8-K 1 form8k.htm PG&E CORPORATION 8-K 8-27-2015
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: August 27, 2015
(Date of earliest event reported)

Commission
File
Number
  
Exact Name of Registrant
as specified in its charter
  
State or Other Jurisdiction
of Incorporation or
Organization
  
IRS Employer
Identification
Number
1-12609
  
PG&E CORPORATION
  
California
  
94-3234914
1-2348
  
PACIFIC GAS AND ELECTRIC COMPANY
  
California
  
94-0742640

 
77 Beale Street
P.O. Box 770000
San Francisco, California 94177
 (Address of principal executive offices) (Zip Code)
(415) 973-1000
(Registrant's telephone number, including area code)
  
77 Beale Street
P.O. Box 770000
San Francisco, California 94177
(Address of principal executive offices) (Zip Code)
(415) 973-7000
(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting Material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

Item 8.01. Other Events

Investigation of Safety Culture

On August 27, 2015, the California Public Utilities Commission (“CPUC”) began a formal investigation into whether the organizational culture and governance of PG&E Corporation and its subsidiary, Pacific Gas and Electric Company (“Utility”), prioritize safety and adequately direct resources to promote accountability and achieve safety goals and standards. The CPUC directed its Safety and Enforcement Division (“SED”) to evaluate the Utility’s and PG&E Corporation’s organizational culture, governance, policies, practices, and accountability metrics in relation to the Utility’s record of operations, including its record of safety incidents. The CPUC authorized the SED to engage a consultant to assist in the SED’s investigation and the preparation of a report containing the SED’s assessment.

The CPUC stated that the initial phase of the proceeding was categorized as ratesetting because it will consider issues both of fact and policy and because the Utility and PG&E Corporation do not face the prospect of fines, penalties, or remedies in this phase. Upon completion of the consultant’s report, the assigned Commissioner will determine the scope of and next actions in the proceeding.

2017 General Rate Case

On September 1, 2015, the Utility filed its 2017 General Rate Case (“GRC”) application with the CPUC. In the 2017 GRC, the CPUC will determine the annual amount of base revenues (or “revenue requirements”) that the Utility will be authorized to collect from customers from 2017 through 2019 to recover its anticipated costs for electric distribution, natural gas distribution, and electric generation operations and to provide the Utility an opportunity to earn its authorized rate of return. (The Utility’s revenue requirements for other portions of its operations, such as electric transmission, natural gas transportation and storage services, and electricity and natural gas purchases, are authorized in other regulatory proceedings overseen by the CPUC or the Federal Energy Regulatory Commission.)

The Utility has requested an increase of $457 million in base revenues for 2017 as compared to authorized base revenues for 2016. The application states that over the 2017-2019 GRC period, the Utility plans to make average annual capital investments of approximately $4 billion in electric distribution, natural gas distribution and electric generation infrastructure, and to improve safety, reliability, and customer service. (These annual investments would be incremental to the Utility’s capital expenditures for electric and natural gas transmission infrastructure. PG&E Corporation and the Utility plan to provide forecasts of the Utility’s capital expenditures and rate base from 2016 through 2019 at an investor conference to be held during the week of September 7, 2015. The forecasts and other materials to be used at the conference will be furnished to the Securities and Exchange Commission in a Current Report on Form 8-K.)
 

The following tables compare the requested 2017 revenue requirement amounts with the comparable revenue requirements currently authorized for 2016, by both line of business and cost category:

Line of Business:
(in millions)
  
Amounts requested in the GRC application
    
Amounts currently authorized for 2016
    
Increase compared to currently authorized amounts
  
Electric distribution
  
$
4,376
    
$
4,213
    
$
164
  
Gas distribution
    
1,827
      
1,742
      
85
  
Electric generation
    
2,170
      
1,962
      
208
  
Total revenue requirements
  
$
8,373
    
$
7,916
    
$
457
  
                         
Cost Category:
(in millions)
                        
Operations and maintenance
  
$
1,833
    
$
1,664
    
$
169
  
Customer services
    
367
      
319
      
48
  
Administrative and general
    
978
      
1,011
      
(33
)
 Less: Revenue credits
    
(140
)
    
(131
)
    
(9
)
Franchise fees, taxes other than income, and other adjustments
    
185
      
37
      
148
  
Depreciation (including costs of asset removal), return, and income taxes
    
5,150
      
5,016
      
134
  
Total revenue requirements
  
$
8,373
    
$
7,916
    
$
457
  

The Utility also requested that the CPUC establish a ratemaking mechanism that would increase the Utility’s authorized revenues in 2018 and 2019, primarily to reflect increases in rate base due to capital investments in infrastructure and, to a lesser extent, anticipated increases in wages and other expenses. The Utility estimates that this mechanism would result in increases in revenue of $489 million in 2018 and an additional $390 million in 2019.

In the upcoming months, one or more CPUC administrative law judges (“ALJs”) will be assigned to oversee the GRC. The ALJs will establish a schedule for the proceeding, including public hearings, the submission of testimony by the CPUC’s Office of Ratepayer Advocates and other interested parties, and evidentiary hearings. Following the conclusion of hearings and the submission of briefs, the ALJs will issue a proposed decision for consideration by the CPUC. In its application, the Utility requested that the CPUC issue a final decision by December 31, 2016.
 

SIGNATURES

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 
     
Dated: September 1, 2015
By:
LINDA Y.H. CHENG
   
Linda Y. H. Cheng
   
Vice President, Corporate Governance and Corporate Secretary
     
 
PACIFIC GAS AND ELECTRIC COMPANY
     
Dated: September 1, 2015
By:
LINDA Y.H. CHENG
   
Linda Y.H. Cheng
   
Vice President, Corporate Governance and Corporate Secretary