PG&E 2015 Annual Report Download - page 121

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PART II
ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Interest accrues on the remaining net disputed claims
liability at the FERC-ordered rate, which is higher than
the rate earned by the Utility on the escrow balance.
Although the Utility has been collecting the dierence
between the 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 liability, 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 liability and
when such interest is paid.
While the FERC and judicial proceedings are pending, the
Utility has pursued, and continues to pursue, settlements
with electricity suppliers. The Utility has entered into a
number of settlement agreements with various electricity
suppliers to resolve some of these disputed claims and to
resolve the Utility’s refund claims against these electricity
suppliers. Under these settlement agreements, amounts
payable by the parties are, in some instances, subject to
adjustment based on the outcome of the various refund
oset and interest issues being considered by the FERC.
Any net refunds, claim osets, or other credits that the
Utility receives from electricity suppliers either through
settlement or through the conclusion of the various FERC
and judicial proceedings are refunded to customers through
rates in future periods.
In July 2014, a settlement agreement between the Utility
and an electric supplier became eective, resolving a
portion of the Utility’s net disputed claims and resulting
in refunds to customers of $312 million. No significant
settlement agreements were reached in 2015. The Utility
is uncertain when and how the remaining net disputed
claims liability will be resolved.
Purchase Commitments
The following table shows the undiscounted future expected obligations under power purchase agreements that have
been approved by the CPUC and have met specified construction milestones as well as undiscounted future expected
payment obligations for natural gas supplies, natural gas transportation, natural gas storage, and nuclear fuel as of
December 31, 2015:
PowerPurchaseAgreements
(inmillions)
Renewable
Energy
Conventional
Energy Other
Natural
Gas
Nuclear
Fuel Total
            
      
      
      
      
Thereafter      
TOTALPURCHASECOMMITMENTS            
Third-Party Power Purchase Agreements
In the ordinary course of business, the Utility enters
into various agreements, including renewable energy
agreements, QF agreements, and other power purchase
agreements to purchase power and electric capacity. The
price of purchased power may be fixed or variable. Variable
pricing is generally based on the current market price of
either natural gas or electricity at the date of delivery.
Renewable Energy Power Purchase Agreements
In order to comply with California’s RPS requirements,
the Utility is required to deliver renewable energy to its
customers at a gradually increasing rate. The Utility has
entered into various agreements to purchase renewable
energy to help meet California’s requirement. The Utility’s
obligations under a significant portion of these agreements
are contingent on the third party’s construction of
new generation facilities, which are expected to grow
significantly. As of December 31, 2015, renewable energy
contracts expire at various dates between 2016 and 2043.
Conventional Energy Power Purchase Agreements
The Utility has entered into many power purchase
agreements for conventional generation resources,
which include tolling agreements and resource adequacy
agreements. The Utility’s obligation under a portion of
these agreements is contingent on the third parties’
development of new generation facilities to provide capacity
and energy products to the Utility. As of December 31,
2015, these power purchase agreements expire at various
dates between 2016 and 2033.
Other Power Purchase Agreements
The Utility has entered into agreements to purchase
energy and capacity with independent power producers
that own generation facilities that meet the definition of