Pacific Gas & Electric?s proposal to cut transmission rates?but subsequently increase them?to avoid a five-month Federal Energy Regulatory Commission suspension was the subject of hearings at FERC this week. PG&E proposes a 2004 revenue requirement of $530 million for retail transmission service and $518 million for wholesale transmission service. However, those rates should total $603 million and $530 million, respectively, argued PG&E. It adds that because there are more customers to share the load of revenue increases, rates will decrease. PG&E told regulators it expects to spend $785 million on transmission upgrades and expansions last year and this year. ?In light of the significant additions that have occurred,? the utility argues that $603 million, not $530 million, is the justifiable increase in the current case with rates retroactive to January 1. ?A further rate decrease might be warranted,? noted FERC staff. FERC, however, allowed the new rates to go into effect at the beginning of the year. The new rates are subject to refund. In addition to the rate change, PG&E is asking for a 15-year depreciation life for transmission facilities put into service in 2003 and 2004, and a 0.5 percent adder to the return on common equity.