PG&E 2009 Annual Report Download - page 29

CONTRACTUAL COMMITMENTS
The following table provides information about PG&E Corporation’s and the Utility’s contractual commitments at
December 31, 2009.
Payment due by period
(in millions) Total Less Than 1 Year 1–3 Years 3–5 Years More Than 5 Years
Contractual Commitments:
Utility
Long-term debt(1):
Fixed rate obligations $16,141 $ 637 $1,547 $2,391 $11,566
Variable rate obligations 1,397 3 956 58 380
Energy recovery bonds(2) 1,306 435 871 – –
Purchase obligations:
Power purchase agreements(3):
Qualifying facilities 11,163 1,326 2,265 2,006 5,566
Renewable contracts 34,725 626 1,844 2,009 30,246
Irrigation district and water agencies 335 74 132 67 62
Other power purchase agreements 3,234 257 706 666 1,605
Natural gas supply and transportation 1,080 660 212 93 115
Nuclear fuel 1,657 134 178 249 1,096
Pension and other benefits(4) 1,138 280 531 327 –
Capital lease obligations(5) 404 50 100 92 162
Operating leases 119 22 39 32 26
Preferred dividends(6) 70 14 28 28 –
Other commitments 18 18 – – –
PG&E Corporation
Long-term debt(1):
Fixed rate obligations 725 310 40 375 –
(1) Includes interest payments over the terms of the debt. Interest is calculated using the applicable interest rate at December 31, 2009 and outstanding
principal for each instrument with the terms ending at each instrument’s maturity. Variable rate obligations consist of bonds, due in 2016-2026,
backed by letters of credit which expire in 2011 and 2012. These bonds are subject to mandatory redemption unless the letters of credit are extended
or replaced or if applicable to the series, the issuer consents to the continuation of these bonds without a credit facility. Accordingly, these bonds
have been classified for repayment purposes in 2011 and 2012. (See Note 4 of the Notes to the Consolidated Financial Statements.)
(2) Includes interest payments over the terms of the bonds. (See Note 5 of the Notes to the Consolidated Financial Statements.)
(3) This table does not include DWR allocated contracts because the DWR is legally and financially responsible for these contracts and payments.
(4) PG&E Corporation’s and the Utility’s funding policy is to contribute tax-deductible amounts, consistent with applicable regulatory decisions,
sufficient to meet minimum funding requirements. (See Note 13 of the Notes to the Consolidated Financial Statements.)
(5) See Note 16 of the Notes to the Consolidated Financial Statements.
(6) Based on historical performance, it is assumed for purposes of the table above that dividends are payable within a fixed period of five years.
As shown in the table above, the Utility’s commitments
under the many renewable power purchase agreements that
the Utility has entered into are expected to grow
significantly, assuming that the facilities are timely
developed. These costs are expected to be passed on to
customers through rate adjustments.
The contractual commitments table above excludes
potential commitments associated with the conversion of
existing overhead electric facilities to underground electric
facilities. At December 31, 2009, the Utility was committed
to spending approximately $237 million for these
conversions. These funds are conditionally committed
depending on the timing of the work, including the
schedules of the respective cities, counties, and telephone
utilities involved. The Utility expects to spend
approximately $40 million to $80 million each year in
connection with these projects. Consistent with past
practice, the Utility expects that these capital expenditures
will be included in rate base as each individual project is
completed and recoverable in rates charged to customers.
The contractual commitments table above also excludes
potential payments associated with unrecognized tax
benefits. Due to the uncertainty surrounding tax audits,
PG&E Corporation and the Utility cannot make reliable
estimates of the amount and period of future payments to
major tax jurisdictions related to unrecognized tax benefits.
Matters relating to tax years that remain subject to
examination are discussed in Note 9 of the Notes to the
Consolidated Financial Statements.
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