PG&E 2014 Annual Report Download - page 126

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The Utility’s significant related party transactions were:
Year Ended December 31,
(in millions) 2014 2013 2012
Utility revenues from:
Administrative services provided to PG&E Corporation $ 5 $ 7 $ 7
Utility expenses from:
Administrative services received from PG&E Corporation $ 54 $ 45 $ 50
Utility employee benet due to PG&E Corporation 70 57 51
At December 31, 2014 and 2013, the Utility had receivables of $17 million and $22 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 $20 million and $17 million, respectively, to PG&E Corporation included in accounts payable – other on
the Utility’s Consolidated Balance Sheets.
NOTE 14: CONTINGENCIES AND COMMITMENTS
PG&E Corporation and the Utility have significant contingencies arising from their operations, including contingencies
related to enforcement and litigation matters and environmental remediation. The Utility also has substantial financial
commitments in connection with agreements entered into to support its operating activities. See “Purchase Commitments” below.
PG&E Corporation has financial commitments described in “Other Commitments” below.
Enforcement and Litigation 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 shareholder funded safety work, the ongoing regulatory
investigations, and civil lawsuits that commenced following the San Bruno accident.
CPUC Investigations Regarding the Utility’s Gas Transmission System and the San Bruno Accident
There are three CPUC investigative enforcement proceedings pending against the Utility. These investigations relate to (1)
the Utility’s safety recordkeeping for its natural gas transmission system, (2) the Utility’s operation of its natural gas transmission
pipeline system in or near locations of higher population density, and (3) the Utility’s pipeline installation, integrity management,
recordkeeping and other operational practices, and other events or courses of conduct, that could have led to or contributed to the
San Bruno accident.
On September 2, 2014, the assigned CPUC ALJs issued their presiding officer decisions in the three investigative
enforcement proceedings pending against the Utility related to the Utility’s natural gas transmission operations and practices
and the San Bruno accident. The ALJs determined that the Utility committed approximately 3,700 violations of law, rules and
regulations. The ALJs jointly issued a decision calling for total fines and disallowances of $1.4 billion on the Utility to address all
violations, allocated as follows: (1) $950 million fine to be paid to the State General Fund, (2) $400 million refund to ratepayers
of previously authorized revenues, and (3) remedial measures that the ALJs estimate will cost the Utility at least $50 million. The
ALJs’ decisions are not the final decisions of the CPUC. Three CPUC Commissioners have requested that the CPUC review the
decisions. It is possible that one or more Commissioners will issue an alternate penalty decision for consideration by the CPUC.
In addition, the Utility and other parties, including the SED, TURN, the ORA, the City and County of San Francisco, and the City
of San Bruno have appealed the presiding officer decisions.
In its appeals, the Utility argued that the penalties imposed and the findings and conclusions on which they are based do
not meet applicable legal standards, are based on the misapplication of California law and regulations, and are unconstitutional.
The Utility has asked the CPUC to order the Utility to pay a significantly reduced penalty that is reasonable and proportionate in
light of the nature of the violations and that takes into account the substantial unrecovered amounts the Utility has already spent
and forecasts that it will spend on gas system safety. The Utility requested that it be allowed 180 days to raise the funds it may be
ordered to pay to the State General Fund rather than the 40 days specified in the decision. The Utility also argued that the entire
penalty should go toward funding investments in the Utility’s gas transmission system. TURN, the ORA, and the City and County
of San Francisco jointly filed an appeal urging the CPUC to disallow the Utility’s recovery of remaining PSEP costs of $877 million