Pacific Gas and Electric Co saidit expects to record a 470 mln dlr, or 1.25 dlr per share,
reduction in 1987 earnings because of the company's decision to
change the method used to record Diablo Canyon Nuclear Power
Plant revenues.
    The accounting change will not affect the company's cash
position and the company intends to continue paying its
dividend at the annual rate of 1.92 dlrs per share.
    Last year Pacific Gas reported earnings of 925 mln dlrs, or
2.60 dlrs per share.
    Pacific Gas said the accounting change was prompted by
delays in the receipt of a California Public Utilities
Commission decision on the company's 1984 application for rate
relief to recover the 5.8 billion dlr cost of constructing
units one and two of the Diablo Canyon Nuclear Power Project.
    It said the commission is currently allowing the company to
recover 40 pct of the cost of owning and operating the plants.
    As a result, 63 mln dlrs has been accumulating each month
as deferred non-cash account receivable, which has been
included in current income.
    But the accounting change, effective January 1, will
reflect only cash received through interim rates approved by
the commission, Pacific Gas and Electric said.
    It also said the commission is now awaiting its Public
Staff Division's report which will recommend how much of the
5.8 billion dlr investment Pacific Gas should be allowed to
recover in rates.
    The company further stated that it is confident it will
receive an objective review of the facts.
    It also said it intends to seek additional interim rates.
    Pacific Gas began construction of the two nuclear power
units in 1969. After a number of construction delays, unit one
went into operation in May 1985 and unit two went on line in
March last year.
 Reuter
