PG&E 2012 Annual Report Download - page 78

Download and view the complete annual report

Please find page 78 of the 2012 PG&E annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 136

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 3: REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS (Continued)
Current Regulatory Balancing Accounts, Net
Receivable
(Payable)
Balance at
December 31,
2012 2011
(in millions)
Distribution revenue adjustment mechanism .................. $ 219 $ 223
Utility generation ..................................... 117 241
Hazardous substance ................................... 56 57
Public purpose programs ................................ (83) 97
Gas fixed cost ........................................ 44 16
Energy recovery bonds .................................. (43) (105)
Energy procurement ................................... 77 (48)
Department of Energy Settlement ......................... (250) —
Other .............................................. 165 227
Total regulatory balancing accounts, net ..................... $ 302 $ 708
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
generation balancing account is used to record and recover the authorized revenue requirements associated with
Utility-owned electric generation, including capital costs and related non-fuel operating and maintenance expenses.
The recovery of these revenue requirements is decoupled from the volume of sales; therefore, the Utility recognizes
revenue evenly over the year, even though the level of cash collected from customers fluctuates depending on the
volume of electricity sales. During the colder months of winter, there is generally an under-collection in these
balancing accounts due to a lower volume of electricity sales and lower rates. During the warmer months of summer,
there is generally an over-collection due to a higher volume of electricity sales and higher rates.
The hazardous substance balancing accounts are used to record and recover hazardous substance remediation
costs that are eligible for recovery through a CPUC-approved ratemaking mechanism. (See Note 15 below.)
The public purpose programs balancing accounts are primarily used to record and recover the authorized
revenue requirements associated with administering public purpose programs, as well as incentive awards earned by
the Utility for achieving regulatory targets in the customer energy efficiency programs. The public purpose programs
primarily consist of energy efficiency programs, low-income energy efficiency programs, demand response programs,
research, development, and demonstration programs, and renewable energy programs.
The gas fixed-cost balancing account is used to record and recover authorized gas distribution revenue
requirements and certain other authorized gas distribution-related costs. Similar to the utility generation and the
distribution revenue adjustment mechanism balancing accounts discussed above, the recovery of these revenue
requirements is decoupled from the volume of sales; therefore, the Utility recognizes revenue evenly over the year,
even though the level of cash collected from customers fluctuates depending on the volume of gas sales. During the
colder months of winter, there is generally an over-collection in this balancing account primarily due to higher
natural gas sales. During the warmer months of summer, there is generally an under-collection primarily due to
lower natural gas sales.
The ERBs balancing account is used to record and refund to customers the net refunds, claim offsets, and other
credits received by the Utility from electricity suppliers related to Chapter 11 disputed claims and to record and
recover authorized ERB servicing costs. (See Note 13 below.)
The Utility is generally authorized to recover 100% of its prudently incurred electric energy procurement costs.
The Utility tracks energy procurement costs in balancing accounts and files annual forecasts of energy procurement
costs that it expects to incur over the following year. The Utility’s energy rates are set to recover such expected costs.
74