8-K

_____________________________________________________________________________________

UNITED STATES

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: August 4, 2010

(Date of earliest event reported)

Commission File Number	Exact Name of Registrant as specified in its charter	State or Other Jurisdiction of Incorporation or Organization	IRS Employer Identification Number
1-12609	PG&E CORPORATION	California	94-3234914
1-2348	PACIFIC GAS AND ELECTRIC COMPANY	California	94-0742640

One Market, Spear Tower Suite 2400 San Francisco, California 94105 (Address of principal executive offices) (Zip Code) (415) 267-7000 (Registrant's telephone number, including area code)	77 Beale Street P.O. Box 770000 San Francisco, California 94177 (Address of principal executive offices) (Zip Code) (415) 973-7000 (Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting Material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

The information included in this Current Report on Form 8-K is being furnished, not filed, pursuant to Item 2.02 of Form 8-K.

On August 4, 2010, PG&E Corporation issued the press release attached hereto as Exhibit 99.1 announcing its financial results and the financial results of its subsidiary, Pacific Gas and Electric Company (Utility), for the quarter ended June 30, 2010.  Additional supplemental information relating to PG&E Corporation and the Utility is attached as Exhibit 99.2.  Much of this information is derived from PG&E Corporation’s and the Utility’s combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, to be filed by PG&E Corporation and the Utility with the Securities and Exchange Commission, and should be read in conjunction with such Quarterly Report on Form 10-Q.

Exhibits 99.1 and 99.2 to this report also will be posted on the “Investors” section of PG&E Corporation’s website at www.pgecorp.com. 

In order to provide investors with a measure that reflects the underlying financial performance of the business and offers investors a basis on which to compare performance from one period to another, PG&E Corporation presents results and guidance on an “earnings from operations” basis, which excludes items that are not reflective of the normal course of operations.

Item 7.01 Regulation FD Disclosure

The information included in Exhibit 99.2 is incorporated by reference in response to this Item 7.01, and is deemed to be furnished, not filed, pursuant to Item 7.01 of Form 8-K.

Item 9.01 Financial Statements and Exhibits

Exhibits

The following exhibits are being furnished, and are not deemed to be filed:

Exhibit 99.1	PG&E Corporation Press Release Dated August 4, 2010
Exhibit 99.2	Additional Supplemental Information

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

PG&E CORPORATION
By:	DINYAR B. MISTRY
	Dinyar B. Mistry Vice President and Controller
PACIFIC GAS AND ELECTRIC COMPANY
By:	DINYAR B. MISTRY
	Dinyar B. Mistry Vice President and Controller

Dated:           August 4, 2010

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Exhibit Index

Exhibit 99.1	PG&E Corporation Press Release Dated August 4, 2010
Exhibit 99.2	Additional Supplemental Information

EX-99.1

Corporate Affairs One Market, Spear Tower Suite 2400 San Francisco, CA  94105 1-800-743-6397   Exhibit 99.1

FOR IMMEDIATE RELEASE August 4, 2010

PG&E CORPORATION REPORTS SECOND QUARTER EARNINGS; REAFFIRMS GUIDANCE

§   Net income after dividends on preferred stock reported under GAAP was $333 million, or $0.86 per share.

§   On a non-GAAP basis, earnings from operations were $353million, or $0.91 per share.

§   Guidance for earnings from operations is reaffirmed for 2010 and 2011.

(San Francisco) – PG&E Corporation’s (NYSE: PCG) net income after dividends on preferred stock (also called “income available for common shareholders”) was $333 million, or $0.86 per share, in the second quarter ended June 30, 2010, as reported in accordance with generally accepted accounting principles (GAAP).  This compares with $388 million, or $1.02 per share in the same period last year, which included $0.19 per share reflecting the net positive impact of one-time items.

On a non-GAAP basis, PG&E Corporation’s earnings from operations, which exclude one-time items, were $353million, or $0.91 per share, in the second quarter of 2010.  In the same period last year, earnings from operations were $315 million, or $0.83 per share.

The quarter-over-quarter increase in earnings from operations primarily reflects higher authorized revenues associated with additional capital investments in Pacific Gas and Electric Company’s (Utility) core infrastructure and a number of smaller net positive items.

 “PG&E’s financial results for the year to date are on track with the company’s plans,” said Peter A. Darbee, Chairman, CEO, and President of PG&E Corporation. “We are reaffirming guidance for earnings from operations for 2010 and 2011, as we continue to focus on delivering clean, safe, and reliable service at a reasonable cost.”

Earnings Guidance

PG&E Corporation reaffirms its previous guidance for earnings from operations in the range of $3.35-$3.50 per share for 2010 and $3.65-$3.85 per share for 2011.

Guidance is based on various assumptions, including that the Utility maintains a ratemaking capital structure of 52 percent common equity and achieves a return on equity of at least 11.35 percent, while growing its asset base and achieving other financial objectives consistent with ranges provided at the company’s March 2010 Investor Conference.

Guidance for 2010 earnings from operations excludes the one-time costs associated with support for a statewide ballot initiative associated with the June 2010 Election and the tax impact of the federal healthcare bill enacted this year.  These one-time items are expected to impact total GAAP earnings by $0.17 per share for the year.

PG&E Corporation discloses historical financial results and bases guidance on “earnings from operations” in order to provide a measure that allows investors to compare

the underlying financial performance of the business from one period to another, exclusive of items that management believes do not reflect the normal course of operations. Earnings

from operations are not a substitute or alternative for consolidated net income presented in accordance with GAAP (see the accompanying financial tables for a reconciliation of

results and guidance based on earnings from operations to results and guidance based on consolidated net income in accordance with GAAP).

Supplemental Financial Information:

·   In addition to the financial information accompanying this release, an expanded package of supplemental financial and operational information for the quarter will be furnished to the Securities and Exchange Commission and also will be available shortly on PG&E Corporation’s website (www.pgecorp.com).

Conference Call with the Financial Community to Discuss Second Quarter Results:

·   Today’s call at 1:00 p.m., Eastern time, is open to the public on a listen-only basis via webcast. Please visit www.pgecorp.com for more information and instructions for accessing the webcast. The call will be archived on the website. Also, a toll-free replay will be accessible shortly after the live call through 8:00 p.m., Eastern time, on August 18, 2010, by dialing 866-415-9493. International callers may dial 585-419-6446. For both domestic and international callers, a confirmation code 1353 will be required to access the replay.

This press release and the tables contain forward-looking statements regarding management’s guidance for PG&E Corporation’s 2010 and 2011 earnings per share from operations that are based on current expectations and various assumptions that management believes are reasonable. These statements and assumptions are necessarily subject to various risks and uncertainties, the realization or resolution of which may be outside of management’s control. Actual results may differ materially. Factors that could cause actual results to differ materially include:

· the Utility’s ability to efficiently manage capital expenditures and its operating and maintenance expenses within authorized levels;

· the outcome of pending and future regulatory proceedings and whether the Utility is able to timely recover its costs through rates;

· the adequacy and price of electricity and natural gas supplies and whether the new day-ahead, hour-ahead, and real-time wholesale electricity markets established by the California Independent System Operator (“CAISO”) will continue to function effectively, the extent to which the Utility can manage and respond to the volatility of electricity and natural gas prices, and the ability of the Utility and its counterparties to post or return collateral;

· explosions, fires, accidents, mechanical breakdowns, the disruption of information technology and systems, and similar events that may occur while operating and maintaining an electric and natural gas system in a large service territory with varying geographic conditions that can cause unplanned outages, reduce generating output, damage the Utility’s assets or operations, subject the Utility to third-party claims for property damage or personal injury, or result in the imposition of civil, criminal, or regulatory fines or penalties on the Utility;

· the impact of storms, earthquakes, floods, drought, wildfires, disease, and similar natural disasters, or acts of terrorism or vandalism, that affect customer demand or that damage or disrupt the facilities, operations, or information technology and systems owned by the Utility, its customers, or third parties on which the Utility relies;

· the potential impacts of climate change on the Utility’s electricity and natural gas businesses;

· changes in customer demand for electricity and natural gas resulting from unanticipated population growth or decline, general economic and financial market conditions, changes in technology that include the development of alternative technologies that enable customers to increase their reliance on self-generation, or other reasons;

· the occurrence of unplanned outages at the Utility’s two nuclear generating units at Diablo Canyon, the availability of nuclear fuel, the outcome of the Utility’s application to renew the operating licenses for Diablo Canyon, and potential changes in laws or regulations promulgated by the NRC or environmental agencies with respect to the storage of spent nuclear fuel, security, safety, or other matters associated with the operations at Diablo Canyon;

· whether the Utility earns incentive revenues or incurs obligations under incentive ratemaking mechanisms, such as the CPUC’s incentive ratemaking mechanism relating to energy savings achieved through implementation of the utilities’ customer energy efficiency programs;

· the impact of federal or state laws or regulations, or their interpretation, on energy policy and the regulation of utilities and their holding companies;

· whether the Utility can successfully implement its program to install advanced meters for its electric and natural gas customers and integrate the new meters with its customer billing and other systems, the outcome of the independent investigation ordered by the CPUC and the California Legislature into customer concerns about the new meters, and the ability of the Utility to implement various rate changes including “dynamic pricing” by offering electric rates that can vary with the customer’s time of use and are more closely aligned with wholesale electricity prices;

· how the CPUC interprets and enforces the financial and other conditions imposed on PG&E Corporation when it became the Utility’s holding company and the extent to which the interpretation or enforcement of these conditions has a material impact on PG&E Corporation;

· the outcome of litigation, including litigation involving the application of various California wage and hour laws, and the extent to which PG&E Corporation or the Utility incurs costs and liabilities in connection with litigation that are not recoverable through rates, from insurance, or from other third parties;

· the ability of PG&E Corporation, the Utility, and counterparties to access capital markets and other sources of credit in a timely manner on acceptable terms;

· the impact of environmental laws and regulations and the costs of compliance and remediation;

· the loss of customers due to various forms of bypass and competition, including municipalization of the Utility’s electric distribution facilities, increasing levels of  “direct access” by which consumers procure electricity from alternative energy providers, and implementation of “community choice aggregation,” which permits cities and counties to purchase and sell electricity for their local residents and businesses;

· the outcome of federal or state tax audits and the impact of changes in federal or state tax laws, policies, or regulations; and

· other factors and risks discussed in PG&E Corporation and Pacific Gas and Electric Company’s 2009 Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission.

PG&E Corporation

Condensed Consolidated Statements of Income

(in millions, except per share amounts)

	(Unaudited)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
Operating Revenues
Electric	$	2,515		$	2,554		$	5,025		$	4,980
Natural gas		717			640			1,682			1,645
Total operating revenues		3,232			3,194			6,707			6,625
Operating Expenses
Cost of electricity		863			883			1,783			1,766
Cost of natural gas		247			188			742			745
Operating and maintenance		959			1,038			1,950			2,097
Depreciation, amortization, and decommissioning		468			429			919			848
Total operating expenses		2,537			2,538			5,394			5,456
Operating Income		695			656			1,313			1,169
Interest income		2			17			4			26
Interest expense		(175	)		(178	)		(343	)		(359	)
Other income (expense), net		2			22			(4	)		40
Income Before Income Taxes		524			517			970			876
Income tax provision		187			125			372			240
Net Income		337			392			598			636
Preferred stock dividend requirement of subsidiary		4			4			7			7
Income Available for Common Shareholders	$	333		$	388		$	591		$	629
Weighted Average Common Shares Outstanding, Basic		373			368			372			366
Weighted Average Common Shares Outstanding, Diluted		390			369			389			367
Net Earnings Per Common Share, Basic	$	0.88		$	1.03		$	1.56		$	1.68
Net Earnings Per Common Share, Diluted	$	0.86		$	1.02		$	1.54		$	1.67
Dividends Declared Per Common Share	$	0.46		$	0.42		$	0.91		$	0.84

Reconciliation of PG&E Corporation’s Earnings from Operations to Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (GAAP)

Second Quarter and Year-to-Date, 2010 vs. 2009

(in millions, except per share amounts)

	Three months ended June 30,												Six months ended June 30,
	Earnings						Earnings per Common Share (Diluted)						Earnings						Earnings per Common Share (Diluted)
	2010			2009			2010			2009			2010			2009			2010			2009
PG&E Corporation Earnings from Operations (1)	$	353		$	315		$	0.91		$	0.83		$	656		$	561		$	1.71		$	1.49
Items Impacting Comparability: (2)
Statewide ballot initiative (3)		(20	)		-			(0.05	)		-			(45	)		-			(0.12	)		-
Federal healthcare law (4)		-			-			-			-			(20	)		-			(0.05	)		-
Tax refund (5)		-			56			-			0.15			-			56			-			0.15
Recovery of hydro divestiture    costs (6)		-			28			-			0.07			-			28			-			0.07
Accelerated work on gas system (7)		-			(11	)		-			(0.03	)		-			(16	)		-			(0.04	)
PG&E Corporation Earnings on a GAAP basis	$	333		$	388		$	0.86		$	1.02		$	591		$	629		$	1.54		$	1.67

1.	“Earnings from operations” is not calculated in accordance with GAAP and excludes items impacting comparability as described in Note (2) below.
2.	Items impacting comparability reconcile earnings from operations with Consolidated Income Available for Common Shareholders as reported in accordance with GAAP.
3.	For the three and six months ended June 30, 2010, PG&E Corporation’s subsidiary, Pacific Gas and Electric Company contributed $20 million and $45 million, respectively, after-tax, to support Proposition 16 - The Taxpayers Right to Vote Act.
4.	For the six months ended June 30, 2010, Pacific Gas and Electric Company recognized a charge of $20 million, after-tax, triggered by the elimination of the tax deductibility of Medicare Part D federal subsidies.
5.	For the three and six months ended June 30, 2009, Pacific Gas and Electric Company recognized $56 million, after-tax, for the interest benefit related to a tax settlement.
6.	For the three and six months ended June 30, 2009, Pacific Gas and Electric Company recognized income of $28 million, after-tax, for the recovery of costs previously incurred in connection with Pacific Gas and Electric Company’s hydroelectric generation facilities.
7.	For the three and six months ended June 30, 2009, Pacific Gas and Electric Company incurred $11 million and $16 million, respectively, after-tax, of costs to perform accelerated system-wide natural gas integrity surveys and associated remedial work.

Reconciliation of Pacific Gas and Electric Company’s Earnings from Operations to Consolidated Income Available for Common Stock in Accordance with GAAP

Second Quarter and Year-to-Date, 2010 vs. 2009

(in millions)

	Three months ended June 30,						Six months ended June 30,
	Earnings						Earnings
	2010			2009			2010			2009
Pacific Gas and Electric Company   Earnings from Operations (1)	$	355		$	314		$	661		$	555
Items Impacting Comparability: (2)
Statewide ballot initiative (3)		(20	)		-			(45	)		-
Federal healthcare law (4)		-			-			(20	)		-
Tax Refund (5)		-			56			-			56
Recovery of hydro divestiture costs (6)		-			28			-			28
Accelerated work on gas system (7)		-			(11	)		-			(16	)
Pacific Gas and Electric Company Earnings   on a GAAP basis	$	335		$	387		$	596		$	623

1.	“Earnings from operations” is not calculated in accordance with GAAP and excludes items impacting comparability as described in Note (2) below.
2.	Items impacting comparability reconcile earnings from operations with Consolidated Income Available for Common Shareholders as reported in accordance with GAAP.
3.	For the three and six months ended June 30, 2010, Pacific Gas and Electric Company contributed $20 million and $45 million, after-tax, to support Proposition 16 - The Taxpayers Right to Vote Act.
4.	For the six months ended June 30, 2010, Pacific Gas and Electric Company recognized a charge of $20 million, after-tax, triggered by the elimination of the tax deductibility of Medicare Part D federal subsidies.
5.	For the three and six months ended June 30, 2009, Pacific Gas and Electric Company recognized income of $56 million, after-tax, for the interest benefit related to a tax settlement.
6.	For the three and six months ended June 30, 2009, Pacific Gas and Electric Company recognized $28 million, after-tax, for the recovery of costs previously incurred in connection with Pacific Gas and Electric Company’s hydroelectric generation facilities.
7.	For the three and six months ended June 30, 2009, Pacific Gas and Electric Company incurred $11 million and $16 million, respectively, after-tax, of costs to perform accelerated system-wide natural gas integrity surveys and associated remedial work.

Key Drivers of PG&E Corporation Earnings per Common Share from Operations

Second Quarter and Year-to-Date, 2010 vs. 2009

($/Share, Diluted)

Second Quarter 2009 EPS from Operations (1)	$	0.83
Increase in rate base revenues		0.05
Severance costs		0.01
Uncollectibles expense, net		0.01
Environmental Liability		0.01
Miscellaneous items		0.03
Market performance of benefit investment trusts		(0.02	)
Increase in shares outstanding		(0.01	)
Second Quarter 2010 EPS from Operations (1)	$	0.91

2009 YTD EPS from Operations (1)	$	1.49
Increase in rate base revenues		0.10
Nuclear Refueling Outage		0.06
Severance costs		0.03
Uncollectibles expense, net		0.02
Environmental Liability		0.01
Miscellaneous items		0.06
Storm and outage expenses (2)		(0.03	)
Increase in shares outstanding		(0.03	)
2010 YTD EPS from Operations (1)	$	1.71

1.	See Table 2 for a reconciliation of EPS from operations to EPS on a GAAP basis.
2.	Costs incurred due to storms and outages in Q1 2010

PG&E Corporation EPS Guidance

2010 EPS Guidance	Low			High
EPS Guidance on an Earnings from Operations Basis	$	3.35		$	3.50
Estimated Items Impacting Comparability (1)
Statewide ballot initiative (2)		(0.12	)		(0.12	)
Federal healthcare law (3)		(0.05	)		(0.05	)
Estimated EPS on a GAAP Basis	$	3.18		$	3.33

2011 EPS Guidance	Low		High
EPS Guidance on an Earnings from Operations Basis	$	3.65	$	3.85
Estimated Items Impacting Comparability		-		-
Estimated EPS on a GAAP Basis	$	3.65	$	3.85

1.	Items impacting comparability reconcile earnings from operations with Consolidated Income Available for Common Shareholders as reported in accordance with GAAP.
2.	Costs related to Proposition 16 – The Taxpayers’ Right to Vote Act.
3.	Reduction in the deferred tax asset corresponding to the loss of tax deductibility of Medicare Part D federal subsidies.

Management's guidance for PG&E Corporation’s 2010 and 2011 EPS from operations constitute forward-looking statements that are based on current expectations and assumptions that management believes are reasonable. These statements and assumptions are necessarily subject to various risks and uncertainties, the realization or resolution of which may be outside of management’s control. For a discussion of the factors that could cause actual results to differ materially see the factors listed in the attached press release and the discussion of risk factors in PG&E Corporation’s and Pacific Gas and Electric Company’s 2009 Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission.

EX-99.2

Exhibit 99.2

Table 1:    PG&E Corporation Business Priorities 2010

•   Improve reliability

•   Improve safety and human performance

•   Deliver on budget, on plan, and on purpose

•   Drive customer satisfaction

•   Champion effective regulatory and legislative policies

Table 2: Reconciliation of PG&E Corporation’s Earnings from Operations to Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (GAAP)

Second Quarter and Year-to-Date, 2010 vs. 2009

(in millions, except per share amounts)

	Three months ended June 30,												Six months ended June 30,
	Earnings						Earnings per Common Share (Diluted)						Earnings						Earnings per Common Share (Diluted)
	2010			2009			2010			2009			2010			2009			2010			2009
PG&E Corporation Earnings from Operations (1)	$	353		$	315		$	0.91		$	0.83		$	656		$	561		$	1.71		$	1.49
Items Impacting Comparability: (2)
Statewide ballot initiative (3)		(20	)		-			(0.05	)		-			(45	)		-			(0.12	)		-
Federal healthcare law (4)		-			-			-			-			(20	)		-			(0.05	)		-
Tax refund (5)		-			56			-			0.15			-			56			-			0.15
Recovery of hydro divestiture    costs (6)		-			28			-			0.07			-			28			-			0.07
Accelerated work on gas system (7)		-			(11	)		-			(0.03	)		-			(16	)		-			(0.04	)
PG&E Corporation Earnings on a GAAP basis	$	333		$	388		$	0.86		$	1.02		$	591		$	629		$	1.54		$	1.67

1.	“Earnings from operations” is not calculated in accordance with GAAP and excludes items impacting comparability as described in Note (2) below.
2.	Items impacting comparability reconcile earnings from operations with Consolidated Income Available for Common Shareholders as reported in accordance with GAAP.
3.	For the three and six months ended June 30, 2010, PG&E Corporation’s subsidiary, Pacific Gas and Electric Company contributed $20 million and $45 million, respectively, after-tax, to support Proposition 16 - The Taxpayers Right to Vote Act.
4.	For the six months ended June 30, 2010, Pacific Gas and Electric Company recognized a charge of $20 million, after-tax, triggered by the elimination of the tax deductibility of Medicare Part D federal subsidies.
5.	For the three and six months ended June 30, 2009, Pacific Gas and Electric Company recognized $56 million, after-tax, for the interest benefit related to a tax settlement.
6.	For the three and six months ended June 30, 2009, Pacific Gas and Electric Company recognized income of $28 million, after-tax, for the recovery of costs previously incurred in connection with Pacific Gas and Electric Company’s hydroelectric generation facilities.
7.	For the three and six months ended June 30, 2009, Pacific Gas and Electric Company incurred $11 million and $16 million, respectively, after-tax, of costs to perform accelerated system-wide natural gas integrity surveys and associated remedial work.

Table 3: Reconciliation of Pacific Gas and Electric Company’s Earnings from Operations to Consolidated Income Available for Common Stock in Accordance with GAAP

Second Quarter and Year-to-Date, 2010 vs. 2009

(in millions)

	Three months ended June 30,						Six months ended June 30,
	Earnings						Earnings
	2010			2009			2010			2009
Pacific Gas and Electric Company   Earnings from Operations (1)	$	355		$	314		$	661		$	555
Items Impacting Comparability: (2)
Statewide ballot initiative (3)		(20	)		-			(45	)		-
Federal healthcare law (4)		-			-			(20	)		-
Tax Refund (5)		-			56			-			56
Recovery of hydro divestiture costs (6)		-			28			-			28
Accelerated work on gas system (7)		-			(11	)		-			(16	)
Pacific Gas and Electric Company Earnings   on a GAAP basis	$	335		$	387		$	596		$	623

1.	“Earnings from operations” is not calculated in accordance with GAAP and excludes items impacting comparability as described in Note (2) below.
2.	Items impacting comparability reconcile earnings from operations with Consolidated Income Available for Common Shareholders as reported in accordance with GAAP.
3.	For the three and six months ended June 30, 2010, Pacific Gas and Electric Company contributed $20 million and $45 million, after-tax, to support Proposition 16 - The Taxpayers Right to Vote Act.
4.	For the six months ended June 30, 2010, Pacific Gas and Electric Company recognized a charge of $20 million, after-tax, triggered by the elimination of the tax deductibility of Medicare Part D federal subsidies.
5.	For the three and six months ended June 30, 2009, Pacific Gas and Electric Company recognized income of $56 million, after-tax, for the interest benefit related to a tax settlement.
6.	For the three and six months ended June 30, 2009, Pacific Gas and Electric Company recognized $28 million, after-tax, for the recovery of costs previously incurred in connection with Pacific Gas and Electric Company’s hydroelectric generation facilities.
7.	For the three and six months ended June 30, 2009, Pacific Gas and Electric Company incurred $11 million and $16 million, respectively, after-tax, of costs to perform accelerated system-wide natural gas integrity surveys and associated remedial work.

Table 4: Key Drivers of PG&E Corporation Earnings per Common Share from Operations

Second Quarter and Year-to-Date, 2010 vs. 2009

($/Share, Diluted)

Second Quarter 2009 EPS from Operations (1)	$	0.83
Increase in rate base revenues		0.05
Severance costs		0.01
Uncollectibles expense, net		0.01
Environmental Liability		0.01
Miscellaneous items		0.03
Market performance of benefit investment trusts		(0.02	)
Increase in shares outstanding		(0.01	)
Second Quarter 2010 EPS from Operations (1)	$	0.91

2009 YTD EPS from Operations (1)	$	1.49
Increase in rate base revenues		0.10
Nuclear Refueling Outage		0.06
Severance costs		0.03
Uncollectibles expense, net		0.02
Environmental Liability		0.01
Miscellaneous items		0.06
Storm and outage expenses (2)		(0.03	)
Increase in shares outstanding		(0.03	)
2010 YTD EPS from Operations (1)	$	1.71

1.	See Table 2 for a reconciliation of EPS from operations to EPS on a GAAP basis.
2.	Costs incurred due to storms and outages in Q1 2010

Table 5: PG&E Corporation Share Statistics

Second Quarter, 2010 vs. 2009

(shares in millions, except per share amounts)

	Second Quarter  2010		Second Quarter  2009		% Change
Common Stock Data
Book Value per share – end of period (1)	$	27.89	$	25.77		8.23%
Weighted average common shares outstanding, basic		373		368		1.36%
Employee share-based compensation		2		1		100%
Weighted average common shares outstanding, diluted		375		369		1.63%
9.5% Convertible Subordinated Notes (participating securities)		15		17		(11.76)%
Weighted average common shares outstanding and participating securities, diluted		390		386		1.04%

1. Common shareholders’ equity per common share outstanding at period end (includes the effect of participating securities).  

Source:  PG&E Corporation’s Condensed Consolidated Financial Statements and the Notes thereto included in PG&E Corporation's and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.

Table 6: Operational Performance Metrics

Second Quarter Year-to-Date Actual 2010 vs. Targets 2010

			2010
		Percentage Weight (1)	YTD Actual	YTD Target	EOY Target
1.	Earnings From Operations (in millions)	50%	$656	See note (2)	See note (2)
2.	Customer Satisfaction & Brand Health Index	15%	74.8	77.7	77.7
3.	Reliable Energy Delivery Index	15%	0.602	1.000	1.000
4.	Safety Index	10%	1.000	1.000	1.000
5.	Employee Engagement Premier Survey	5%	See note (3)	See note (3)	68.7%
6.	Environmental Leadership Index	5%	1.67	1.00	1.00

 1.    Represents weighting used in calculating PG&E Corporation Short-Term Incentive Plan performance for management employees.

 2.    Internal target not publicly disclosed but is consistent with publicly disclosed guidance for 2010 EPS from operations of $3.35-$3.50.

 3.    The Employee Engagement Premier Survey will be administered in October 2010 with results available in December 2010.

DEFINITIONS OF 2010 OPERATIONAL PERFORMANCE METRICS FROM TABLE 6:

1.	Earnings from Operations:
	Earnings from operations measures PG&E Corporation’s earnings power from ongoing core operations.  It allows investors to compare the underlying financial performance of the business from one period to another, exclusive of items that management believes do not reflect the normal course of operations (items impacting comparability).  The measurement is not in accordance with GAAP.  For a reconciliation of earnings from operations to earnings in accordance with GAAP, see Tables 2 and 3 above. The 2010 target for earnings from operations is not publicly reported but is consistent with PG&E Corporation’s publicly disclosed guidance range provided for 2010 EPS from operations of $3.35-$3.50.  For a reconciliation of 2010 EPS guidance on an earnings from operations basis to a GAAP basis, see Table 8.
2.	Customer Satisfaction & Brand Health Index:
	The Customer Satisfaction & Brand Health Index is a combination of a Customer Satisfaction Score, which has a 75 percent weighting and a Brand Favorability Score, which has a 25 percent weighting in the composite.  The Customer Satisfaction Score is a measure of overall satisfaction with PG&E’s operational performance in delivering services such as reliability, pricing of services, and customer service experience.  The Brand Favorability Score is a measure of the overall favorability towards the PG&E brand, and measures the emotional connection that customers have with the brand and is based on assessing perceptions regarding PG&E’s images, such as trust, heritage, and social responsibility.  The Customer Satisfaction & Brand Health Index measures residential, small business , and medium business customer perceptions with weightings of 60 percent for residential customers and 40 percent for business customers.  A higher index score indicates better performance in customer satisfaction and brand health.
3.	Reliable Energy Delivery Index:
	The Reliable Energy Delivery Index is a composite of three categories outlined below.  Overall, these metrics provide a balanced view on the number and duration of electric system unplanned interruptions and performance improvement in the resurvey of the gas system.  A higher index score indicates better performance in reliable energy delivery. 1.System Average Interruption Frequency Index (SAIFI) – 35% weight 2.Customer Average Interruption Duration Index (CAIDI) – 35% weight 3.Gas Leak Survey – 30% weight
4.	Safety Index:
	The Safety Index is a combination of the Occupational Safety & Health Administration (OSHA) Recordable Rate, which has a 75 percent weighting and the Motor Vehicle Incident (MVI) Rate, which has a 25 percent weighting in the composite.  The OSHA Recordable Rate measures the number of OSHA Recordable injuries, illnesses, or exposures that (1) satisfy OSHA requirements for recordability, and (2) occur in the current year.  In general, an injury must result in medical treatment beyond first aid or result in work restrictions, death, or loss of consciousness to be OSHA Recordable.  The rate measures how frequently OSHA Recordable cases occur for every 200,000 hours worked, or for approximately every 100 employees.  The MVI Rate measures the number of chargeable motor vehicle incidents per 1 milli on miles driven.  A chargeable incident is one where the Company driver could have prevented an incident, but failed to take reasonable steps to do so.  A higher index score indicates better safety performance.
5.	Employee Engagement Premier Survey:
	The Employee Engagement Score is derived by averaging the percent favorable responses to 40 survey items.  A higher score indicates better performance in employee engagement.
6.	Environmental Leadership Index:
	The Environmental Leadership Index is a combination of environmental compliance, which has a 50 percent weighting and operational footprint, which has a 50 percent weighting in the composite.  The environmental compliance is determined by the Notice of Violation (NOV) Rate which is defined as the rate of NOVs per 100 agency inspections.  The operational footprint is measured by reducing energy and water use, and increasing the diversion of solid waste at company facilities.  A higher index score indicates better performance in environmental leadership.

Table 7: Pacific Gas and Electric Company Operating Statistics

Second Quarter and Year-to-Date, 2010 vs. 2009

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Electric Sales (in millions kWh)
Residential		6,905			7,080			14,609			14,750
Commercial		8,119			8,178			15,556			15,572
Industrial		3,643			3,645			6,823			7,160
Agricultural		1,242			1,622			1,875			2,341
BART, public street and highway lighting		183			205			372			410
Sales from Energy Deliveries		20,092			20,730			39,235			40,233
Total Electric Customers at June 30								5,158,210			5,135,192
Bundled Gas Sales (in millions MCF)
Residential		43			39			121			120
Commercial		13			13			31			33
Total Bundled Gas Sales		56			52			152			153
Transportation Only		115			109			264			236
Total Gas Sales		171			161			416			389
Total Gas Customers at June 30								4,292,478			4,268,352
Sources of Electric Energy (in millions kWh)
Utility Generation
Nuclear		4,989			4,871			9,712			8,062
Hydro (net)		2,867			2,564			4,952			4,633
Fossil		542			629			1,669			1,333
Total Utility Generation		8,398			8,064			16,333			14,028
Purchased Power
Qualifying Facilities, including renewable resources		3,597			3,642			6,852			7,282
Irrigation Districts		1,170			1,054			1,610			1,355
Renewable Resources, excluding QF’s		2,009			1,458			3,566			2,650
Other Purchased Power		1,459			757			2,547			5,948
Spot Market Purchases/Sales, net		1,473			2,577			5,250			2,479
Total Purchased Power		9,708			9,488			19,825			19,714
Delivery from DWR		902			2,831			2,049			5,920
Delivery to Direct Access Customers		1,406			1,341			2,637			2,669
Other (includes energy loss)		(322	)		(994	)		(1,609	)		(2,098	)
Total Electric Energy Delivered		20,092			20,730			39,235			40,233
Diablo Canyon Performance
Overall capacity factor (including refuelings)		100	%		100	%		101	%		83	%
Refueling outage period	None			None			None			1/25/09-3/24/09
Refueling outage duration during the period (days)	None			None			None				58.0

Table 8: PG&E Corporation EPS Guidance

2010 EPS Guidance	Low			High
EPS Guidance on an Earnings from Operations Basis	$	3.35		$	3.50
Estimated Items Impacting Comparability (1)
Statewide ballot initiative (2)		(0.12	)		(0.12	)
Federal healthcare law (3)		(0.05	)		(0.05	)
Estimated EPS on a GAAP Basis	$	3.18		$	3.33

2011 EPS Guidance	Low		High
EPS Guidance on an Earnings from Operations Basis	$	3.65	$	3.85
Estimated Items Impacting Comparability		-		-
Estimated EPS on a GAAP Basis	$	3.65	$	3.85

1.    Items impacting comparability reconcile earnings from operations with Consolidated Income Available for Common Shareholders in Accordance with GAAP.

2.    Costs related to Proposition 16 – The Taxpayers’ Right to Vote Act.

3.    Reduction in the deferred tax asset corresponding to the loss of tax deductibility of Medicare Part D federal subsidies.

Management's statements regarding guidance for earnings from operations per common share for PG&E Corporation and general earnings sensitivities, constitute forward-looking statements that are based on current expectations and assumptions that management believes are reasonable, including that the Utility earns its authorized rate of return. These statements and assumptions are necessarily subject to various risks and uncertainties, the realization or resolution of which may be outside of management’s control. Actual results may differ materially. Factors that could cause actual results to differ materially include:

· the Utility’s ability to efficiently manage capital expenditures and its operating and maintenance expenses within authorized levels;

· the outcome of pending and future regulatory proceedings and whether the Utility is able to timely recover its costs through rates;

· the adequacy and price of electricity and natural gas supplies and whether the new day-ahead, hour-ahead, and real-time wholesale electricity markets established by the California Independent System Operator (“CAISO”) will continue to function effectively, the extent to which the Utility can manage and respond to the volatility of electricity and natural gas prices, and the ability of the Utility and its counterparties to post or return collateral;

· explosions, fires, accidents, mechanical breakdowns, the disruption of information technology and systems, and similar events that may occur while operating and maintaining an electric and natural gas system in a large service territory with varying geographic conditions that can cause unplanned outages, reduce generating output, damage the Utility’s assets or operations, subject the Utility to third-party claims for property damage or personal injury, or result in the imposition of civil, criminal, or regulatory fines or penalties on the Utility;

Table 8 (continued): PG&E Corporation EPS Guidance

· the impact of storms, earthquakes, floods, drought, wildfires, disease, and similar natural disasters, or acts of terrorism or vandalism, that affect customer demand or that damage or disrupt the facilities, operations, or information technology and systems owned by the Utility, its customers, or third parties on which the Utility relies;

· the potential impacts of climate change on the Utility’s electricity and natural gas businesses;

· changes in customer demand for electricity and natural gas resulting from unanticipated population growth or decline, general economic and financial market conditions, changes in technology that include the development of alternative technologies that enable customers to increase their reliance on self-generation, or other reasons;

· the occurrence of unplanned outages at the Utility’s two nuclear generating units at Diablo Canyon, the availability of nuclear fuel, the outcome of the Utility’s application to renew the operating licenses for Diablo Canyon, and potential changes in laws or regulations promulgated by the NRC or environmental agencies with respect to the storage of spent nuclear fuel, security, safety, or other matters associated with the operations at Diablo Canyon;

· whether the Utility earns incentive revenues or incurs obligations under incentive ratemaking mechanisms, such as the CPUC’s incentive ratemaking mechanism relating to energy savings achieved through implementation of the utilities’ customer energy efficiency programs;

· the impact of federal or state laws or regulations, or their interpretation, on energy policy and the regulation of utilities and their holding companies;

· whether the Utility can successfully implement its program to install advanced meters for its electric and natural gas customers and integrate the new meters with its customer billing and other systems, the outcome of the independent investigation ordered by the CPUC and the California Legislature into customer concerns about the new meters, and the ability of the Utility to implement various rate changes including “dynamic pricing” by offering electric rates that can vary with the customer’s time of use and are more closely aligned with wholesale electricity prices;

· how the CPUC interprets and enforces the financial and other conditions imposed on PG&E Corporation when it became the Utility’s holding company and the extent to which the interpretation or enforcement of these conditions has a material impact on PG&E Corporation;

· the outcome of litigation, including litigation involving the application of various California wage and hour laws, and the extent to which PG&E Corporation or the Utility incurs costs and liabilities in connection with litigation that are not recoverable through rates, from insurance, or from other third parties;

· the ability of PG&E Corporation, the Utility, and counterparties to access capital markets and other sources of credit in a timely manner on acceptable terms;

· the impact of environmental laws and regulations and the costs of compliance and remediation;

· the loss of customers due to various forms of bypass and competition, including municipalization of the Utility’s electric distribution facilities, increasing levels of  “direct access” by which consumers procure electricity from alternative energy providers, and implementation of “community choice aggregation,” which permits cities and counties to purchase and sell electricity for their local residents and businesses;

· the outcome of federal or state tax audits and the impact of changes in federal or state tax laws, policies, or regulations; and

· other factors and risks discussed in PG&E Corporation and Pacific Gas and Electric Company’s 2009 Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission.

Table 9: General Earnings Sensitivities

PG&E Corporation and Pacific Gas and Electric Company

Variable	Description of Change	Estimated 2010 Earnings Impact	Estimated 2011 Earnings Impact
Rate base	+/- $100 million change in rate base	+/- $6 million	+/- $6 million
Return on equity (ROE)	+/- 0.1% change in allowed ROE	+/- $11 million	+/- $13 million
Share count	+/- 1% change in average shares	+/- $.03 per share	+/- $.04 per share
Revenues	+/- $7 million change in at-risk revenue (pre-tax), including Electric Transmission and California Gas Transmission	+/- $.01 per share	+/- $.01 per share

These general earnings sensitivities that may affect 2010 and 2011 earnings are forward-looking statements that are based on various assumptions that may prove to be inaccurate.  Actual results may differ materially.  For a discussion of the factors that may affect future results, see Table 8.

Table 10: Cash Flow Sources and Uses

Year-to-Date 2010

PG&E Corporation Consolidated

(in millions)

Cash and Cash Equivalents, December 31, 2009	$	527
Sources of Cash
Cash from operations	$	1,373
Decrease in restricted cash		50
Net proceeds from issuance of commercial paper		693
Net proceeds from issuance of long-term debt		295
Borrowings under revolving credit facilities		30
Common stock issued		89
Other		7
	$	2,537
Uses of Cash
Capital expenditures	$	1,786
Investments in and proceeds from nuclear decommissioning trust, net		11
Energy recovery bonds matured		182
Short-term debt matured		500
Common stock dividends paid		320
	$	2,799
Cash and Cash Equivalents, June 30, 2010	$	265

Source:  PG&E Corporation’s Condensed Consolidated Statement of Cash Flows included in PG&E Corporation's and Pacific Gas and Electric Company’s combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.

Table 11: PG&E Corporation's and Pacific Gas and Electric Company’s Consolidated Cash Position

Second Quarter, 2010 vs. 2009

(in millions)

	2010			2009		Change
Cash Flow from Operating Activities (YTD June 30)
PG&E Corporation	$	(9	)	$	104	$	(113	)
Pacific Gas and Electric Company		1,382			1,650		(268	)
		1,373		$	1,754	$	(381	)
Consolidated Cash Balance (at June 30)
PG&E Corporation		205		$	180	$	25
Pacific Gas and Electric Company		60			158		(98	)
	$	265		$	338	$	(73	)
Consolidated Restricted Cash Balance (at June 30)
PG&E Corporation	$	-		$	-	$	-
Pacific Gas and Electric Company (1)		596			1,296	$	(700	)
	$	596		$	1,296	$	(700	)

 1.    Includes $13 million and $11 million of restricted cash classified as other noncurrent assets – other in the Condensed Consolidated Balance Sheets at June 30, 2010 and 2009, respectively.

Source:  PG&E Corporation's and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements included in PG&E Corporation’s and Pacific Gas and Electric Company’s combined Quarterly Report on Form 10-Q for the quarters ended June 30, 2010 and 2009.

Table 12: PG&E Corporation's and Pacific Gas and Electric Company’s Long-Term Debt

Second Quarter 2010 vs. Year-End 2009

(in millions)

	Balance at
	June 30,  2010		December 31, 2009
PG&E Corporation
Convertible subordinated notes, 9.50%, due 2010	$	-	$	247
Less: current portion		-		(247)
Total convertible subordinated notes		-		-
Senior notes, 5.75%, due 2014		350		350
Unamortized discount		(2)		(2)
Total senior notes		348		348
Total PG&E Corporation long-term debt, net of current portion		348		348
Utility
Senior notes:
4.20% due 2011		500		500
6.25% due 2013		400		400
4.80% due 2014		1,000		1,000
5.625% due 2017		700		700
8.25% due 2018		800		800
6.05% due 2034		3,000		3,000
5.80% due 2037		950		700
6.35% due 2038		400		400
6.25% due 2039		550		550
5.40% due 2040		550		550
Less: current portion		(500)		-
Unamortized discount, net of premium		(37)		(35)
Total senior notes		8,313		8,565
Pollution control bonds:
Series 1996 C, E, F, 1997 B, variable rates(1), due 2026(2)		614		614
Series 1996 A, 5.35%, due 2016		200		200
Series 2004 A-D, 4.75%, due 2023		345		345
Series 2008 G and F, 3.75%(3), due 2018 and 2026		95		95
Series 2009 A-D, variable rates(4), due 2016 and 2026(5)		309		309
Series 2010 E, 2.25%, due 2026(6)		50		-
Less: current portion		(95)		(95)
Total pollution control bonds		1,518		1,468
Total Utility long-term debt, net of current portion		9,831		10,033
Total consolidated long-term debt, net of current portion	$	10,179	$	10,381
(1)  At June 30, 2010, interest rates on these bonds and the related loans ranged from 0.10% to 0.18%.
(2)  Each series of these bonds is supported by a separate letter of credit that expires on February 26, 2012.  Although the stated maturity date is 2026, each series will remain outstanding only if the Utility extends or replaces the letter of credit related to the series or otherwise obtains consent from the issuer to the continuation of the series without a credit facility.
(3) These bonds bear interest at 3.75% per year through September 19, 2010, are subject to mandatory tender on September 20, 2010, and may be remarketed in a fixed or variable rate mode.
(4) At June 30, 2010, interest rates on these bonds and the related loans ranged from 0.10% to 0.13%.
(5) Each series of these bonds is supported by a separate direct-pay letter of credit that expires on October 29, 2011.  The Utility may choose to provide a substitute letter of credit for any series of these bonds, subject to a rating requirement.
(6) These bonds bear interest at 2.25% per year through April 1, 2012, are subject to mandatory tender on April 2, 2012, and may be remarketed in a fixed or variable rate mode.

Table 13: PG&E Corporation's and Pacific Gas and Electric Company's Repayment Schedule and Interest Rates - Long-Term Debt and Energy Recovery Bonds as of June 30, 2010

(in millions, except interest rates)

	2010	2011	2012	2013	2014	Thereafter	Total
LONG-TERM DEBT:
PG&E Corporation
Average fixed interest rate	-	-	-	-	5.75%	-	5.75%
Fixed rate obligations	-	-	-	-	$ 350	-	$ 350
Utility
Average fixed interest rate	3.75%	4.20%	2.25%	6.25%	4.80%	6.12%	5.84%
Fixed rate obligations	$ 95	$ 500	$ 50	$ 400	$ 1,000	$ 7,495	$ 9,540
Variable interest rate as of June 30, 2010	-	0.12%	0.13%	-	-	-	0.13%
Variable rate obligations	-	$ 309(1)	$ 614(2)	-	-	-	$ 923
Less: current portion	(95)	(500)	-	-	-	-	(595)
Total consolidated long-term debt	$ -	$ 309	$ 664	$ 400	$ 1,350	$ 7,495	$ 10,218
(1) These bonds, due from 2016 through 2026, are backed by a direct-pay letter of credit that expires on October 29, 2011.  The bonds will be subject to a mandatory redemption unless the letter of credit is extended or replaced or the issuer consents to the continuation of these series without a credit facility.  Accordingly, the bonds have been classified for repayment purposes in 2011.
(2) These bonds, due in 2026, are backed by letters of credit that expire on February 26, 2012.  The bonds will be subject to a mandatory redemption unless the letters of credit are extended or replaced.  Accordingly, the bonds have been classified for repayment purposes in 2012.

ENERGY RECOVERY BONDS (3):	2010		2011		2012		Total
Utility
Average fixed interest rate		4.55%		4.59%		4.66%		4.61%
Energy recovery bonds	$	204	$	404	$	423	$	1,031
(3) These bonds were issued by PG&E Energy Recovery Funding LLC (“PERF”), a wholly owned consolidated subsidiary of Pacific Gas and Electric Company.  The proceeds were used by PERF to purchase from Pacific Gas and Electric Company the right, known as "recovery property," to be paid a specified amount from a dedicated rate component to be collected from Pacific Gas and Electric Company’s electricity customers.  While PERF is a wholly owned subsidiary of Pacific Gas and Electric Company, it is legally separate from Pacific Gas and Electric Company.  The assets, including the recovery property, of PERF are not available to creditors of PG&E Corporatio n or Pacific Gas and Electric Company, and the recovery property is not legally an asset of PG&E Corporation or Pacific Gas and Electric Company.

Table 14: Pacific Gas and Electric Company

Docket Numbers of Selected Regulatory Cases

Name Brief Description Docket Number

Transmission Owner (“TO”) 13 Rate Case	On July 28, 2010, the Utility filed an application at the FERC requesting the FERC authorize a retail revenue requirement of $1.026 billion, a $151 million increase over the rates included in the FERC approved settlement discussed below. This increase is largely driven by the Utility’s expectation to make investments of $765 million in 2010 and $810 million in 2011 in various capital projects, including projects to add additional transmission capacity, expand automation technology, improve overall system reliability and maintenance and replace equipment at substations.  The Utility requested that new rates become effective on October 1, 2010.  In accordance with past practice, the Utility expects that the FERC will suspend the requested increase for an additional five months which would result in a March 1, 2011 effective date.	ER10-2026-000
2010 Long Term Procurement Plan (“LTPP”)	This is a CPUC proceeding to ensure a reliable and cost-effective electricity supply in California through integration and refinement of a comprehensive set of procurement policies, practices and procedures underlying long-term procurement plans.  This Order establishes a multi-track proceeding with decisions for Track I, II, and III scheduled for 2011 or as appropriate.	R.10-05-006
Nuclear Relicensing	On January 29, 2010, the Utility filed an application with the CPUC to recover the costs associated with renewal of the Diablo Canyon Power Plant (“DCPP”) operating licenses for Units 1 and 2 for an additional 20 years to 2044 and 2045.  The application requests authority to recover in rates, starting January 1, 2015, an initial revenue requirement of $21.6 million for costs associated with obtaining the federal and state approvals required to seek license renewal.  On June 23, 2010, a ruling was issued confirming the scope of issues to be addressed in the CPUC proceeding and setting the procedural schedule.  Evidentiary hearings are scheduled for October 11-15, 2010 with a final decision expected in May 2011.	A.10-01-022
2011 General Rate Case (“GRC”)	On December 21, 2009, the Utility filed its 2011 GRC to determine the amount of base revenues that the Utility may collect in rates to recover costs for the Utility’s gas and electric distribution and electric generation operations for the period 2011 to 2013.  The Utility has requested a final decision from the CPUC by the end of 2010.  On March 22, 2010, the Utility filed its 2011 GRC Phase 2 application, proposing to revise its electric marginal costs, revenue allocation, and rate design.  In addition, the Utility proposes to implement voluntary Real Time Pricing rates by May 2012 or 12 months after the CPUC issues the final decision, whichever is later.	A.09-12-020 A.10-03-014
Manzana Wind Project	On December 3, 2009, the Utility requested that the CPUC approve: (1) a purchase and sale agreement to acquire the Manzana wind project from Iberdrola Renewables, Inc. and (2) a project completion agreement under which a subsidiary of Iberdrola will develop and construct the project.  The Utility estimates that it would incur capital costs of approximately $900 million for the project. The Utility has requested a final decision from the CPUC by September 2010.	A.09-12-002

Table 14 (continued): Pacific Gas and Electric Company

Docket Numbers of Selected Regulatory Cases

Name Brief Description Docket Number

Request for new Generation Offers and Potential New Utility-Owned Generation	On July 29, 2010, the CPUC determined that PG&E should procure between 950 – 1,000 MW of new generation resources.  The final decision approved the Marsh Landing, Contra Costa 6 & 7, and Midway Sunset power purchase agreements, while denying the Oakley Project purchase and sales agreement.	R.06-02-013 A.09-04-001 A.09-09-021
2011 Gas Transmission and Storage Rate Case	On September 18, 2009, the Utility filed an application with the CPUC to determine the rates, terms, and conditions of the Utility’s gas transmission and storage services beginning January 1, 2011.  A final decision is expected in late 2010.	A.09-09-013
Transmission Owner (“TO”) 12 Rate Cases	On July 27, 2010, FERC approved an uncontested settlement of the Utility’s TO rate case that was originally filed on July 30, 2009.  The settlement sets an annual retail base revenue requirement of $875 million effective March 1, 2010.  The Utility has been reserving the difference between expected revenues based on rates requested in the TO rate application and expected revenues based on rates proposed in the settlement.  PG&E will refund any over-collected amounts to customers, with interest, through an adjustment to rates in 2011.	ER.09-1521-000
Photovoltaic Program	On April 22, 2010, the CPUC approved the Utility’s five-year program to (1) develop up to 250 MW of Utility-owned renewable generation resources based on solar photovoltaic (“PV”) technology for an aggregate cost of up to $1.5 billion and (2) execute power purchase agreements for up to 250 MW of PV projects to be developed by independent power producers.  The Utility-owned portion of the PV facilities is subject to traditional rate base treatment.	A.09-02-019 D.10-04-052
Energy Efficiency Order Instituting Rulemaking  Post-2005	This is a CPUC proceeding to establish incentive ratemaking mechanisms for implementation of the California utilities’ energy efficiency programs and to resolve the utilities’ claims for 2006-2008 shareholder incentives.  The CPUC has awarded the Utility $33.4 million in incentive revenues for energy savings achieved over the 2006-2008 program cycle. Any additional incentive award for the 2006-2008 cycle is subject to verification and the final true-up process expected to be completed in 2010.  The CPUC has not yet determined the incentive mechanism that will apply to energy efficiency programs in 2009 and future years.	R.09-01-019 D.09-12-045

Table 14 (continued): Pacific Gas and Electric Company

Docket Numbers of Selected Regulatory Cases

Name Brief Description Docket Number

SmartGrid Order Instituting Rulemaking	This is a CPUC proceeding to consider the development of SmartGrid technologies in California and to establish procedures for SCE, PG&E and SDG&E to obtain CPUC approval for Smart Grid-related investments through general rate cases or individual applications.  On June 24, 2010, the CPUC issued a decision which requires SCE, PG&E and SDG&E to submit SmartGrid deployment plans by July 1, 2011.  The plans should present a vision, strategy, and roadmap for how the SmartGrid will enable consumers to capture the benefits of a wide range of energy technologies, products, and services while protecting consumers’ privacy.  This rulemaking proceeding will have additional phases in 2010 and 2011.	R.08-12-009 D.09-12-046
Proposed Electric Distribution Reliability Program (Cornerstone Improvement Program)	On June 24, 2010, the CPUC approved the Utility to implement electric distribution reliability improvement projects and incur capital expenditures of approximately $357 million in capital and $9 million in expense beginning in 2010 and continuing through 2013. Although the CPUC determined that the Utility had not demonstrated the need for the entirety of its proposed $2 billion six-year electric distribution reliability improvement program, the CPUC has authorized the Utility to submit additional program requests in the 2014 GRC.	A.08-05-023 D.10-06-048

Most of these regulatory cases are discussed in PG&E Corporation's and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, or PG&E Corporation's and Pacific Gas and Electric Company’s combined Annual Report on Form 10-K for the year ended December 31, 2009.

Table 15: PG&E Corporation

Condensed Consolidated Statements of Income

(in millions, except per share amounts)

	(Unaudited)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
Operating Revenues
Electric	$	2,515		$	2,554		$	5,025		$	4,980
Natural gas		717			640			1,682			1,645
Total operating revenues		3,232			3,194			6,707			6,625
Operating Expenses
Cost of electricity		863			883			1,783			1,766
Cost of natural gas		247			188			742			745
Operating and maintenance		959			1,038			1,950			2,097
Depreciation, amortization, and decommissioning		468			429			919			848
Total operating expenses		2,537			2,538			5,394			5,456
Operating Income		695			656			1,313			1,169
Interest income		2			17			4			26
Interest expense		(175	)		(178	)		(343	)		(359	)
Other income (expense), net		2			22			(4	)		40
Income Before Income Taxes		524			517			970			876
Income tax provision		187			125			372			240
Net Income		337			392			598			636
Preferred stock dividend requirement of subsidiary		4			4			7			7
Income Available for Common Shareholders	$	333		$	388		$	591		$	629
Weighted Average Common Shares Outstanding, Basic		373			368			372			366
Weighted Average Common Shares Outstanding, Diluted		390			369			389			367
Net Earnings Per Common Share, Basic	$	0.88		$	1.03		$	1.56		$	1.68
Net Earnings Per Common Share, Diluted	$	0.86		$	1.02		$	1.54		$	1.67
Dividends Declared Per Common Share	$	0.46		$	0.42		$	0.91		$	0.84

Source:  PG&E Corporation's and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation's and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.

Table 16: PG&E Corporation

Condensed Consolidated Balance Sheets

(in millions)

	(Unaudited)
	Balance At
	June 30,			December 31,
	2010			2009
ASSETS
Current Assets
Cash and cash equivalents	$	265		$	527
Restricted cash		583			633
Accounts receivable:
Customers (net of allowance for doubtful accounts of $71 at June 30, 2010 and $68 at December 31, 2009)		846			859
Accrued unbilled revenue		722			671
Regulatory balancing accounts		1,369			1,109
Other		759			750
Inventories:
Gas stored underground and fuel oil		142			114
Materials and supplies		192			200
Income taxes receivable		-			127
Prepaid expenses and other		734			667
Total current assets		5,612			5,657
Property, Plant, and Equipment
Electric		31,408			30,481
Gas		10,971			10,697
Construction work in progress		2,149			1,888
Other		14			14
Total property, plant, and equipment		44,542			43,080
Accumulated depreciation		(14,559	)		(14,188	)
Net property, plant, and equipment		29,983			28,892
Other Noncurrent Assets
Regulatory assets ($944 and $1,124 related to Energy Recovery Bonds at June 30, 2010 and December 31, 2009, respectively)		5,610			5,522
Nuclear decommissioning trusts		1,854			1,899
Income taxes receivable		693			596
Other		466			379
Total other noncurrent assets		8,623			8,396
TOTAL ASSETS	$	44,218		$	42,945

Source:  PG&E Corporation's and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation's and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.

Table 16 (continued): PG&E Corporation

Condensed Consolidated Balance Sheets

(in millions, except share amounts)

	(Unaudited)
	Balance At
	June 30,			December 31,
	2010			2009
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings	$	1,057		$	833
Long-term debt, classified as current		595			342
Energy recovery bonds, classified as current		395			386
Accounts payable:
Trade creditors		920			984
Disputed claims and customer refunds		746			773
Regulatory balancing accounts		437			281
Other		356			349
Interest payable		839			818
Income taxes payable		634			214
Deferred income taxes		403			332
Other		1,237			1,501
Total current liabilities		7,619			6,813
Noncurrent Liabilities
Long-term debt		10,179			10,381
Energy recovery bonds		636			827
Regulatory liabilities		4,275			4,125
Pension and other postretirement benefits		2,018			1,773
Asset retirement obligations		1,600			1,593
Deferred income taxes		4,637			4,732
Other		2,131			2,116
Total noncurrent liabilities		25,476			25,547
Commitments and Contingencies
Equity
Shareholders’ Equity
Preferred stock, no par value, authorized 80,000,000 shares, $100 par value, authorized 5,000,000 shares, none issued		-			-
Common stock, no par value, authorized 800,000,000 shares, 390,103,473 shares outstanding (including 476,312 restricted shares) at June 30, 2010 and 371,272,457 shares outstanding (including 670,552 restricted shares) at December 31, 2009		6,646			6,280
Reinvested earnings		4,457			4,213
Accumulated other comprehensive loss		(232	)		(160	)
Total shareholders’ equity		10,871			10,333
Noncontrolling Interest – Preferred Stock of Subsidiary		252			252
Total equity		11,123			10,585
TOTAL LIABILITIES AND EQUITY	$	44,218		$	42,945

Source:  PG&E Corporation's and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation's and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.

Table 17: PG&E Corporation

Condensed Consolidated Statements of Cash Flows

(in millions)

	(Unaudited)
	Six Months Ended
	June 30,
	2010			2009
Cash Flows from Operating Activities
Net income	$	598		$	636
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and decommissioning		1,038			944
Allowance for equity funds used during construction		(57	)		(47	)
Deferred income taxes and tax credits, net		(3	)		377
Other changes in noncurrent assets and liabilities		(97	)		(46	)
Effect of changes in operating assets and liabilities:
Accounts receivable		(47	)		198
Inventories		(20	)		113
Accounts payable		7			(143	)
Income taxes receivable/payable		458			161
Regulatory balancing accounts, net		(206	)		(228	)
Other current assets		28			10
Other current liabilities		(326	)		(224	)
Other		-			3
Net cash provided by operating activities		1,373			1,754
Cash Flows from Investing Activities
Capital expenditures		(1,786	)		(2,077	)
Decrease in restricted cash		50			15
Proceeds from sales and maturities of nuclear decommissioning trust investments		685			954
Purchases of nuclear decommissioning trust investments		(696	)		(985	)
Other		4			12
Net cash used in investing activities		(1,743	)		(2,081	)
Cash Flows from Financing Activities
Borrowings under revolving credit facilities		30			300
Repayments under revolving credit facilities		-			(300	)
Net issuance (repayments) of commercial paper, net of discount of $1 in 2010 and $3 in 2009		693			(47	)
Proceeds from issuance of short-term debt, net of issuance costs of $1 in 2009		-			499
Proceeds from issuance of long-term debt, net of discount and issuance costs of $5 in 2010 and $16 in 2009		295			884
Short-term debt matured		(500	)		-
Long-term debt matured		-			(600	)
Energy recovery bonds matured		(182	)		(174	)
Common stock issued		89			182
Common stock dividends paid		(320	)		(286	)
Other		3			(12	)
Net cash provided by financing activities		108			446
Net change in cash and cash equivalents		(262	)		119
Cash and cash equivalents at January 1		527			219
Cash and cash equivalents at June 30	$	265		$	338

Source:  PG&E Corporation's and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation's and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.

Table 17 (continued): PG&E Corporation

Condensed Consolidated Statements of Cash Flows

(in millions)

Supplemental disclosures of cash flow information
Cash received (paid) for:
Interest, net of amounts capitalized	$	(309	)	$	(298	)
Income taxes, net		36			201
Supplemental disclosures of noncash investing and financing activities
Common stock dividends declared but not yet paid	$	178		$	155
Capital expenditures financed through accounts payable		209			245
Noncash common stock issuances		253			39

Source:  PG&E Corporation's and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation's and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.

Table 18: Pacific Gas and Electric Company

Condensed Consolidated Statements of Income

(in millions)

	(Unaudited)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
Operating Revenues
Electric	$	2,515		$	2,554		$	5,025		$	4,980
Natural gas		717			640			1,682			1,645
Total operating revenues		3,232			3,194			6,707			6,625
Operating Expenses
Cost of electricity		863			883			1,783			1,766
Cost of natural gas		247			188			742			745
Operating and maintenance		958			1,037			1,948			2,096
Depreciation, amortization, and decommissioning		468			429			919			848
Total operating expenses		2,536			2,537			5,392			5,455
Operating Income		696			657			1,315			1,170
Interest income		2			17			4			26
Interest expense		(164	)		(166	)		(320	)		(339	)
Other income (expense), net		1			15			(5	)		36
Income Before Income Taxes		535			523			994			893
Income tax provision		196			132			391			263
Net Income		339			391			603			630
Preferred stock dividend requirement		4			4			7			7
Income Available for Common Stock	$	335		$	387		$	596		$	623

Source:  PG&E Corporation's and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation's and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.

Table 19: Pacific Gas and Electric Company

Condensed Consolidated Balance Sheets

(in millions)

	(Unaudited)
	Balance At
	June 30,			December 31,
	2010			2009
ASSETS
Current Assets
Cash and cash equivalents	$	60		$	334
Restricted cash		583			633
Accounts receivable:
Customers (net of allowance for doubtful accounts of $71 at June 30, 2010 and $68 at December 31, 2009)		846			859
Accrued unbilled revenue		722			671
Regulatory balancing accounts		1,369			1,109
Other		794			751
Inventories:
Gas stored underground and fuel oil		142			114
Materials and supplies		192			200
Income taxes receivable		-			138
Prepaid expenses and other		733			662
Total current assets		5,441			5,471
Property, Plant, and Equipment
Electric		31,408			30,481
Gas		10,971			10,697
Construction work in progress		2,149			1,888
Total property, plant, and equipment		44,528			43,066
Accumulated depreciation		(14,546	)		(14,175	)
Net property, plant, and equipment		29,982			28,891
Other Noncurrent Assets
Regulatory assets ($944 and $1,124 related to Energy Recovery Bonds at June 30, 2010 and December 31, 2009, respectively)		5,610			5,522
Nuclear decommissioning trusts		1,854			1,899
Income taxes receivable		740			610
Other		368			316
Total other noncurrent assets		8,572			8,347
TOTAL ASSETS	$	43,995		$	42,709

Source:  PG&E Corporation's and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation's and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.

Table 19 (continued): Pacific Gas and Electric Company

Condensed Consolidated Balance Sheets

(in millions, except share amounts)

	(Unaudited)
	Balance At
	June 30,			December 31,
	2010			2009
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Short-term borrowings	$	1,027		$	833
Long-term debt, classified as current		595			95
Energy recovery bonds, classified as current		395			386
Accounts payable:
Trade creditors		920			984
Disputed claims and customer refunds		746			773
Regulatory balancing accounts		437			281
Other		367			363
Interest payable		834			813
Income tax payable		662			223
Deferred income taxes		409			334
Other		1,032			1,307
Total current liabilities		7,424			6,392
Noncurrent Liabilities
Long-term debt		9,831			10,033
Energy recovery bonds		636			827
Regulatory liabilities		4,275			4,125
Pension and other postretirement benefits		1,960			1,717
Asset retirement obligations		1,600			1,593
Deferred income taxes		4,688			4,764
Other		2,099			2,073
Total noncurrent liabilities		25,089			25,132
Commitments and Contingencies
Shareholders’ Equity
Preferred stock without mandatory redemption provisions:
Nonredeemable, 5.00% to 6.00%, 5,784,825 shares outstanding at June 30, 2010 and December 31, 2009		145			145
Redeemable, 4.36% to 5.00%, 4,534,958 shares outstanding at June 30, 2010 and December 31, 2009		113			113
Common stock, $5 par value, authorized 800,000,000 shares, 264,374,809 shares outstanding at June 30, 2010 and December 31, 2009		1,322			1,322
Additional paid-in capital		3,186			3,055
Reinvested earnings		6,942			6,704
Accumulated other comprehensive loss		(226	)		(154	)
Total shareholders’ equity		11,482			11,185
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	43,995		$	42,709

Source:  PG&E Corporation's and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation's and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.

Table 20: Pacific Gas and Electric Company

Condensed Consolidated Statements of Cash Flows

(in millions)

	(Unaudited)
	Six Months Ended
	June 30,
	2010			2009
Cash Flows from Operating Activities
Net income	$	603		$	630
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and decommissioning		1,016			932
Allowance for equity funds used during construction		(57	)		(47	)
Deferred income taxes and tax credits, net		(1	)		368
Other changes in noncurrent assets and liabilities		(63	)		(34	)
Effect of changes in operating assets and liabilities:
Accounts receivable		(81	)		199
Inventories		(20	)		113
Accounts payable		4			(140	)
Income taxes receivable/payable		475			64
Regulatory balancing accounts, net		(206	)		(228	)
Other current assets		28			10
Other current liabilities		(316	)		(220	)
Other		-			3
Net cash provided by operating activities		1,382			1,650
Cash Flows from Investing Activities
Capital expenditures		(1,786	)		(2,077	)
Decrease in restricted cash		50			15
Proceeds from sales and maturities of nuclear decommissioning trust investments		685			954
Purchases of nuclear decommissioning trust investments		(696	)		(985	)
Other		11			5
Net cash used in investing activities		(1,736	)		(2,088	)
Cash Flows from Financing Activities
Borrowings under revolving credit facilities		-			300
Repayments under revolving credit facilities		-			(300	)
Net issuance (repayments) of commercial paper, net of discount of $1 in 2010 and $3 in 2009		693			(47	)
Proceeds from issuance of short-term debt, net of issuance costs of $1 in 2009		-			499
Proceeds from issuance of long-term debt, net of discount and issuance costs of $5 in 2010 and $12 in 2009		295			538
Short-term debt matured		(500	)		-
Long-term debt matured		-			(600	)
Energy recovery bonds matured		(182	)		(174	)
Preferred stock dividends paid		(7	)		(7	)
Common stock dividends paid		(358	)		(312	)
Equity contribution		130			653
Other		9			(6	)
Net cash provided by financing activities		80			544
Net change in cash and cash equivalents		(274	)		106
Cash and cash equivalents at January 1		334			52
Cash and cash equivalents at June 30	$	60		$	158

Source:  PG&E Corporation's and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation's and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.

Table 20 (continued): Pacific Gas and Electric Company

Condensed Consolidated Statements of Cash Flows

(in millions)

Supplemental disclosures of cash flow information
Cash received (paid) for:
Interest, net of amounts capitalized	$	(287	)	$	(286	)
Income taxes, net		34			70
Supplemental disclosures of noncash investing and financing activities
Capital expenditures financed through accounts payable	$	209		$	245

Source:  PG&E Corporation's and Pacific Gas and Electric Company’s Condensed Consolidated Financial Statements and Notes thereto included in PG&E Corporation's and Pacific Gas and Electric Company's combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.