This excerpt taken from the PCG 8-K filed Oct 28, 2005.
Capitalized Interest and AFUDC AFUDC is the estimated cost of debt and equity funds used to finance regulated plant additions that is allowed to be recorded as part of the costs of construction projects. AFUDC is recoverable from customers through rates once the property is placed in service. The Utility had capitalized interest and AFUDC of approximately $32 million at December 31, 2004 and $29 million at December 31, 2003. PG&E Corporation on a stand-alone basis did not have any capitalized interest and AFUDC at December 31, 2004 and 2003.