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             California Public Utilities Commission
505 Van Ness Avenue, Room 5301            San Francisco, CA 94102
CONTACT: Armando Rendon             October 31, 1995     CPUC-100
         415-703-1366                                (A94-12-005)

         CPUC PROPOSAL TO CUT $545 MILLION IN PG&E RATES

     An administrative law judge at the California Public
Utilities Commission today proposed a $545 million reduction in
Pacific Gas & Electric's (PG&E) rates for 1996.  The proposed
decision recommends decreases of $293 million, or 3.7%, in
electric rates and $252 million, or ll.3%, in gas rates.
     The proposed decision must be adopted or modified by the
full Commission before it becomes final.  The proposal is
scheduled to be voted upon at the Commission's December 6 public
meeting.
     PG&E had recommended reductions in the proceeding of $128.7
million for electric rates and $203.6 million for gas rates.
     If adopted by the Commission, the proposed decision would
reduce PG&E's requested budget for l996 in several areas, among
them, employee compensation, nuclear decommissioning costs and
pipeline replacement costs.  The CPUC judge found PG&E's cost
estimates of doing business in l996 to be too high.
     The proposed decision, finding that PG&E's rates should not
include the costs for activities in markets that are or will be
competitive, also denied the company's request for recovery of
about $30 million for such activities.
     Several parties were active in the proceeding, including the
CPUC Division of Ratepayer Advocates, Toward Utility Rate
Normalization, and federal executive agencies who together
advocated total rate reductions of about $756 million.  The
California Energy Commission and environmental groups addressed
matters relating to research and development, and demand-side
management programs which include energy conservation programs.
                               ###