The Registrant meets the conditions set forth in General Instruction I 1(a) and (b) of Form 10-K and is therefore filing this Form with the reduced disclosure format.

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 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 an accelerated filer (as defined in Rule 12b-2 of the Act).
              [  ] Yes                [X] No

• repay in full the Certificates;
  
• fund the Overcollateralization and Capital Subaccounts, or the Subaccounts, established under the Indenture; and
  
• pay all related costs and fees.

     The Servicing Agreement requires Pacific Gas and Electric Company, as the Servicer of the Transition Property, to seek periodic adjustments to the FTA Charges through advice letters filed with the CPUC. The Financing Order and the PU Code require the CPUC to approve the periodic adjustments. The adjustments are intended to increase the likelihood that actual FTA Charges collected are neither more nor less than the amount necessary to pay all of the aforementioned amounts. Normally the FTA Charges are decreased each year as interest payments are made on a declining outstanding balance on the Notes. The adjustments to the FTA Charges are based on:

• actual collections and updated assumptions by the Servicer as to future usage of electricity by specified customers;
  
• future expenses relating to the Transition Property, the Notes, and the Certificates; and
  
• the rate of delinquencies and write-offs.

     The Servicer has filed and the CPUC has approved the following advice letters in 2001, 2002, and 2003:

• In December 2001, the Servicer filed a routine advice letter advising the CPUC of an increase to the FTA Charges effective January 1, 2002. The increase was necessary due to an under-collection of FTA Charges in 2001 and an anticipated decline in electricity sales in 2002.

• In December 2002, the Servicer filed a routine advice letter advising the CPUC of a decrease to the FTA Charges effective January 1, 2003. The decrease was necessary due to the reduction in interest payments on the Notes, reflecting the declining principal balance of the Notes.
  
• In December 2003, the Servicer filed a routine advice letter advising the CPUC of a decrease to the FTA Charges effective January 1, 2004. The decrease was necessary due to the reduction in interest payments on the Notes, reflecting the declining principal balance of the Notes and the achievement of the required level of funding in the Subaccounts.

The Trust

     The Trust was organized in November 1997 solely for the purpose of purchasing the Notes and issuing the Certificates. The Trust does not conduct any other material business activities.

Item 2.   Properties.

     PG&E Funding LLC has no material physical properties. PG&E Funding LLC's primary asset is the Transition Property described in Item 1 (Business), above.

     The Trust has no material properties. The Trust's primary assets are the Notes described in Item 1 (Business), above.

Item 3.   Legal Proceedings.

     There are no material pending legal proceedings involving PG&E Funding LLC, the Trust, or the Transition Property.

Item 4.   Submission of Matters to a Vote of Security Holders.

     Omitted with respect to PG&E Funding LLC pursuant to General Instruction I of Form 10-K.

Item 5.   Market for Registrant's Common Equity and Related Shareholder Matters.

Sales of Unregistered Securities

     There is no established public trading market for PG&E Funding LLC's equity securities. Pacific Gas and Electric Company owns all of PG&E Funding LLC's equity. Pacific Gas and Electric Company purchased its membership interest in PG&E Funding LLC in July 1997 at a purchase price of $5,000 and has made capital contributions to PG&E Funding LLC totaling approximately $27,348,000 as of December 31, 2003. The purchase was exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof. PG&E Funding LLC has made no other sales of unregistered securities.

Restrictions on Dividends

     Under the Indenture, PG&E Funding LLC is prohibited from making any distributions to its member unless no default has occurred. The Indenture further restricts such a distribution based on the book value of PG&E Funding LLC. Under the Indenture, PG&E Funding LLC may make a distribution to its member only if its book value is equal to at least 0.5% of the original principal amount of all series of Notes that remain outstanding, after taking into account the member distribution. During 2003, 2002 and 2001, PG&E Funding LLC did not make any distributions to its member. PG&E Funding LLC may make distributions to its member from time to time in the future as permitted by the Indenture and approved by the Board of Directors.

Certificate Holders

     At March 10, 2004, the sole holder of record of the Certificates was Cede & Co., as nominee of The Depository Trust Company, or the DTC. DTC holds securities for its participating organizations, which maintain security positions for their customers' accounts. The Certificates are not traded on any established trading market although market prices are available from financial information systems such as Bloomberg.

Critical Accounting Policies

     The preparation of financial statements in accordance with accounting principles generally accepted in the United States, or GAAP, involves the use of estimates and assumptions that affect the amounts reported in the financial statements. Application of PG&E Funding LLC's significant accounting policies did not result in management needing to make material assumptions about matters that would be considered highly uncertain at the time of estimation. PG&E Funding LLC's significant accounting policies are discussed in Note 2 of the Notes to the financial statements.

Forward-Looking Statements

     This Annual Report on Form 10-K contains a forward-looking statement that future collections of FTA Charges are expected to be sufficient to cover scheduled principal and interest payments on the Notes and related expenses. This statement involves risks and uncertainties and is based on the beliefs and assumptions of management and on information currently available to management. Actual results or outcomes could differ materially as a result of various factors, including:

• future electricity sales levels, which are affected by a variety of factors, including general economic and financial market conditions, weather, conservation efforts, and outages; and
  
• updated assumptions by the Servicer as to future expenses relating to the Transition Property, the Notes, and the rate of delinquencies and write-offs.
  

Item 7A.   Quantitative and Qualitative Disclosures about Market Risk.

Long Term Debt

The table below provides information about the Notes at December 31, 2003:

The estimated fair value of the Notes based on market prices available from financial information systems such as Bloomberg was approximately $1.3 billion at December 31, 2003.

Item 8.   Financial Statements and Supplementary Data.

     The financial statements and related financial information of PG&E Funding LLC are set forth below.

     The Trust is a pass-through entity with no assets other than the Notes and no liabilities other than the Certificates. It does not have, and will not have, income or losses separate from payments on the Notes. Expenses of the trustees of the Trust are payable by PG&E Funding LLC pursuant to the terms of a Fee and Indemnity Agreement. For these reasons, no separate financial statements of the Trust are included.

To the Members of PG&E Funding LLC:

We have audited the accompanying balance sheets of PG&E Funding LLC (a Delaware Limited Liability Company and wholly-owned subsidiary of Pacific Gas and Electric Company (a Debtor-in-Possession)) (the "Company") as of December 31, 2003 and 2002, and the related statements of income and changes in member's equity and cash flows for each of the three years in the period ended December 31, 2003. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2003 and 2002, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the financial statements, Pacific Gas and Electric Company (a Debtor-in-Possession), the Servicer of the Transition Property, sought protection from its creditors by filing a voluntary petition under the provisions of Chapter 11 of the United States Bankruptcy Code.

/s/ DELOITTE & TOUCHE LLP

San Francisco, California

March 1, 2004

See accompanying Notes to the Financial Statements.

See accompanying Notes to the Financial Statements.

NOTE 1. BASIS OF PRESENTATION

     The Annual Report on Form 10-K includes the financial statements and notes of PG&E Funding LLC, a special purpose, single member limited liability company organized under the laws of the State of Delaware. PG&E Funding LLC's sole member is Pacific Gas and Electric Company, a provider of electricity and natural gas services in northern and central California. Pacific Gas and Electric Company is a subsidiary of PG&E Corporation.

     PG&E Funding LLC was formed in July 1997 to effect the issuance of $2,901,000,000 in principal amount of PG&E Funding LLC notes, or the Notes. The proceeds from the Notes were paid to Pacific Gas and Electric Company in return for Transition Property, as described below. Pacific Gas and Electric Company used the proceeds to finance a ten percent electric rate reduction, which became effective on January 1, 1998. The reduction is provided to Pacific Gas and Electric Company's residential and small commercial electric customers in connection with the electric industry restructuring mandated by California Assembly Bill 1890, as amended by California Senate Bill 477 (electric industry restructuring legislation).

     PG&E Funding LLC was organized for the limited purpose of issuing the Notes and purchasing the Transition Property from Pacific Gas and Electric Company. Transition Property is the right to be paid a specified amount (presented in the financial statements as "Transition Property receivable") from nonbypassable Fixed Transition Amount Charges, or the FTA Charges, payable by residential and small commercial electric customers. The California Public Utilities Commission, or the CPUC, authorized the FTA Charges pursuant to the electric industry restructuring legislation. PG&E Funding LLC issued the Notes in December 1997 to the California Infrastructure and Economic Development Bank Special Purpose Trust PG&E-1, a Delaware business trust, or the Trust. The Trust then issued certificates corresponding to each class of Notes, or the Certificates, in a public offering.

     Deutsche Bank National Trust Company (formerly Bankers Trust Company of California, N.A.), or the Trustee, holds the collected FTA Charges in separate bank accounts. The funds in these bank accounts are restricted and can be used only to pay principal and interest on the Notes and related expenses. These funds are classified as "Restricted funds" in the Balance Sheets. The Restricted funds balance was approximately $76.6 million at December 31, 2003, and $67.0 million at December 31, 2002.

     PG&E Funding LLC is restricted by its organizational documents from engaging in other activities. In addition, its organizational documents require it to operate in a manner such that it should not be included in the bankruptcy estate of Pacific Gas and Electric Company (discussed below). PG&E Funding LLC is legally separate from Pacific Gas and Electric Company. The assets of PG&E Funding LLC are not available to creditors of Pacific Gas and Electric Company or PG&E Corporation. The Transition Property is legally not an asset of Pacific Gas and Electric Company or PG&E Corporation. PG&E Funding LLC is expected to dissolve after the scheduled maturity of the Notes on December 26, 2007.

     On April 6, 2001, Pacific Gas and Electric Company, or the Servicer, filed a voluntary petition for relief under the provisions of Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Northern District of California, or the Bankruptcy Court. The Servicer has informed PG&E Funding LLC that, despite the Chapter 11 filing, it will continue to perform all duties as Servicer, including remitting daily to the Trustee all FTA Charges collected. Remittances from the Servicer to the Trustee have not been interrupted by the Servicer's Chapter 11 filing.

     The Servicer's Chapter 11 proceedings resulted in a Servicer default under Section 7.01(d) of the Servicing Agreement (as defined below). On April 11, 2001, the Trustee informed holders of the Certificates of the default. The Trustee indicated that it did not intend to pursue any remedies without the written request of the necessary number of holders of Certificates.

     In September 2001, the Servicer and its parent company, PG&E Corporation, proposed a plan of reorganization that would have disaggregated the Servicer's businesses. In April 2002, the CPUC proposed an alternative plan that would not have disaggregated the Servicer's businesses. On December 19, 2003, the Servicer, PG&E Corporation and the CPUC entered into a settlement agreement, or the Settlement Agreement, that contemplated a new plan of reorganization to supersede the competing plans. Under the Settlement Agreement, the Servicer remains vertically integrated. On December 22, 2003, the Bankruptcy Court confirmed the new plan of reorganization, or the Plan of Reorganization, which fully incorporates the Settlement Agreement. Implementation of the Plan of Reorganization is subject to various conditions, including the consummation of the public offering of long-term debt, the receipt of investment grade credit ratings and final CPUC approval of the Settlement Agreemen t. PG&E Funding LLC does not expect payments on the Notes to be affected by the Plan of Reorganization. The Servicer has asserted that the Plan of Reorganization will not have an adverse effect on its ability to perform all duties as Servicer.    

Cash and Cash Equivalents

     Invested cash and other investments with original maturities of three months or less are considered cash equivalents. Cash equivalents are stated at cost, which approximates fair value.

Restricted Funds

     Restricted funds balances include collected FTA Charges and Subaccounts required by the Indenture. The Restricted funds balances were as follows at December 31:

     Pursuant to an Indenture between PG&E Funding LLC and the Trustee, PG&E Funding LLC is required to maintain funds equal to approximately 0.5% of the original principal amount of the Notes, less $100,000, or approximately $14.4 million in the "Capital Subaccount" with the Trust. These funds are to be held in reserve and used only in the event that collections of the FTA Charges provide insufficient funds to make scheduled payments on the Notes and to pay other expenses of PG&E Funding LLC.

     Additionally, the CPUC Financing Order provides that PG&E Funding LLC is to collect and maintain an additional reserve over the life of the Notes in the Overcollateralization Subaccount. The amount to be maintained increases in equal increments of $363,000 each quarter. The amount required was approximately $8.7 million at the end of 2003 and approximately $7.3 million at the end of 2002. The use of these funds is the same as the Capital Subaccount except that these funds are depleted before those in the Capital Subaccount are used.

Unamortized Debt Issuance Expenditures and Discount on the Notes

     The expenses associated with the issuance of the Notes have been capitalized. These expenses and the discount on the Notes are being amortized on a straight-line basis over the life of each respective class of Notes. The expenses are reflected in interest expense in the accompanying statement of income and changes in member's equity.

Income Taxes

     PG&E Funding LLC is a single-member limited liability company. Accordingly, all federal income tax effects and all material State of California franchise tax effects of PG&E Funding LLC's activities accrue to Pacific Gas and Electric Company.

Use of Estimates

     The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of revenues, expenses, assets, and liabilities and the disclosure of contingencies. Actual results could differ from these estimates.

Revenue Recognition

     PG&E Funding LLC has one primary source of income, which is the income from the Transition Property receivable. PG&E Funding LLC's other source of income is the interest earned on the restricted cash accounts.

NOTE 3. TRANSITION PROPERTY RECEIVABLE

The following reconciles the changes in the Transition Property receivable balance during 2003 and 2002:

The average yield on the Transition Property receivable balance was approximately 7.28% in 2003 and 6.98% in 2002.

NOTE 4. LONG TERM DEBT

     In December 1997, PG&E Funding LLC issued $2,901,000,000 of Notes to the Trust. The Trust, in turn, issued pass-through certificates, or the Certificates, known as "Rate Reduction Bonds" with an original principal amount equal to the original principal amount of the Notes. PG&E Funding LLC used the proceeds from the Notes to purchase the Transition Property receivable from Pacific Gas and Electric Company.

     The Notes are secured solely by the Transition Property and other assets of PG&E Funding LLC. Scheduled maturities and interest rates for the Notes at December 31, 2003, and December 31, 2002, are as follows:

     
     The table below provides expected principal payments on the Notes:

     The estimated fair value of the Notes was approximately $1.3 billion at December 31, 2003, and $1.6 billion at December 31, 2002. The estimated fair values are based on market prices available from financial information systems such as Bloomberg.

     The Notes will be repaid with FTA Charges authorized by the CPUC. The Servicer collects the FTA Charges from its residential and small commercial electric customers. The Servicer deposits the FTA Charges collected in an account maintained by the Trustee of the Trust. On January 4, 2001, Standard and Poors lowered the short-term credit rating of the Servicer to A-3. On January 5, 2001, Moody's Investor Services Inc. lowered the short-term credit rating of the Servicer to P-3. In accordance with section 6.11(b) of the Servicing Agreement (as described in Note 5 of the Notes to the Financial Statements), on January 8, 2001, the Servicer began to remit FTA Charges collected to the Trustee on a daily basis. Previously, the Servicer remitted FTA Charges on a monthly basis.

     Each quarter, the FTA Charges collected are used to make principal and interest payments on the Notes. The debt service requirements include an overcollateralization amount that is retained for the benefit of the holders of the Notes. Any amount not required for debt service will be returned to PG&E Funding LLC.

NOTE 5. SIGNIFICANT AGREEMENTS AND RELATED PARTY TRANSACTIONS

     Under the Transition Property Servicing Agreement, or the Servicing Agreement, the Servicer is required to (1) manage and administer the Transition Property of PG&E Funding LLC and (2) collect the FTA Charges from residential and small commercial electric customers on behalf of PG&E Funding LLC. PG&E Funding LLC pays a servicing fee equal to 0.25% of the outstanding principal amount of the Notes. The Servicer is also entitled to receive as compensation any interest earnings on FTA Charge collections prior to remittance to the Trust and any late payment charges collected from Pacific Gas and Electric Company's customers. PG&E Funding LLC incurred servicing fees of approximately $3.4 million in 2003, $4.1 million in 2002, and $4.8 million in 2001.

     Under the Administrative Services Agreement, Pacific Gas and Electric Company is required to provide administrative and technical services to PG&E Funding LLC. Pursuant to the terms of this agreement, Pacific Gas and Electric Company may not charge fees in excess of $25,000 per calendar quarter without the consent of the California Infrastructure and Economic Development Bank. PG&E Funding LLC incurred administrative servicing fees of approximately $100,000 in each of 2003, 2002, and 2001.

     The Trust was created for the limited purposes of (1) purchasing the Notes from PG&E Funding LLC, (2) issuing the Certificates, and (3) applying the proceeds from the Notes to the payment of the Certificates. Under a Fee and Indemnity Agreement, PG&E Funding LLC is responsible for paying all fees and expenses incurred by the Trust.

Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.

     None.

Item 9A.   Controls and Procedures.

     Based on an evaluation of PG&E Funding LLC's disclosure controls and procedures conducted as of December 31, 2003, PG&E Funding LLC's principal executive officer and principal financial officer have concluded that such controls and procedures are effective to ensure that information required to be disclosed by PG&E Funding LLC in reports the company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission (SEC) rules and forms.

     There were no changes in internal controls over financial reporting that occurred during the quarter ended December 31, 2003, that have materially affected, or are reasonably likely to materially affect, PG&E Funding LLC's controls over financial reporting.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant on this 10th day of March, 2004, in the capacities indicated.