This excerpt taken from the PCG 10-K filed Feb 18, 2005.
Cost of Electricity
The Utility's cost of electricity includes electricity purchase costs and the cost of fuel used by its owned generation facilities, but it excludes costs to operate its owned generation facilities, which are included in operating and maintenance expense. Electricity purchase costs and the cost of fuel used by owned generation facilities are passed through in rates to customers. The following table shows a breakdown of the Utility's cost of electricity and the total amount and average cost of purchased power, excluding in each case both the cost and volume of electricity provided by the DWR to the Utility's customers:
In 2004, the Utility's cost of electricity increased approximately $451 million, or 19%, as compared to 2003 mainly due to the following factors:
In 2003, the Utility's cost of electricity increased approximately $837 million, or 56%, compared to 2002 mainly due to the following factors:
The Utility's cost of electricity in 2005 will depend upon electricity prices and the amount of the Utility's residual net open position (see the "Risk Factors" section of this MD&A).