PG&E 2013 Annual Report Download - page 101

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 12: RESOLUTION OF REMAINING CHAPTER 11 DISPUTED CLAIMS (Continued)
accrued interest and the earned interest from customers in rates, these collections are not held in escrow. If the
amount of accrued interest is greater than the amount of interest ultimately determined to be owed on the remaining
net disputed claims, the Utility would refund to customers any excess interest collected. The amount of any interest
that the Utility may be required to pay will depend on the final determined amount of the remaining net disputed
claims and when such interest is paid.
NOTE 13: RELATED PARTY AGREEMENTS AND TRANSACTIONS
The Utility and other subsidiaries provide and receive various services to and from their parent, PG&E
Corporation, and among themselves. The Utility and PG&E Corporation exchange administrative and professional
services in support of operations. Services provided directly to PG&E Corporation by the Utility are priced at the
higher of fully loaded cost (i.e., direct cost of good or service and allocation of overhead costs) or fair market value,
depending on the nature of the services. Services provided directly to the Utility by PG&E Corporation are generally
priced at the lower of fully loaded cost or fair market value, depending on the nature and value of the services.
PG&E Corporation also allocates various corporate administrative and general costs to the Utility and other
subsidiaries using agreed-upon allocation factors, including the number of employees, operating and maintenance
expenses, total assets, and other cost allocation methodologies. Management believes that the methods used to
allocate expenses are reasonable and meet the reporting and accounting requirements of its regulatory agencies.
The Utility’s significant related party transactions were:
Year Ended
December 31,
2013 2012 2011
(in millions)
Utility revenues from:
Administrative services provided to PG&E
Corporation ............................ $ 7 $ 7 $ 6
Utility expenses from:
Administrative services received from PG&E
Corporation ............................ $ 45 $ 50 $ 49
Utility employee benefit due to PG&E Corporation . 57 51 33
At December 31, 2013 and 2012, the Utility had receivables of $22 million and $19 million, respectively, from
PG&E Corporation included in accounts receivable—other and other noncurrent assets—other on the Utility’s
Consolidated Balance Sheets, and payables of $17 million, each year respectively, to PG&E Corporation included in
accounts payable—other on the Utility’s Consolidated Balance Sheets.
NOTE 14: COMMITMENTS AND CONTINGENCIES
PG&E Corporation and the Utility have significant contingencies arising from their operations, including
contingencies related to natural gas matters and environmental remediation. The Utility also has substantial financial
commitments in connection with agreements entered into to support its operating activities. PG&E Corporation also
has financial commitments described under ‘‘Other Commitments’’ below.
Natural Gas Matters
On September 9, 2010, a natural gas transmission pipeline owned and operated by the Utility ruptured in San
Bruno, California. The ensuing explosion and fire resulted in the deaths of eight people, numerous personal injuries,
and extensive property damage. PG&E Corporation’s and the Utility’s financial condition, results of operations, and
cash flows have been materially affected by the costs the Utility has incurred related to the ongoing regulatory
proceedings, investigations, and civil lawsuits that commenced following the San Bruno accident.
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