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)
applicable power purchase agreement.
As of December 31, 2010, the Utility had agreements with 226 QFs for approximately 3,700 megawatts (“MW”) that are in
operation. Agreements for approximately 3,400 MW expire at various dates between 2011 and 2028. QF power purchase agreements
for approximately 300 MW have no specific expiration dates and will terminate only when the owner of the QF exercises its
termination option. The Utility also has power purchase agreements with 75 inoperative QFs. The total of approximately 3,700 MW
consists of approximately 2,500 MW from cogeneration projects and approximately 1,200 MW from renewable sources. No single QF
accounted for more than 5% of the Utility’s 2010, 2009, or 2008 electricity sources.
Renewable Energy Power Purchase Agreements – The Utility has entered into various contracts to purchase renewable
energy to help the Utility meet the current renewable portfolio standard (“RPS”) requirement. In general, renewable contract payments
consist primarily of per megawatt hour (“MWh”) payments and either a small or no fixed capacity payment, as opposed to contracts
with non-renewable sources, which generally include both a per MWh payment and a fixed capacity payment. As shown in the table
below, the Utility’s commitments for energy payments under these renewable energy agreements are expected to grow significantly,
assuming that the facilities are developed timely. No single supplier accounted for more than 5% of the Utility’s 2010, 2009, or 2008
electricity sources.
Other Power Purchase Agreements – In accordance with the Utility’s CPUC-approved long-term procurement plans, the
Utility has entered into several power purchase agreements with third parties. The Utility’s obligations under a portion of these
agreements are contingent on the third party’s development of a new generation facility to provide the power to be purchased by the
Utility under the agreements.
Irrigation District and Water Agency Power Purchase Agreements – The Utility has contracts with various irrigation districts
and water agencies to purchase hydroelectric power. Under these contracts, the Utility must make specified semi-annual minimum
payments based on the irrigation districts’ and water agencies’ debt service requirements, whether or not any hydroelectric power is
supplied, and variable payments for operation and maintenance costs incurred by the suppliers. These contracts expire on various
dates from 2011 to 2031. Irrigation districts and water agencies consist of small and large hydro plants. No single irrigation district or
water agency accounted for more than 5% of the Utility’s 2010, 2009, or 2008 electricity sources.
At December 31, 2010, the undiscounted future expected power purchase agreement payments were as follows:
Renewable
Irrigation District &
Qualifying Facility (Other than QF) Water Agency Other
Operations & Debt Total
(in millions) Energy Capacity Energy Capacity Maintenance Service Energy Capacity Payments
2011 $ 720 $ 366 $ 796 $ 8 $ 59 $ 21 $ 3 $ 691 $ 2,664
2012 545 321 944 9 45 21 3 684 2,572
2013 542 312 1,261 9 28 15 3 822 2,992
2014 548 301 1,647 - 13 12 1 605 3,127
2015 509 259 1,942 - 11 11 - 583 3,315
Thereafter 3,129 1,263 40,882 5 27 16 - 4,227 49,549
Total $ 5,993 $ 2,822 $ 47,472 $ 31 $ 183 $ 96 $ 10 $ 7,612 $64,219
Some of the power purchase agreements that the Utility entered into with independent power producers that are QFs are
treated as capital leases. The following table shows the future fixed capacity payments due under the QF contracts that are treated as
capital leases. (These amounts are also included in the table above.) The fixed capacity payments are discounted to their present value
in the table below using the Utility’s incremental borrowing rate at the inception of the leases. The amount of this discount is shown in
the table below as the amount representing interest.
(in millions)
2011 $ 50
FERC FORM NO. 1 (ED. 12-88) Page 123.50