SAN FRANCISCO - Pacific Gas and Electric Company issued the following statement after the California Public Utilities Commission (CPUC) released its draft decision on the California Department of Water Resources revenue requirement. The CPUC proposal comes more than a week after its scheduled release and after CPUC commissioners held a press conference to discuss its contents.

"After eight days of waiting, the public will finally be given an opportunity to review the CPUC's proposed revenue requirements. The document sheds no light on why the CPUC suddenly wants to shift $600 million - not just the $500 million the Commission claimed last week - in unsubstantiated DWR power costs onto our customers, from Southern California customers, over the next year. This shift would appear to mean that for the next ten years, PG&E's customers would pay 40 to 55 percent higher rates for DWR power than customers of Southern California Edison and San Diego Gas & Electric - a discriminatory price difference that will quickly add up to billions of dollars.

"The CPUC announced its new funding scheme last week without releasing any details or information to support this discriminatory pricing structure. The justification offered by CPUC commissioners and staff - that DWR's cost of electricity in Northern and Central California is higher than in Southern California - is directly contradicted by the facts:

• For the three years prior to the current crisis, prices in Northern California were no more than 11 percent higher on average than comparable prices in Southern California.

• Current price curves for longer-term electricity contracts show that forward prices for power delivered in Northern California actually are slightly lower, not higher, than comparable prices for power delivered in Southern California.

• With much fanfare, two major plants have been opened in the past two months in Northern California - the Sutter Energy Center and the Los Medanos plant in the Bay Area - and will provide over 1,000 mW, enough electricity to power 1 million Northern California homes. These efficient power plants are providing additional resources in Northern California, and thus should mitigate any alleged transmission constraints between Southern and Northern California.

"Pacific Gas and Electric Company renews its request that the CPUC not adopt this proposal until a public hearing is scheduled which will allow customers and other interested parties to examine DWR's revenue requirement."