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UNITED STATES |
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SECURITIES AND EXCHANGE COMMISSION |
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Washington, D.C. 20549 |
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FORM 8-K |
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CURRENT REPORT |
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Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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Date of Report: February 1, 2005
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PG&E CORPORATION |
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(Exact Name of Registrant as specified in Charter) |
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California |
1-2609 |
94-323914 |
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(State or other jurisdiction of incorporation) |
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(IRS Employer |
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One Market, Spear Tower, Suite 2400, San Francisco, CA |
94105 |
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(Address of principal executive offices) |
(Zip code) |
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415-267-7000 |
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(Registrant’s Telephone Number, Including Area Code) |
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N/A |
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(Former Name or Former Address, if Changed Since Last Report) |
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PACIFIC GAS AND ELECTRIC COMPANY |
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(Exact Name of Registrant as specified in Charter) |
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California |
1-2348 |
94-0742640 |
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(State or other jurisdiction of incorporation) |
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(IRS Employer |
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77 Beale Street, P. O. Box 770000, San Francisco, California |
94177 |
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(Address of principal executive offices) |
(Zip code) |
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(415) 973-7000 |
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(Registrant’s Telephone Number, Including Area Code) |
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N/A |
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(Former Name or Former Address, if Changed Since Last Report) |
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[ ] |
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting Material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act |
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Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act |
Item 1.02– Termination of a Material Definitive Agreement
On
January 28, 2005, the Securities and Exchange Commission (SEC)
declared effective the registration statement previously filed
relating to the offer and sale of energy recovery bonds (ERBs) by a
wholly owned subsidiary of Pacific Gas and Electric Company
(Utility) to refinance the regulatory asset established under the
settlement agreement entered into on December 19, 2003 by PG&E
Corporation, the Utility, and the California Public Utilities
Commission (CPUC) to resolve the Utility’s Chapter 11
proceeding. It is anticipated that the consummation of the
offer and sale of the first series of ERBs, in the approximate
amount of $1.9 billion, could occur as soon as February 10,
2005.
It was previously anticipated that the first series of ERBs would be issued as early as January 2005. Based on this expectation, PG&E Corporation entered into an accelerated share repurchase arrangement with Goldman, Sachs & Co. on December 23, 2004. Under this arrangement, PG&E Corporation had agreed to repurchase shares of its outstanding common stock with an aggregate purchase price of approximately $975 million in early February 2005. Due to the revised schedule for issuance of ERBs, on January 31, 2005, PG&E Corporation provided notice of termination of the accelerated share repurchase transaction. The termination is effective on February 1, 2005.
PG&E
Corporation expects to enter into a replacement accelerated share
repurchase arrangement by the end of February or early March 2005
after the first series of ERBs is issued and after PG&E
Corporation publicly releases its financial results for the year
ended December 31, 2004. The revised schedule for the issuance of ERBs
and share
repurchase is not expected to have a material impact on the
previously issued guidance for PG&E Corporation’s 2005
earnings per share.
Item 8.01 - Other Events
As previously disclosed, PG&E Corporation, its directors, and
the directors of the Utility have been named in a lawsuit filed by
the California Attorney General. Also, as previously
disclosed, the City and County of San Francisco (CCSF) filed a
similar lawsuit against PG&E Corporation. Both suits
allege unfair or fraudulent business acts or practices in violation
of California Business and Professions Code Section 17200 (Section
17200). The claims in both suits are based on alleged
violations of conditions established in the CPUC’s holding
company decisions. Plaintiffs allege that the defendants
violated these conditions when PG&E Corporation allegedly
failed to provide adequate financial support to the Utility during
the California energy crisis.
These lawsuits have been consolidated and are pending in the San
Francisco Superior Court (Superior Court). The Attorney
General and CCSF seek significant restitution, penalties, or
equitable relief. On October 8, 2003, the U.S. District Court
for the Northern District of California (District Court) held that
the claims for restitution were the property of the Utility’s
bankruptcy estate, thus removing the restitution claims from the
lawsuits. The District Court also determined that the
Attorney General’s and CCSF’s civil penalty and
injunctive relief claims could be resolved in Superior Court.
The Attorney General and CCSF have appealed the District
Court’s decision to the U.S. Court of Appeals for the Ninth
Circuit, where it is currently pending.
At a hearing on December 8, 2004, the Superior Court heard argument
on the issue of how to determine the number of violations of
Section 17200 for purposes of calculating the amount of potential
civil penalties at issue. Under Section 17200, the Superior
Court can impose a penalty for each violation of up to
$2,500. On January 21, 2005, the Superior Court issued a
tentative decision finding that the standard to be applied is the
“per act” test. The Superior Court rejected the
“per victim” and “per [customer] bill”
approaches advocated by the plaintiffs, standards that potentially
could have resulted in millions of separate
“violations.” The Superior Court stated that:
“[t]he only potential ‘victim’ here is PG&E,
the transferor in each of the alleged violative acts.”
The Superior Court explained that each such transfer, if improper
under Section 17200, would constitute a separate
“violation” of the statute. The Attorney General
and CCSF allege that transfers of money from the Utility to its
parent, PG&E Corporation, through dividends and share
repurchases from the date of PG&E Corporation’s formation
on January 1, 1997 through the end of 2000, when dividends were
last paid, violated the holding company conditions, which in turn
violated Section 17200.
The Superior Court stated that it would consider any
non-substantive revisions to the tentative decision proposed by the
parties at a case management conference to be held on February 25,
2005. PG&E Corporation believes that the applicable
calculation methodology for civil penalties, if any violations of
Section 17200 were to be found, would not result in a material
adverse effect on its financial condition or results of
operations.
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SIGNATURE |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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PG&E CORPORATION |
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By: |
LINDA Y.H. CHENG |
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Linda Y.H. Cheng |
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PACIFIC GAS AND ELECTRIC COMPANY |
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By: |
LINDA Y.H. CHENG |
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Linda Y.H. Cheng |
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Dated: February 1, 2005