SECURITIES AND EXCHANGE COMMISSION

		     Washington, D.C.  20549




			    FORM 8-K

			 CURRENT REPORT





	     Pursuant to Section 13 or 15(d) of the
		 Securities Exchange Act of 1934


		Date of Report: April 18, 1996




		PACIFIC GAS AND ELECTRIC COMPANY
     (Exact name of registrant as specified in its charter)



California                    1-2348              94-0742640     

(State or other juris-      (Commission         (IRS Employer
diction of incorporation)   File Number)   Identification Number)

77 Beale Street, P.O.Box 770000, San Francisco, California 94177
       (Address of principal executive offices) (Zip Code)





Registrant's telephone number, including area code:(415) 973-700


Item 5.  Other Events

A.  Performance Incentive Plan - Year-to-Date Financial Results 

The following information includes forward looking statements that 
involve a number of risks, uncertainties, and assumptions, as 
described in more detail below.  

The Performance Incentive Plan (Plan) is an annual incentive
compensation plan applicable to all regular, nonbargaining unit 
employees of Pacific Gas and Electric Company (PG&E) and designated 
subsidiaries.  The Plan provides for awards based on (1) PG&E's 
success in meeting overall corporate financial performance objectives, 
based on combined earnings per common share for PG&E's utility 
operations (including Pacific Gas Transmission Company (PGT), a wholly 
owned subsidiary of PG&E), Diablo Canyon Nuclear Power Plant (Diablo 
Canyon) operations and PG&E's diversified operations, conducted 
principally through PG&E Enterprises (Enterprises), a wholly owned 
subsidiary of PG&E; and (2) the performance of the employee's 
organizational unit in meeting its specific unit, team or individual 
objectives.  The organizational objectives may include such measures 
as cost control, quality and reliability of service to customers, 
public and employee safety, financial performance and operational 
efficiency.

Under the Plan, the Nominating and Compensation Committee of the Board 
(Committee) makes the final determination of awards based upon 
achievement of the Plan objectives for officers.  The Committee has 
the discretion to modify or eliminate awards for officers.  The final 
determination of non-officer awards is made by the chief executive 
officer, who also has the discretion to modify or eliminate non-
officer awards.  

The performance measurement target for the 1996 Plan year was 
disclosed in a Report on Form 8-K/A dated January 18, 1996, and was 
based upon the corporate capital and operating budgets prepared for 
1996. 

The 1996 budgeted earnings per common share for the utility were 
derived from, among other things, (i) budgeted revenues as authorized 
by the California Public Utilities Commission (CPUC) for 1996 which 
include the results of the 1996 General Rate Case (GRC), (ii) PG&E's 
capital budget for 1996 of approximately $1.3 billion for utility 
operations and (iii) budgeted utility operating expenses that are 
approximately $250 million greater than the amount adopted by the CPUC 
for recovery in the 1996 GRC.  The higher expense level is primarily 
attributable to several projects related to transmission and 
distribution system reliability, and improved customer service and 
public information systems.  The utility budgeted earnings per common 
share assumes contribution to earnings of $.11 per common share from 
PGT. 

The budgeted earnings per common share for Diablo Canyon were derived 
from, among other things, (i) a reduction in the price of power 
produced by Diablo Canyon from 11.0 cents per kWh in 1995 to 10.5 
cents per kWh in 1996, consistent with the agreement to modify the 
Diablo Canyon rate case settlement (Diablo Settlement) which was 
approved by the CPUC in 1995, (ii) an operating capacity factor 
(excluding refueling outages) of 94.0%, (iii) an overall annual 
capacity factor of 88.8% and (iv) one 40-day refueling outage at Unit 
2 during 1996.  Budgeted operating expenses for 1996 relating to 
Diablo Canyon are approximately equal to those budgeted for 1995.  
Budgeted capital expenditures for Diablo Canyon are approximately $35 
million for 1996, which is approximately 10% more than actual capital 
expenditures in 1995.  

The budgeted earnings per common share for diversified operations 
assumes net income of $15 million from U.S. Generating Company, which 
is offset by budgeted net losses of $28 million attributable primarily 
to business activities involving international power generation and 
distribution, and energy products and services in U.S. utility 
markets.  Actual results may vary significantly depending on the 
availability of attractive investment or acquisition opportunities.  

All of the 1996 budgeted earnings per common share amounts assume that 
the average number of shares of common stock outstanding during 1996 
is 406 million.  The budgeted earnings per common share amounts assume 
no significant gain or loss on the sale of assets. 

On a quarterly basis, PG&E discloses year-to-date financial 
performance relating to the three types of operations: utility, Diablo 
Canyon and diversified operations.  For the three months ended    
March 31, 1996, selected financial information is shown below:



	    (in thousands of dollars, except per share amounts)
		   Three Months Ended March 31, 1996
=================================================================

			     Actual              Budget
			  (unaudited)
                                           
Operating Revenues:
  Utility                 $ 1,777,436            $ 1,833,363
  Diablo Canyon               439,977            426,822
  Diversified Operations       31,355                 23,577
			  -----------            -----------
Total Consolidated        $ 2,248,768            $ 2,283,762
			  ===========            ===========

Net Income (Loss):  
   Utility                $   127,384        $   154,578
   Diablo Canyon              129,129            102,795
   Diversified Operations       4,191                 (1,478)
			  -----------            -----------
Total Consolidated        $   260,704                255,895      
			  ===========            ===========

Earnings (Loss) Per 
Common Share:
  Utility                 $      0.29        $      0.36
  Diablo Canyon                  0.31               0.24
  Diversified Operations         0.01                   0.00
			  -----------            -----------
Total Consolidated        $      0.61            $      0.60
			  ===========            ===========


  In the opinion of management, the unaudited "actual" financial 
information presented above reflects all adjustments to date which are 
necessary to present a fair statement of operating revenues, net 
income and earnings per common share for the year.  All material 
adjustments are of a normal recurring nature.  This information should 
be read in conjunction with the 1995 Consolidated Financial Statements 
and Notes to Consolidated Financial Statements incorporated by 
reference in PG&E's Annual Report on Form 10-K.  

  Diablo Canyon operated at an overall capacity factor of
96.7% compared to a budgeted overall capacity factor of 94.0% for the 
three months ended March 31, 1996.  

  Utility maintenance and other operating expenses were higher than 
budgeted due to higher expenses for certain distribution reliability 
and customer service activities.  



The budgeted corporate earnings per common share is a performance 
target and is not a forecast of actual performance that will be 
realized by PG&E. Actual performance during the year may differ 
materially from the budgeted amount.  The budgeted amount does not 
reflect the resolution of various regulatory uncertainties or other 
contingencies, including those disclosed in the Notes to PG&E's 
Consolidated Financial Statements or in PG&E's Annual Report on Form 
10-K, which could materially affect PG&E's performance during the 
year.  Among others these uncertainties include:  

- -       The outcome of the California electric industry 
restructuring and the transition to a competitive 
environment, including the extent to which PG&E will be able 
to recover its stranded costs (costs which are above market 
and could not be recovered under market-based pricing) 
through a competition transition charge (CTC) or otherwise. 
The restructuring may adversely impact PG&E's returns on its 
investments in utility generating assets and its ability to 
recover certain other costs, including qualifying facilities 
(QF) power purchase obligations and generation-related 
regulatory assets.  In connection with the restructuring, 
PG&E has filed a proposal with the CPUC seeking to modify 
Diablo Canyon pricing and adopt a customer electric rate 
freeze, effective January 1, 1997.  Approval of this 
proposal would significantly reduce the level of PG&E's CTC 
by reducing PG&E's common equity return on its investment in 
Diablo Canyon and accelerating the capital recovery of the 
plant and other utility generation-related assets.  While it 
would not adversely affect PG&E's cash flow, PG&E's proposal 
to modify Diablo Canyon pricing and effect a customer 
electric rate freeze, and to accelerate recovery of utility 
generation-related investments and regulatory assets, would 
result in a significant reduction in annual earnings 
beginning in 1997.  

- -       Changes in accounting due to changes in the regulatory or 
competitive environment, including a change in the method or 
lives used to depreciate plant and the possible discontinued 
application of Statement of Financial Accounting Standards  
No. 71.  

- -       The continued operation of Diablo Canyon at assumed 
operating levels and under the rates and terms specified in 
the existing Diablo Settlement.  Under the prices for 1996, 
each Diablo Canyon operating unit contributes approximately 
$2.7 million in revenues per day.  As noted above, PG&E has 
proposed certain modifications to the Diablo Settlement, 
which would be effective January 1, 1997.  

- -       The outcome of the Gas Accord negotiations and resolution of 
existing regulatory issues.  PG&E has proposed to settle 
several outstanding gas regulatory issues that are currently 
pending at the CPUC in separate proceedings, including 
issues relating to PG&E's capacity commitments with 
Transwestern Pipeline Company, the Interstate Transition 
Cost Surcharge proceeding and the reasonableness proceeding 
for the PG&E portion of the PGT/PG&E Pipeline Expansion.  

B.  Interim CTC Procedure

On April 10, 1996, the CPUC granted PG&E's emergency motion to 
establish an interim Competition Transition Charge procedure that will 
apply to electric retail customers with a monthly peak load over 500 
kilowatts that terminate or reduce bundled electric services from PG&E 
and transfer their purchases of electricity for that load to other 
suppliers.  The CPUC's order requires these departing customers to 
pay an interim monthly charge based upon the departing customer's 
current contribution in rates to PG&E's above-market generation costs. 
Departing customers will also be required to execute a CTC agreement 
in which they agree to pay the final amount of CTC as determined by 
the CPUC.  This rate procedure is interim in nature and will remain 
effective until the CPUC adopts and implements a final CTC mechanism, 
which is expected to be effective January 1, 1998.  At that time, 
amounts paid on an interim basis will be subject to true-up in order 
to conform the interim CTC rates to those approved by the CPUC on a 
final basis.

The CPUC directed interested parties to enter into an expedited 
collaboration to attempt to set an interim CTC level consistent with 
the principles set forth in the decision.  Specifically, rather than 
requiring departing customers to pay their full contribution to CTC 
for the entire multi-year transition period (payable in a lump sum or 
on a monthly basis over the transition period) as PG&E initially 
proposed, PG&E was directed to develop a shorter term monthly charge 
that would continue to collect current rate contributions to above-
market generation costs until replaced by a permanent CTC mechanism. 
If no consensus is reached through the collaboration within three days 
after discussions begin, the unresolved issues will be referred to an 
administrative law judge to prepare a recommended decision for CPUC 
approval.



			      PACIFIC GAS AND ELECTRIC COMPANY


				 GORDON R. SMITH
			      By ________________________________
				 GORDON R. SMITH
				 Senior Vice President and
				 Chief Financial Officer



Dated:  April 18, 1996