2010 FERC Form 1 - Pacific Gas and Electric Company

Name of Respondent
PACIFIC GAS AND ELECTRIC COMPANY
This Report is:
(1) X An Original
(2) A Resubmission
Date of Report
(Mo, Da, Yr)
04/08/2011
Year/Period of Report
2010/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
the amount of dividend equivalents associated with the vested RSUs that have accrued since the date of grant.
The weighted average grant-date fair value per RSU granted during 2010 and 2009 was $42.97 and $35.53, respectively. The
total fair value of RSUs that vested during 2010 and 2009 was $5 million and less than $1 million, respectively. As of December 31,
2010, $21 million of total unrecognized compensation costs related to nonvested RSUs are expected to be recognized over the
remaining weighted average period of 2.70 years.
The following table summarizes RSU activity for 2010:
Number of
Weighted Average Grant-
Restricted Stock Units
Date Fair Value
Nonvested at January 1 664,992 $ 35.78
Granted 640,060 $ 42.97
Vested (125,651) $ 35.60
Forfeited (25,005) $ 37.61
Nonvested at December 31 1,154,396 $ 39.74
Performance Shares
On March 10, 2010, PG&E Corporation granted 605,275 contingent performance shares to eligible employees under the 2006
LTIP. Unlike performance shares awarded in prior periods (see below), which settle in cash, 2010 grants will be settled in PG&E
Corporation common stock and are classified as share-based equity awards. Performance shares granted and outstanding prior to 2010
will not be modified and will continue to be paid and settled in cash. The vesting of the performance shares granted in 2010 is
dependent upon three years of continuous service. Additionally the amount of common stock that recipients are entitled to receive, if
any, will be determined based on PG&E Corporation’s TSR relative to the performance of a specified group of peer companies for the
applicable three year performance period. Total compensation expense for these shares is based on the grant-date fair value, which is
determined using a Monte Carlo simulation valuation model. Performance share expense is recognized ratably over the requisite
service period based on the fair values determined, except for the expense attributable to awards granted to retirement-eligible
participants, which is recognized on the date of grant. Dividend equivalents on equity-classified awards, if any, will be paid in cash
upon vesting date based on the amount of common stock awarded.
For performance shares classified as equity awards, the following table summarizes activity for 2010:
Number of
Weighted Average Grant-
Performance Shares
Date Fair Value
Nonvested at January 1 -
Granted 616,990 $ 35.60
Vested -
Forfeited (7,020) $ 35.60
Nonvested at December 31 609,970 $ 35.60
As of December 31, 2010, $10 million of total unrecognized compensation costs related to nonvested performance shares are
expected to be recognized over the remaining weighted-average period of 1.22 years.
Prior to 2010, PG&E Corporation awarded performance shares to eligible participants under the 2006 LTIP as hypothetical
shares of common stock that vest at the end of a three-year period and are settled in cash based on the performance of PG&E
Corporation’s TSR. Upon vesting, the amount of cash that recipients are entitled to receive, if any, is determined by multiplying the
number of vested performance shares by the average closing price of PG&E Corporation common stock for the last 30 calendar days in
the three-year performance period. This result is then adjusted based on PG&E Corporation’s TSR relative to the performance of a
specified group of peer companies for the applicable three-year performance period. These outstanding performance shares are
classified as a liability because the performance shares can only be settled in cash. During each reporting period compensation
FERC FORM NO. 1 (ED. 12-88) Page 123.21