "synthetic leases" in connection with some of its
power plant projects and turbine acquisition commitments.  A
synthetic lease is a form of lease financing that qualifies for
operating lease accounting treatment and, under generally accepted
accounting principles (GAAP), is kept "off balance
sheet."   This financial structure was used on three
generating-related projects that completed development in 1999 and
2000 (Lake Road, La Paloma, and Harquahala) and for financing the
acquisition of turbines for future development projects through two
master turbine trusts.
The synthetic leases related to the Lake Road and La Paloma
generating projects were entered into in August 1999 and March
2000, respectively. The synthetic leases relating to the Harqhahala
generating project and the turbine acquisitions, entered into in
July 2000 and September 2000, respectively, were terminated during
2001.
Under accounting rules, the equity investors in a synthetic
lease must maintain at least a 3% ownership interest throughout the
life of the lease.  PG&E NEG's synthetic lease
documents provide for the equity investors to fund 3% of project
costs.  There is a provision in the lease documents for the
lenders and investors to fund and be paid interest, yield and
fees.  Under current GAAP rules, the payment of any yield and
fees to the investors during construction is required to be treated
as a return of capital rather than a return on capital.
The investors in PG&E NEG's synthetic leases received
certain payments during construction of the associated projects.
These payments have been deemed to reduce the investors'
equity ownership in the associated projects to between 2.59% and
2.93%, below the required 3% level.  Accordingly, these
synthetic leases do not qualify for off balance sheet
treatment.
PG&E Corporation will revise its consolidated financial
statements for the years ended December 31, 2000 and 1999, and for
the interim periods ended March 31, June 30, and September 30,
2001, to reflect the assets and liabilities associated with these
synthetic leases.
The revision is not expected to have a material impact on
PG&E Corporation's earnings, equity, or debt covenant
compliance for such periods.
Item 7. Financial Statements, Pro Forma Financial Information,
and Exhibits
Exhibit 99.1 - Pacific Gas and Electric Company Income Statement
for the month ended December 31, 2001, and Balance Sheet dated
December 31, 2001.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrants have duly caused this report to be signed on
their behalf by the undersigned thereunto duly authorized.
PG&E CORPORATION
By:  CHRISTOPHER P. JOHNS
CHRISTOPHER P. JOHNS
Senior Vice President and
Controller
PACIFIC GAS AND ELECTRIC COMPANY
By:  DINYAR B. MISTRY
DINYAR B. MISTRY
Vice President and Controller
Dated:  February 27, 2002