Derivatives and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2011

Derivatives and Hedging Activities

Volume of Outstanding Derivative Contracts

		Contract Volume (1)
Underlying Product	Instruments	Less Than 1 Year		Greater Than 1 Year but Less Than 3 Years		Greater Than 3 Years but Less Than 5 Years		Greater Than 5 Years (2)
Natural Gas (3) (MMBtus (4))	Forwards and Swaps		334,357,146		260,860,000		11,140,000		-
	Options		238,196,542		269,857,756		31,200,000		-
Electricity (Megawatt-hours)	Forwards and Swaps		4,918,603		6,089,912		2,914,999		4,316,760
	Options		3,284		64,584		264,348		331,560
	Congestion Revenue Rights		58,509,308		72,571,815		72,649,100		80,367,091

⁽¹⁾  Amounts shown reflect the total gross derivative volumes by commodity type that are expected to settle in each time period.

⁽²⁾  Derivatives in this category expire between 2016 and 2022.

⁽³⁾ Amounts shown are for the combined positions of the electric and core gas portfolios.

⁽⁴⁾ Million British Thermal Units.

Outstanding Derivative Balances

		Netting (2)		Netting (2)		Netting (2)		Netting (2)
	Gross Derivative     Balance (1)		Netting (2)		Cash     Collateral (2)		Total Derivative     Balances
(in millions)	Commodity Risk (PG&E Corporation and the Utility)
Current assets – other		56		(41)		204		219
Other noncurrent assets – other		139		(104)		-		35
Current liabilities – other		(367)		41		145		(181)
Noncurrent liabilities – other		(411)		104		29		(278)
Total commodity risk		(583)		-		378		(205)

⁽¹⁾ See Note 8 of the Notes to the Condensed Consolidated Financial Statements for a discussion of the valuation techniques used to calculate the fair
value of these instruments.

⁽²⁾ Positions and cash collateral, by counterparty, are netted where the intent and legal right to offset exist in accordance with master netting agreements.

	Gross Derivative     Balance  (1)		Netting (2)		Cash     Collateral (2)		Total Derivative     Balances
(in millions)	Commodity Risk (PG&E Corporation and the Utility)
Current assets –other		$ 56		$ (45)		$ 79		$ 90
Other noncurrent assets – other		77		(62)		96		111
Current liabilities – other		(388)		45		119		(224)
Noncurrent liabilities – other		(486)		62		130		(294)
Total commodity risk		$ (741)		$ -		$ 424		$ (317)

⁽¹⁾ See Note 8 of the Notes to the Condensed Consolidated Financial Statements for a discussion of the valuation techniques used to calculate the fair value of these instruments.

⁽²⁾ Positions and cash collateral, by counterparty, are netted where the intent and legal right to offset exist in accordance with master netting agreements.

Gains and Losses on Derivative Instruments

	Commodity Risk (PG&E Corporation and Utility)
	Three months ended June 30,				Six months ended June 30,
(in millions)	2011		2010		2011		2010
Unrealized gain/(loss) - regulatory assets and liabilities (1)		$ 21		$ 18		$ 158		$ (271)
Realized gain/(loss) - cost of electricity (2)		(122)		(175)		(258)		(281)
Realized gain/(loss) - cost of natural gas (2)		(6)		(5)		(61)		(44)
Total commodity risk instruments		$ (107)		$ (162)		$ (161)		$ (596)

⁽¹⁾ Unrealized gains and losses on commodity risk-related derivative instruments are recorded to regulatory assets or liabilities, rather than being recorded to the Condensed Consolidated Statements of Income. These amounts exclude the impact of cash collateral postings.

⁽²⁾ These amounts are fully passed through to customers in rates. Accordingly, net income was not impacted by realized amounts on these instruments.

Additional Cash Collateral the Utility Would be Required to Post if its Credit-Risk-Related Contingent Features were Triggered

(in millions)
Derivatives in a liability position with credit risk-related contingencies that are not fully collateralized	$ (464)
Related derivatives in an asset position	4
Collateral posting in the normal course of business related to these derivatives	12
Net position of derivative contracts/additional collateral posting requirements (1)	$ (448)

⁽¹⁾ This calculation excludes the impact of closed but unpaid positions, as their settlement is not impacted by any of the Utility's credit risk-related contingencies.