Pacific Gas & Electric (PCG)

Asset Allocations

        The asset allocation of PG&E Corporation's and the Utility's pension and other benefit plans at December 31, 2004 and 2003, and target 2005 allocation was as follows:

        Equity securities include a small amount (less than 0.1% of total plan assets) of PG&E Corporation common stock.

        The maturity of debt securities at December 31, 2004 and 2003 ranges from zero to 45 years, with a weighted average maturity of approximately 6.32 years.

        PG&E Corporation's and the Utility's investment strategy for all plans is to maintain actual asset weightings within 5% of the target asset allocations. Whenever the actual weighting exceeds the target weighting by 5%, the asset holdings are rebalanced.

        A benchmark portfolio for each asset class is set based on market capitalization and valuations of equities and the durations and credit quality of debt securities. Investment managers for each asset

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class are retained to periodically adjust, or actively manage, the combined portfolio against the benchmark. Active management covers approximately 70% of the U.S. equity, 60% of the non-U.S. equity, and virtually 100% of the debt security portfolios.