PG&E 2010 Annual Report Download - page 31

CONTRACTUAL COMMITMENTS
The following table provides information about PG&E Corporation’s and the Utility’s contractual commitments at
December 31, 2010.
Payment due by period
(in millions) Less Than 1 Year 1–3 Years 3–5 Years More Than 5 Years Total
Contractual Commitments:
Utility
Long-term debt (1):
Fixed rate obligations $ 1,085 $ 1,598 $ 2,026 $ 16,104 $ 20,813
Variable rate obligations 312 635 47 307 1,301
Energy recovery bonds 435 436 – – 871
Purchase obligations (4):
Power purchase agreements (2):
Qualifying facilities 1,086 1,720 1,617 4,392 8,815
Renewable contracts 804 2,223 3,589 40,887 47,503
Irrigation district and water agencies 80 109 47 43 279
Other power purchase agreements 694 1,512 1,189 4,227 7,622
Natural gas supply and transportation 710 464 331 1,128 2,633
Nuclear fuel 84 174 323 1,057 1,638
Pension and other benefits (3) 369 862 903 451 (6) 2,585
Capital lease obligations (4) 50 100 80 124 354
Operating leases (4) 25 41 25 73 164
Preferred dividends (5) 14 28 28 – 70
PG&E Corporation
Long-term debt (1):
Fixed rate obligations 20 40 355 – 415
(1) Includes interest payments over the terms of the debt. Interest is calculated using the applicable interest rate at December 31, 2010 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 that 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.) For information on
energy recovery bonds, see Note 5 of the Notes to the Consolidated Financial Statements.
(2) This table includes power purchase agreements with plants currently under construction and assumes plants will become operational. This table does
not include DWR-allocated contracts because the DWR is legally and financially responsible for these contracts and payments.
(3) 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 12 of the Notes to the Consolidated Financial Statements.)
(4) See Note 15 of the Notes to the Consolidated Financial Statements.
(5) Based on historical performance, it is assumed for purposes of the table above that dividends are payable within a fixed period of five years.
(6) Payments into the pension and other benefits plans are based on annual contribution requirements. As these annual requirements continue
indefinitely into the future, the amount reflected represents only one year of contributions for the Utility’s pension, pension benefit obligation
plans, and long-term disability plans.
The contractual commitments table above excludes
potential commitments associated with the conversion of
existing overhead electric facilities to underground electric
facilities. At December 31, 2010, the Utility was
committed to spending approximately $236 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 communication utilities involved. The Utility expects
to spend approximately $42 million to $60 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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