PG&E 2007 Annual Report Download - page 140
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138
To the Boards of Directors and
Shareholders of PG&E Corporation and
Pacifi c Gas and Electric Company
We have audited the accompanying consolidated balance
sheets of PG&E Corporation and subsidiaries (the
“Company”) and of Pacifi c Gas and Electric Company
and subsidiaries (the “Utility”) as of December 31, 2007 and
2006, and the related consolidated statements of income,
shareholders’ equity, and cash fl ows for each of the three
years in the period ended December 31, 2007. These fi nancial
statements are the responsibility of the respective manage-
ments of the Company and the Utility. Our responsibility
is to express an opinion on these fi nancial statements based
on our audits.
We conducted our audits in accordance with the stan-
dards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and
perform the audits to obtain reasonable assurance about
whether the fi nancial statements are free of material misstate-
ment. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the fi nancial
statements. An audit also includes assessing the accounting
principles used and signifi cant estimates made by manage-
ment, as well as evaluating the overall fi nancial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, such consolidated fi nancial statements
present fairly, in all material respects, the respective consoli-
dated fi nancial position of the Company and of the Utility
as of December 31, 2007 and 2006, and the respective results
of their consolidated operations and their cash fl ows for
each of the three years in the period ended December 31,
2007, in conformity with accounting principles generally
accepted in the United States of America.
As discussed in Note 2 of the Notes to the Consolidated
Financial Statements, in January 2007 the Company and the
Utility adopted a new interpretation of accounting standards
for uncertainty in income taxes. In 2006 the Company and
the Utility adopted new accounting standards for defi ned
benefi t pensions and other postretirement plans and share-
based payments.
We have also audited, in accordance with the standards of
the Public Company Accounting Oversight Board (United
States), the Company’s and the Utility’s internal control over
fi nancial reporting as of December 31, 2007, based on the
criteria established in Internal Control — Integrated Framework
issued by the Committee of Sponsoring Organizations of
the Treadway Commission and our report dated February 21,
2008 expressed an unqualifi ed opinion on the effectiveness
of the Company’s and the Utility’s internal control over
fi nancial reporting.
DELOITTE & TOUCHE LLP
San Francisco, California
February 21, 2008
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM