PG&E 2011 Annual Report Download - page 108

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NOTE 15: COMMITMENTS AND CONTINGENCIES (Continued)
Natural Gas Supply, Transportation, and Storage Commitments
The Utility purchases natural gas directly from producers and marketers in both Canada and the United States
to serve its core customers and to fuel its owned-generation facilities. The Utility also contracts for natural gas
transportation from the points at which the Utility takes delivery (typically in Canada, the US Rocky Mountain
supply area, and the southwestern United States) to the points at which the Utility’s natural gas transportation
system begins. In addition, the Utility has contracted for natural gas storage services in northern California in order
to better meet core customers’ winter peak loads.
At December 31, 2011, the Utility’s undiscounted future expected payment obligations were as follows:
(in millions)
2012 ................................................. $ 746
2013 ................................................. 249
2014 ................................................. 198
2015 ................................................. 188
2016 ................................................. 152
Thereafter ............................................. 974
Total ................................................. $2,507
Costs incurred for natural gas purchases, natural gas transportation services, and natural gas storage amounted
to $1.8 billion in 2011, $1.6 billion in 2010, and $1.4 billion in 2009.
Nuclear Fuel Agreements
The Utility has entered into several purchase agreements for nuclear fuel. These agreements have terms ranging
from one to 14 years and are intended to ensure long-term nuclear fuel supply. The contracts for uranium and for
conversion and enrichment services provide for 100% coverage of reactor requirements through 2016, while contracts
for fuel fabrication services provide for 100% coverage of reactor requirements through 2017. The Utility relies on a
number of international producers of nuclear fuel in order to diversify its sources and provide security of supply.
Pricing terms are also diversified, ranging from market-based prices to base prices that are escalated using published
indices.
At December 31, 2011, the undiscounted future expected payment obligations were as follows:
(in millions)
2012 ................................................. $ 88
2013 ................................................. 89
2014 ................................................. 130
2015 ................................................. 189
2016 ................................................. 141
Thereafter ............................................. 909
Total ................................................. $1,546
Payments for nuclear fuel amounted to $77 million in 2011, $144 million in 2010, and $141 million in 2009.
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