PG&E 2008 Annual Report Download - page 42

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• Base revenue requirements increased by approximately
$103 million, as a result of attrition adjustments as
authorized in the 2007 GRC.
• Electric transmission revenues increased by approximately
$56 million, primarily due to an increase in rates as
authorized in the current TO rate case.
• Electric operating revenues increased by approximately
$35 million, the portion of the incentive award approved
by the CPUC in December 2008 that is attributable to the
Utility’s 2006 and 2007 electricity energy effi ciency programs.
• Other electric operating revenues increased by approxi-
mately $119 million, primarily due to increases in revenue
requirements to recover costs related to the Diablo Canyon
steam generator replacement project and revenue require-
ments to fund the SmartMeter™ advanced metering project.
(See “Capital Expenditures” below.)
These increases were partially offset by a decrease
of approximately $276 million, representing the amount of
revenue collected during the comparable periods in 2007
for payment of principal and interest on the rate reduc-
tion bonds (“RRBs”) that matured in December 2007, and
approximately $22 million, representing a reduction in the
amount of revenue collected for payment of the energy
recovery bonds (“ERBs”) due to their declining balance.
The Utility’s electric operating revenues increased by
approximately $729 million, or approximately 8%, in 2007
compared to 2006, mainly due to the following factors:
• Electricity procurement costs, which are passed through
to customers, increased by approximately $742 million.
(See “Cost of Electricity” below.)
• The 2007 GRC increased 2007 base revenue requirements
by approximately $231 million.
• Revenues from public purpose programs, including the
California Solar Initiative program, increased by approxi-
mately $141 million. (See Note 3 of the Notes to the
Consolidated Financial Statements.)
• Electric transmission revenues increased by approximately
$74 million, including an increase in revenues as authorized
in the TO rate case.
The following presents the Utility’s operating results for
2008, 2007, and 2006.
Electric Operating Revenues
The Utility provides electricity to residential, industrial, agri-
cultural, and small and large commercial customers through
its own generation facilities and through power purchase
agreements with third parties. In addition, the Utility relies
on electricity provided under long-term contracts entered into
by the California Department of Water Resources (“DWR”)
to meet a material portion of the Utility’s customers’
demand (“load”). The Utility’s electric operating revenues
consist of amounts charged to customers for electricity
generation and procurement and for electric transmission
and distribution services, as well as amounts charged to
customers to recover the costs of public purpose programs,
energy effi ciency programs, and demand side management.
The following table provides a summary of the Utility’s
electric operating revenues:
(in millions) 2008 2007 2006
Electric operating revenue $12,063 $11,710 $10,871
DWR pass-through revenue(1) (1,325) (2,229) (2,119)
Utility electric operating
revenue $10,738 $ 9,481 $ 8,752
Utility electricity sales
(in millions of kWh)(2) 74,783 64,986 64,725
(1) These are revenues collected on behalf of the DWR for electricity allo-
cated to the Utility’s customers under contracts between the DWR and
power suppliers, and are not included in the Utility’s Consolidated
Statements of Income.
(2) These volumes exclude electricity provided by DWR.
The Utility’s electric operating revenues increased by
approximately $1,257 million, or approximately 13%, in
2008 compared to 2007, mainly due to the following factors:
• Electricity procurement costs passed through to customers
increased by approximately $976 million, primarily due
to an increase in the volume of power purchased by the
Utility following the DWR’s termination of a power pur-
chase contract in December 2007 and during the extended
scheduled outage at Diablo Canyon in 2008. (See “Cost
of Electricity” below.)
• Electric operating revenues to fund public purpose and
energy effi ciency programs increased by approximately
$266 million, primarily due to an increase in expenses for
these programs. (See “Operating and Maintenance” below.)