PG&E 2013 Annual Report Download - page 109

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 14: COMMITMENTS AND CONTINGENCIES (Continued)
The following table shows the future fixed capacity payments due under QF agreements that are treated as
capital leases. (These amounts are also included in the table above.) These payments are discounted to their present
value in the table below using the Utility’s incremental borrowing rate at the inception of the leases. These capital
lease QF agreements expire between April 2014 and September 2021. The amount of this discount is shown in the
table below as the amount representing interest.
(in millions)
2014 .......................................................... $ 27
2015 .......................................................... 24
2016 .......................................................... 22
2017 .......................................................... 18
2018 .......................................................... 12
Thereafter ...................................................... 8
Total fixed capacity payments ........................................ 111
Less: amount representing interest .................................... 14
Present value of fixed capacity payments ............................... $97
Minimum lease payments associated wit h the lease obligations are included in the Utility’s cost of electricity.
The timing of the recognition of the lease expense conforms to the ratemaking treatment for the Utility’s recovery of
the cost of electricity.
The present value of the fixed capacity payments due under these agreements is recorded on the Consolidated
Balance Sheets. At December 31, 2013 and 2012, current liabilities—other included $23 million and $29 million,
respectively, and noncurrent liabilities—other included $74 million and $96 million, respectively. The corresponding
assets at December 31, 2013 and 2012 of $97 million and $125 million including accumulated amortization of
$176 million and $148 million, respectively are included in property, plant, and equipment on the Consolidated
Balance Sheets.
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 more reliably meet customers’ loads.
At December 31, 2013, the Utility’s undiscounted future expected payment obligations for natural gas supplies,
transportation and storage were as follows:
(in millions)
2014 .......................................................... $ 727
2015 .......................................................... 198
2016 .......................................................... 150
2017 .......................................................... 108
2018 .......................................................... 108
Thereafter ...................................................... 756
Total .......................................................... $ 2,047
Costs incurred for natural gas purchases, natural gas transportation services, and natural gas storage, which
include contracts less than 1 year, amounted to $1.6 billion in 2013, $1.3 billion in 2012, and $1.8 billion in 2011.
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