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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
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[X]
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
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EXCHANGE
ACT OF 1934
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For
the fiscal year ended December 31,
2009
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Or
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[ ]
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
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SECURITIES
EXCHANGE ACT OF 1934
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For
the transition period from __________________________ to __________________________
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Commission
File Number of issuing entity: 333-119762
PG&E ENERGY RECOVERY FUNDING
LLC
(Exact
name of issuing entity as specified in its charter)
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PACIFIC GAS AND ELECTRIC
COMPANY
(Exact
name of depositor and sponsor as specified in its charter)
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Delaware
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20-1707696
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(State
or other jurisdiction of
incorporation
or organization)
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(I.R.S.
Employer
Identification
No.)
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245
Market Street, Suite 424
San
Francisco, California
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94105
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code (415) 973-6252
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Securities
registered pursuant to Section 12(b) of the
Act: None
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Securities
registered pursuant to Section 12(g) of the
Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer as defined
in Rule 405 of the Regulations Act.
[
] Yes [X] No
Indicate
by check mark if the registrant is not required to file reports pursuant
to Section 13 or Section 15(d) of the Act.
[
] Yes [X] No
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Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
[X] Yes [ ] No
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (of for such shorter period that the registrant was required to submit
and post such files).
[ ] Yes [X] No
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
[ ] Large
accelerated filer [ ] Accelerated
filer [X] Non-accelerated
filer [ ] Smaller reporting
company
(Do not check if a
smaller
reporting
company)
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act).
[ ] Yes [X] No
The
registrant does not have any voting or non-voting common equity held by
non-affiliates.
Documents
incorporated by reference: A portion of the Joint Proxy Statement relating to
the 2010 Annual Meeting of Shareholders of PG&E Corporation and Pacific Gas
and Electric Company has been incorporated by reference in Item 11 of Part III
of this report.
PART
I
Item
1. Business.
Omitted
pursuant to General Instruction J of Form 10-K.
Item
1A. Risk Factors.
Omitted
pursuant to General Instruction J of Form 10-K.
Item
1B. Unresolved Staff Comments.
None.
Item
2. Properties.
Omitted
pursuant to General Instruction J of Form 10-K.
Item
3. Legal Proceedings.
Omitted
pursuant to General Instruction J of Form 10-K.
Item
4. Reserved.
PART
II
Item
5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities.
Omitted
pursuant to General Instruction J of Form 10-K.
Item
6. Selected Financial Data.
Omitted pursuant to General Instruction J of Form 10-K.
Item
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Omitted
pursuant to General Instruction J of Form 10-K.
Item
7A. Quantitative and Qualitative Disclosures about Market
Risk.
Omitted
pursuant to General Instruction J of Form 10-K.
Item
8. Financial Statements and Supplementary Data.
Omitted
pursuant to General Instruction J of Form 10-K.
Item
9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosures.
Omitted
pursuant to General Instruction J of Form 10-K.
Item
9A. Controls and Procedures.
Omitted
pursuant to General Instruction J of Form 10-K.
Item
9A(T). Controls and Procedures.
None.
Item
9B. Other Information.
None.
PART
III
Item
10. Directors, Executive Officers, and Corporate
Governance.
PG&E
Energy Recovery Funding LLC has four directors. At least one director must not
be, and must not have been for at least five years prior to the date of his or
her appointment:
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an
employee, director, stockholder, partner, or officer of PG&E Energy
Recovery Funding LLC or any of PG&E Energy Recovery Funding LLC’s
affiliates (other than his or her service as an independent director of
PG&E Energy Recovery Funding LLC or of an affiliate that is a
special-purpose bankruptcy-remote entity);
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•
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a
supplier of PG&E Energy Recovery Funding LLC or any of its affiliates;
or
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any
member of the immediate family of a person described in the first or
second bullet points above.
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The
following are the directors and executive officers as of March 26,
2010:
Name
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Age
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Title
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Sara
A. Cherry
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41
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President
and Director
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Dinyar
B. Mistry
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48
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Controller
and Director
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Nicholas
M. Bijur
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37
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Treasurer
and Director
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Bernard
J. Angelo
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40
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Director
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Directors'
and Executive Officer's Business Experience
Sara A.
Cherry was appointed as the President and a director of PG&E Energy Recovery
Funding LLC on March 2, 2010. Effective March 1, 2010, Ms. Cherry
became the Vice President, Finance and Chief Financial Officer of Pacific Gas
and Electric Company. Ms. Cherry previously served as Senior
Director, Internal Auditing of Pacific Gas and Electric Company from October
2009 to February 2010. She also served as the Director of Internal
Auditing and Compliance of Pacific Gas and Electric Company from February 2009
to September 2009. In 2006, Ms. Cherry served as Chief Financial
Officer of Langer, Inc., a medical and personal care products
company. In 2005, Ms. Cherry served as Director, Management Reporting
of Pacific Gas and Electric Company.
Dinyar B.
Mistry is the Vice President and Controller of PG&E Corporation and Pacific
Gas and Electric Company. During 2009, Mr. Mistry served as Chief
Risk Officer and Vice President of Internal Audit of the
companies. Mr. Mistry served as Vice President of Regulation and
Rates from 2005 to 2008, and as Vice President and Controller of Pacific Gas and
Electric Company from 2000 to 2005.
Nicholas
M. Bijur has served as Treasurer and Senior Director at Pacific Gas and Electric
Company since July 2009. Prior to becoming Treasurer, he served as
Assistant Treasurer of PG&E Corporation and Pacific Gas and Electric Company
since 2005. Previously, Mr. Bijur was a Vice President at Morgan
Stanley in the Investment Banking Division from December 2003 to February 2005,
and an Associate at Morgan Stanley from August 2000 to December
2003.
Bernard
J. Angelo is the independent director. Mr. Angelo joined Global
Securitization Services, LLC in April 1997 and has been a partner since
2000. Mr. Angelo was an Assistant Vice President at Bankers Trust Company
from January 1993 to April 1997.
Code
of Conduct
PG&E
Energy Recovery Funding LLC is a wholly-owned subsidiary of the Utility which in
turn is a subsidiary of PG&E Corporation. PG&E Corporation
and the Utility have adopted codes of conduct and ethics which apply to all of
their subsidiaries. The codes of conduct and ethics are available
both on PG&E Corporation's website www.pgecorp.com, and the
Utility’s website www.pge.com.
Item
11. Executive Compensation
Information
responding to Item 11 appears under the headings “Compensation Discussion and
Analysis (CD&A),” “Compensation Committee Report,” “Summary
Compensation Table - 2009,” “Grants of Plan-Based Awards in 2009,” “Outstanding
Equity Awards at Fiscal Year End - 2009,” “Option Exercises and Stock Vested
During 2009,” “Pension Benefits – 2009,” “Non-Qualified Deferred Compensation,”
and “Potential Payments Upon Resignation, Retirement, Termination, Change in
Control, Death, or Disability” in the Joint Proxy Statement of PG&E
Corporation and Pacific Gas and Electric Company relating to the 2010 Annual
Meetings of Shareholders, which information, to the extent that it relates to
Mr. Chris Johns and Ms. Barbara Barcon, both of whom were executive officers of
PG&E Energy Recovery Funding LLC for a portion of 2009, is hereby
incorporated by reference.
Bernard
J. Angelo receives an annual fee of $2,500 for serving as a director of PG&E
Energy Recovery Funding LLC. None of the other directors of PG&E
Energy Recovery Funding LLC receive any compensation for serving as a
director.
Item
12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters.
None.
Item
13. Certain Relationships and Related Transactions, and
Director Independence
Information responding to Item 13 is included under Item 10. (Directors,
Executive Officers, and Corporate Governance) above.
Item
14. Principal Accountant Fees and Services.
Omitted pursuant to General Instruction J of Form 10-K.
PART
IV
Item
15. Exhibits, Financial Statement Schedules.
(a) Documents
filed as a part of this report:
1.
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Financial
Statements.
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Omitted
pursuant to General Instruction J of Form 10-K as listed under Item 8 of
this report.
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2.
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Financial
Statement Schedules.
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Omitted
pursuant to General Instruction J of Form 10-K as listed under Item 8 of
this report.
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3.
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Exhibits
required by Item 601 of Regulation S-K:
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31 Rule
13a-14(d)/15d-14(d) certification
33 Report
on assessment of compliance with servicing criteria for asset-backed
securities
34 Attestation
report on assessment of compliance with servicing criteria for
asset-backed securities
35 Servicer
compliance statement
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(b) Exhibits
required by this Form and Item 601 of Regulation S-K:
3.1 Certificate
of Formation of the Issuing Entity filed with the Delaware Secretary of State on
October 5, 2004 (incorporated by reference to the exhibit with the same
numerical designation included as an exhibit to the Issuing Entity’s Amendment
No. 1 to Registration Statement No. 333-119762 filed with the Securities and
Exchange Commission on December 20, 2004)
3.2 Limited
Liability Company Agreement of the Issuing Entity executed as of October 5, 2004
(incorporated by reference to the exhibit with the same numerical designation
included as an exhibit to the Issuing Entity’s Amendment No. 1 to Registration
Statement No. 333-119762 filed with the Securities and Exchange Commission on
December 20, 2005)
4.1 Indenture
dated as of February 10, 2005 between the Issuing Entity and Deutsche Bank
National Trust Company providing for the issuance of Series 2005-1 Bonds
(incorporated by reference to the exhibit with the same numerical designation
included as an exhibit to the Issuing Entity’s Report on Form 8-K filed with the
Securities and Exchange Commission on February 10, 2005)
4.2 Form
of Series 2005-1 Energy Recovery Bond (included as Exhibit A to the Indenture
filed as Exhibit 4.1) (incorporated by reference to the exhibit with the same
numerical designation included as an exhibit to the Issuing Entity’s Report on
Form 8-K filed with the Securities and Exchange Commission on February 10,
2005)
4.3 Indenture
dated as of November 9, 2005 between the Issuing Entity and Deutsche Bank
National Trust Company providing for the issuance of Series 2005-2 Bonds
(incorporated by reference to Exhibit 4.1 to the Issuing Entity’s Report on Form
8-K filed with the Securities and Exchange Commission on November 10,
2005)
4.4 Form
of Series 2005-2 Energy Recovery Bond (incorporated by reference to Exhibit 4.2
to the Issuing Entity’s Report on Form 8-K filed with the Securities and
Exchange Commission on November 10, 2005)
10.1 Recovery
Property Purchase and Sale Agreement dated as of February 10, 2005 between the
Issuing Entity and Pacific Gas and Electric Company (incorporated by reference
to the exhibit with the same numerical designation included as an exhibit to the
Issuing Entity’s Report on Form 8-K filed with the Securities and Exchange
Commission on February 10, 2005)
10.2 Recovery
Property Servicing Agreement dated as of February 10, 2005 between the Issuing
Entity and Pacific Gas and Electric Company (incorporated by reference to the
exhibit with the same numerical designation included as an exhibit to the
Issuing Entity’s Report on Form 8-K filed with the Securities and Exchange
Commission on February 10, 2005)
10.3 Recovery
Property Purchase and Sale Agreement dated as of November 9, 2005 between the
Issuing Entity and Pacific Gas and Electric Company (incorporated by reference
to Exhibit 10.1 to the Issuing Entity’s Report on Form 8-K filed with the
Securities and Exchange Commission on November 10, 2005)
10.4
First Amendment to Recovery Property Servicing Agreement dated as of November 9,
2005 between the Issuing Entity and Pacific Gas and Electric Company
(incorporated by reference to Exhibit 10.3 to the Issuing Entity’s Report on
Form 8-K filed with the Securities and Exchange Commission on November 10,
2005)
31
Rule 13a-14(d)/15d-14(d) certification
33
Report on assessment of compliance with servicing criteria for asset-backed
securities
34
Attestation report on assessment of compliance with servicing criteria for
asset-backed securities
35
Servicer compliance statement
Item
1112(b). Significant Obligors of Pool Assets.
None.
Item
1114(b)(2). Credit Enhancement and Other Support, Except for Certain
Derivatives Instruments.
None.
Item
1115(b). Certain Derivatives Instruments.
None.
Item
1117. Legal Proceedings.
No material legal proceedings to be reported.
Item
1119. Affiliations and Certain Relationships and Related
Transactions.
PG&E Energy Recovery Funding LLC is a wholly-owned subsidiary of Pacific Gas
and Electric Company.
Item
1122. Compliance with Applicable Servicing
Criteria.
The following exhibits are attached to this report:
33 Report
on assessment of compliance with servicing criteria for asset-backed
securities
34 Attestation
report on assessment of compliance with servicing criteria for asset-backed
securities
Item
1123. Servicer Compliance Statement.
The following exhibit is attached to this report:
35 Servicer
compliance statement
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized, this 26th day of March
2010.
PG&E
Energy Recovery Funding LLC
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(Issuing
Entity)
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By: Pacific
Gas and Electric Company, as Servicer
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By: /s/ Nicholas M. Bijur
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Nicholas
M. Bijur
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Treasurer,
Pacific Gas and Electric Company, as
Servicer
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EXHIBIT
INDEX
31 Rule
13a-14(d)/15d-14(d) certification
33 Report
on assessment of compliance with servicing criteria for asset-backed
securities
34
Attestation report on assessment of compliance with servicing criteria for
asset-backed securities
35 Servicer
compliance statement
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EXHIBIT
31
CERTIFICATION
PURSUANT TO RULE 13a-14(d)/15d-14(d)
I,
Nicholas M. Bijur, Assistant Treasurer of Pacific Gas and Electric Company, as
servicer (the "Servicer"), certify that:
1. I
have reviewed this report on Form 10-K and all reports on Form 10-D required to
be filed in respect of the period covered by this report on Form 10-K of
PG&E Energy Recovery Funding LLC (the "Exchange Act periodic
reports");
2. Based
on my knowledge, the Exchange Act periodic reports, taken as a whole, do not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by
this report;
3. Based
on my knowledge, all of the distribution, servicing and other information
required to be provided under Form 10-D for the period covered by this report is
included in the Exchange Act periodic reports;
4. I
am responsible for reviewing the activities performed by the Servicer, and based
on my knowledge and the compliance review conducted in preparing the servicer
compliance statement required in this report under Item 1123 of Regulation AB,
and except as disclosed in the Exchange Act periodic reports, the Servicer has
fulfilled its obligations under the Recovery Property Servicing Agreement dated
as of February 10, 2005 between PG&E Energy Recovery Funding LLC, as the
Issuing Entity, and the Servicer, as amended by that certain First Amendment to
Recovery Property Servicing Agreement dated as of November 9, 2005, in all
material respects; and
5. All
of the reports on assessment of compliance with servicing criteria for
asset-backed securities and their related attestation reports on assessment of
compliance with servicing criteria for asset-backed securities required to be
included in this report in accordance with Item 1122 of Regulation AB and
Exchange Act Rule 13a-18 and 15d-18 have been included as an exhibit to this
report, except as otherwise disclosed in this report. Any material
instances of noncompliance described in such reports have been disclosed in this
report on Form 10-K.
Date: March
26, 2010
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/s/ Nicholas M. Bijur
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Name: Nicholas
M. Bijur
Title: Treasurer,
Pacific Gas and Electric Company, as Servicer
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EXHIBIT
33
REPORT
ON ASSESSMENT OF COMPLIANCE WITH SERVICING CRITERIA
FOR
ASSET-BACKED SECURITIES
Pacific
Gas and Electric Company (the "Servicer"), as a party participating in the
servicing function under Item 1122 of Regulation AB, hereby reports on its
assessment of compliance with the servicing criteria specified in paragraph (d)
of Item 1122 of Regulation AB, as follows:
(1) The
Servicer is responsible for assessing compliance with the servicing criteria
applicable to it. The servicing criteria specified in the following
paragraphs of paragraph (d) of Item 1122 of Regulation AB are not applicable to
the Servicer based on the activities it performs with respect to asset-backed
securities transactions taken as a whole involving the Servicer and that are
backed by the same asset type backing the Series 2005-1 and Series 2005-2
Bonds: (1)(ii) (outsourcing), (1)(iii) (back-up servicing), (1)(iv)
(fidelity bond), 2(iii) (advances of funds or guarantees), (2)(v) (federally
insured account), (2)(vi) (unissued checks), (4)(iii) (additions, removals
or substitutions), (4)(ix) (adjustments to interest rates), (4)(x) (obligor
escrow funds), (4)(xi) (payments on behalf of obligors), (4)(xii) (late payment
penalties), (4)(xiii) (obligor disbursements), (4)(xv) (external credit
enhancement);
(2) The
Servicer used the criteria in paragraph (d) of Item 1122 of Regulation AB to
assess compliance with the applicable servicing criteria;
(3) The
Servicer has determined that it is in compliance with the applicable servicing
criteria as of December 31, 2009 and for the fiscal year ended December 31,
2009, which is the period covered by this report on Form 10-K;
(4) Deloitte
& Touche LLP, a registered public accounting firm, has issued an attestation
report on the Servicer's assessment of compliance with the applicable servicing
criteria as of December 31, 2009 and for the fiscal year ended December 31,
2009, which is the period covered by this report on Form 10-K; and
(5) Deutsche
Bank National Trust Company (the "Trustee"), as the trustee for the Series
2005-1 and Series 2005-2 Bonds issued by the Issuing Entity, may be considered a
party participating in the servicing function under Item 1122 of Regulation
AB. Although PG&E Energy Recovery Funding LLC issued all of its
securities prior to the effective date of Regulation AB, PG&E Energy
Recovery Funding LLC and the Servicer are providing reports and certifications
pursuant to Regulation AB based on comments and discussions with the staff of
the Securities and Exchange Commission during the registration statement review
process. The Trustee did not participate in such discussions and
accordingly is not required to provide an assessment and attestation relating to
securities issued in advance of the effective date of these requirements under
Regulation AB.
Date: March
26, 2010
PACIFIC
GAS AND ELECTRIC COMPANY,
as
Servicer
/s/ Nicholas M.
Bijur
Name: Nicholas
M. Bijur
Title: Treasurer,
Pacific Gas and Electric Company, as Servicer
EXHIBIT
34
ATTESTATION
REPORT ON ASSESSMENT OF COMPLIANCE WITH
SERVICING
CRITERIA FOR ASSET-BACKED SECURITIES
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Shareholders of
Pacific
Gas and Electric Company
San
Francisco, California
We have
examined management's assertion, included in the accompanying Management’s
Report on Assessment of Compliance with Servicing Criteria for Asset Backed
Securities, that Pacific Gas and Electric Company (the “Company”) complied with
the servicing criteria set forth in Item 1122(d) of the Securities and Exchange
Commission’s Regulation AB for the Series 2005-1 and Series 2005-2 Bonds of
PG&E Energy Recovery Funding LLC (the “Platform”) as of December 31, 2009,
and for the period January 1, 2009 through December 31, 2009,
excluding criteria 1122(d)(1)(ii) (outsourcing),
1122(d)(1)(iii) (back-up servicing), 1122(d)(1)(iv) (fidelity bond),
1122(d)(2)(iii) (advances of funds or guarantees),
1122(d)(2)(v) (federally insured account), 1122(d)(2)(vi) (unissued
checks), 1122(d)(4)(iii) (additions, removals or substitutions),
1122(d)(4)(ix) (adjustments to interest rates), 1122(d)(4)(x) (obligor
escrow funds), 1122(d)(4)(xi) (payments on behalf of obligors),
1122(d)(4)(xii) (late payment penalties), 1122(d)(4)(xiii) (obligor
disbursements), and 1122(d)(4)(xv) (external credit enhancement), which
management has determined are not applicable to the activities performed by the
Company with respect to the Platform. Management is responsible for
the Company’s compliance with the servicing criteria. Our responsibility is to
express an opinion on management's assertion about the Company’s compliance with
the servicing criteria based on our examination.
Our
examination was conducted in accordance with attestation standards established
by the American Institute of Certified Public Accountants, as adopted by the
Public Company Accounting Oversight Board (United States), and, accordingly,
included examining, on a test basis, evidence about the Company’s compliance
with the applicable servicing criteria, including tests on a sample basis of the
servicing activities related to the Platform, determining whether the Company
performed those selected activities in compliance with the servicing criteria
during the specified period, and performing such other procedures as we
considered necessary in the circumstances. Our procedures were limited to
selected servicing activities performed by the Company during the period covered
by this report and, accordingly, such samples may not have included servicing
activities related to each asset-backed transaction included in the
Platform. Further, an examination is not designed to detect
noncompliance arising from errors that may have occurred prior to the period
specified above that may have affected the balances or amounts calculated or
reported by the Company during the period covered by this report. We believe
that our examination provides a reasonable basis for our opinion. Our
examination does not provide a legal determination on the Company's compliance
with the servicing criteria.
In our
opinion, management's assertion that the Company complied with the
aforementioned requirements as of December 31, 2009, and for the period January
1, 2009 through December 31, 2009 for Series 2005-1 and Series 2005-2 Bonds of
PG&E Energy Recovery Funding LLC is fairly stated, in all material
respects.
/s/
Deloitte & Touche LLP
San
Francisco, CA
March 26,
2010
EXHIBIT
35
SERVICER
COMPLIANCE STATEMENT
I,
Nicholas M. Bijur, Assistant Treasurer of Pacific Gas and Electric Company (the
"Servicer"), certify that:
(a) A
review of the Servicer’s activities during the reporting period covered by this
Report on Form 10-K and of its performance under that certain Recovery Property
Servicing Agreement dated as of February 10, 2005 between PG&E Energy
Recovery Funding LLC, as the Issuing Entity, and the Servicer, as amended by
that certain First Amendment to Recovery Property Servicing Agreement dated as
of November 9, 2005 (the "Servicing Agreement") has been made under my
supervision.
(b) To
the best of my knowledge, based on such review, the Servicer has fulfilled all
of its obligations under the Servicing Agreement in all material respects
throughout the reporting period.
Date: March
26, 2010
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/s/ Nicholas M. Bijur
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Name: Nicholas
M. Bijur
Title: Treasurer,
Pacific Gas and Electric Company, as
Servicer
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