PG&E 2015 Annual Report Download - page 85

77
PART II
ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The CPUC authorizes most of the Utility’s revenues in the
Utility’s GRC and its GT&S rate cases, which generally occur
every three years. The Utility’s ability to recover revenue
requirements authorized by the CPUC in these rates cases
is independent, or “decoupled” from the volume of the
Utility’s sales of electricity and natural gas services. The
Utility recognizes revenues that have been authorized for
rate recovery, are objectively determinable and probable of
recovery, and are expected to be collected within 24 months.
Generally, revenue is recognized ratably over the year.
The CPUC also has authorized the Utility to collect additional
revenue requirements to recover costs that the Utility has
been authorized to pass on to customers, including costs
to purchase electricity and natural gas; and to fund public
purpose, demand response, and customer energy eciency
programs. In general, the revenue recognition criteria for
pass-through costs billed to customers are met at the time
the costs are incurred.
The FERC authorizes the Utility’s revenue requirements in
periodic (often annual) TO rate cases. The Utility’s ability
to recover revenue requirements authorized by the FERC
is dependent on the volume of the Utility’s electricity
sales, and revenue is recognized only for amounts billed
and unbilled.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and short-term,
highly liquid investments with original maturities of three
months or less. Cash equivalents are stated at fair value.
Restricted Cash
Restricted cash consists primarily of the Utility’s cash
held in escrow pending the resolution of the remaining
disputed claims made by electricity suppliers in the Utility’s
proceeding under Chapter 11 of the U.S. Bankruptcy Code.
(See “Resolution of Remaining Chapter 11 Disputed Claims”
in Note 13 below.)
Allowance for Doubtful Accounts Receivable
PG&E Corporation and the Utility recognize an allowance
for doubtful accounts to record uncollectable customer
accounts receivable at estimated net realizable value.
The allowance is determined based upon a variety of
factors, including historical write-o experience, aging of
receivables, current economic conditions, and assessment
of customer collectability.
Inventories
Inventories are carried at weighted-average cost and include
natural gas stored underground as well as materials and
supplies. Natural gas stored underground is recorded to
inventory when injected and then expensed as the gas
is withdrawn for distribution to customers or to be used
as fuel for electric generation. Materials and supplies are
recorded to inventory when purchased and expensed or
capitalized to plant, as appropriate, when consumed or
installed.
Emission Allowances
The Utility purchases GHG emission allowances to satisfy
its compliance obligations. Associated costs are recorded
as inventory and included in current assets – other and
other noncurrent assets – other on the Consolidated
Balance Sheets. Costs are carried at weighted-average
and are recoverable through rates.
Property, Plant, and Equipment
Property, plant, and equipment are reported at the lower of their historical cost less accumulated depreciation or fair
value. Historical costs include labor and materials, construction overhead, and AFUDC. (See “AFUDC” below.) The
Utility’s total estimated useful lives and balances of its property, plant, and equipment were as follows:
(inmillionsexceptestimatedusefullives)
EstimatedUseful
Lives(years)
BalanceatDecember
 
Electricitygeneratingfacilities() to    
Electricitydistributionfacilities to  
Electricitytransmissionfacilities to  
Naturalgasdistributionfacilities to  
Naturalgastransportationandstoragefacilities to  
Constructionworkinprogress  
Totalpropertyplantandequipment  
Accumulateddepreciation () ()
Netpropertyplantandequipment    
() BalanceincludesnuclearfuelinventoriesStorednuclearfuelinventoryisstatedatweighted-averagecostNuclearfuelin
thereactorisexpensedasitisusedbasedontheamountofenergyoutput(SeeNotebelow)