PG&E 2010 Annual Report Download - page 78

industrial, and agricultural properties; and under the Self-
Generation Incentive program to promote distributed
generation technologies installed on the customer’s side of
the Utility meter that provide electricity and gas for all or a
portion of that customer’s load.
“Other” at December 31, 2010 and 2009 primarily
consisted of regulatory liabilities related to the gain
associated with the Utility’s acquisition of the permits and
other assets related to the Gateway Generating Station as
part of a settlement that the Utility entered into with
Mirant Corporation and insurance recoveries for hazardous
substance remediation.
REGULATORY BALANCING ACCOUNTS
The Utility’s current regulatory balancing accounts
represent the amounts expected to be received from or
refunded to the Utility’s customers through authorized rate
adjustments within the next 12 months. Regulatory
balancing accounts that the Utility does not expect to
collect or refund in the next 12 months are included in
other noncurrent assets – regulatory assets and noncurrent
liabilities – regulatory liabilities in the Consolidated
Balance Sheets.
Current Regulatory Balancing Accounts, Net
Receivable (Payable)
Balance at December 31,
(in millions) 2010 2009
Utility generation $ 303 $ 355
Public purpose programs 164 83
Distribution revenue adjustment
mechanism 145 152
Gas fixed cost 56 93
Hazardous substance 38 30
Other 143 115
Total regulatory balancing accounts, net $ 849 $ 828
The utility generation balancing account is used to
record and recover the authorized revenue requirements
associated with Utility-owned electric generation, including
capital and related non-fuel operating and maintenance
expenses. The distribution revenue adjustment mechanism
balancing account is used to record and recover the
authorized electric distribution revenue requirements and
certain other electric distribution-related authorized costs.
The Utility’s recovery of these revenue requirements is
independent, or “decoupled,” from the volume of sales;
therefore, the Utility recognizes revenue evenly over the
year, even though the level of cash collected from
customers will fluctuate depending on the volume of
electricity sales. During periods of more temperate weather,
there is generally an under-collection in this balancing
account due to lower electricity sales and lower rates.
During the warmer months of summer, there is generally
an over-collection due to higher rates and electric usage
that cause an increase in generation billings.
The public purpose programs balancing accounts
primarily track the recovery of the authorized public
purpose program revenue requirements and incentive
awards earned by the Utility for implementing customer
energy efficiency programs. The public purpose programs
primarily consist of the energy efficiency programs;
low-income energy efficiency programs; research,
development, and demonstration programs; and renewable
energy programs.
The gas fixed cost balancing account is used to track the
recovery of CPUC-authorized gas distribution revenue
requirements and certain other gas distribution-related
costs. The under-collected or over-collected position of this
account is dependent on seasonality and volatility in gas
volumes.
The hazardous substance balancing accounts are used to
track recoverable hazardous substance cleanup costs
through the CPUC-approved ratemaking mechanism that
authorizes the Utility to recover 90% of hazardous waste
remediation costs. The current balance represents eligible
remediation costs incurred by the Utility during 2009 that
will be recovered through an annual true-up filing with the
CPUC in January 2011. (See Note 15 below.)
At December 31, 2010 and 2009, “other” primarily
consisted of balancing accounts that track recovery of the
authorized revenue requirements and costs related to the
SmartMeterTM advanced metering project.
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