Pacific Gas & Electric (PCG)

          (a)     Under Section 201 of the First Supplemental Mortgage, the Company designated the Bonds of the First Series as the “3.60% First Mortgage Bonds due 2009” (the “3.60% First Mortgage Bonds”).  The Release Date having occurred on the date hereof and pursuant to Section 202 of the First Supplemental Mortgage, the 3.60% First Mortgage Bonds are hereby redesignated as the “3.60% Senior Notes due 2009” (the “3.60% Senior Notes”).

          (b)     Under Section 201 of the First Supplemental Mortgage, the Company designated the Bonds of the Second Series as the “4.20% First Mortgage Bonds due 2011” (the “4.20% First Mortgage Bonds”).  The Release Date having occurred on the date hereof and pursuant to Section 202 of the First Supplemental Mortgage, the 4.20% First Mortgage Bonds are hereby redesignated as the “4.20% Senior Notes due 2011” (the “4.20% Senior Notes”).

          (c)     Under Section 201 of the First Supplemental Mortgage, the Company designated the Bonds of the Third Series as the “4.80% First Mortgage Bonds due 2014” (the “4.80% First Mortgage Bonds”).  The Release Date having occurred on the date hereof and pursuant to Section 202 of the First Supplemental Mortgage, the 4.80% First Mortgage Bonds are hereby redesignated as the “4.80% Senior Notes due 2014” (the “4.80% Senior Notes”).

          (d)     Under Section 201 of the First Supplemental Mortgage, the Company designated the Bonds of the Fourth Series as the “6.05% First Mortgage Bonds due 2034” (the “6.05% First Mortgage Bonds”).  The Release Date having occurred on the date hereof and pursuant to Section 202 of the First Supplemental Mortgage, the 6.05% First Mortgage Bonds are hereby redesignated as the “6.05% Senior Notes due 2034” (the “6.05% Senior Notes”).

          (e)     Under Section 201 of the First Supplemental Mortgage, the Company designated the Bonds of the Fifth Series as the “Floating Rate First Mortgage Bonds due 2006” (the “Floating Rate First Mortgage Bonds”).  The Release Date having occurred on the date hereof and pursuant to Section 202 of the First Supplemental Mortgage, the Floating Rate First Mortgage Bonds are hereby redesignated as the “Floating Rate Senior Notes due 2006” (the “Floating Rate Senior Notes”).

          (f)     In accordance with Section 202 of the First Supplemental Mortgage, each holder of a 3.60% First Mortgage Bond, 4.20% First Mortgage Bond, a 4.80% Mortgage Bond, 6.05% Mortgage Bond and Floating Rate First Mortgage Bond that is a Global Bond is to surrender such Bond to the Trustee as soon as reasonably practicable after the Release Date and the Trustee shall simultaneously exchange the surrendered Bond for a 3.60% Senior Note, a 4.20% Senior Note, a 4.80% Senior Note, a 6.05% Senior Note and a Floating Rate Senior Note, respectively.  The form of the Fixed Rate Senior Notes being exchanged pursuant hereto is attached hereto as Exhibit A and the form of the Floating Rate Senior Notes being exchanged pursuant hereto is attached hereto as Exhibit B.

          (g)     As established in Section 201 of the First Supplemental Mortgage and as continued hereunder, any series of the Bonds of the Initial Series may be reopened, from time to time, for issuances of additional Bonds of such series, and any additional Bonds issued and comprising Bonds of any series of the Bonds of the Initial Series shall have identical terms as such series of Bonds of the Initial Series, except that the issue price, issue date and, in some cases, the first Interest Payment Date may differ.

          (h)     As established in Section 204 of the First Supplemental Mortgage and as continued hereunder, (i) the 3.60% Senior Notes bear interest at the rate of 3.60% per annum and have a Stated Maturity of March 1, 2009; (ii) the 4.20% Senior Notes bear interest at the rate of 4.20% per annum and have a Stated Maturity of March 1, 2011, (iii) the 4.80% Senior Notes bear interest at the rate of 4.80% per annum and have a Stated Maturity of March 1, 2014; (iv) the 6.05% Senior Notes bear interest at the rate of 6.05% per annum and have a Stated Maturity of March 1, 2034; and (v) the rate of interest on the Floating Rate Senior Notes is calculated as set forth in the form of such Bond attached hereto as Exhibit B and the Stated Maturity of the Floating Rate Senior Notes is April 3, 2006.

          (i)     As established in Section 205 of the First Supplemental Mortgage and as continued hereunder, the Bonds of the Initial Series were issued in the form of one or more permanent Global Securities as provided in Section 3.13 of the Prior Indenture and deposited with the Trustee, as custodian for the Depositary, duly executed by the Company and authenticated by the Trustee.

          (j)     As established in Section 205 of the First Supplemental Mortgage and as continued hereunder, the Company appointed DTC to act as the Depositary with respect to all Bonds of the Initial Series, and the Bonds of the Initial Series were initially registered in the name of Cede & Co., as the nominee of DTC.

          (k)     In accordance with Section 205 of the First Supplemental Mortgage, the Trustee executed and delivered a Letter of Representations to DTC and, in connection with any successor nominee for DTC or any successor Depositary, the Trustee will enter into comparable arrangements, and shall have the same rights with respect to its actions thereunder as it has with respect to its actions under the Indenture.

          (l)     As established in Section 205 of the First Supplemental Mortgage and as continued hereunder, none of the Company, the Trustee, any Paying Agent or any Bond Registrar will have any responsibility or liability for any aspect of Depositary records relating to, or payments made on account of, beneficial ownership interests in a Global Bond or for maintaining, supervising or reviewing any Depositary records relating to such beneficial ownership interests, or for transfers of beneficial interests in the Bonds or any transactions between the Depositary and beneficial owners.

          (m)     As established in Section 206 of the First Supplemental Mortgage and as continued hereunder, no sinking fund is provided for any of the Bonds of the Initial Series.

          (n)     As established in Section 208 of the First Supplemental Mortgage and as continued hereunder, the Trustee is appointed as initial Paying Agent and initial Bond Registrar for the Bonds of the Initial Series.

          (o)     As established in Section 209 of the First Supplemental Mortgage, BNY Western Trust Company was appointed as the initial Calculation Agent for the Floating Rate Senior Notes and The Bank of New York Trust Company, N.A., as successor in interest to BNY Western Trust Company is continued as the initial Calculation Agent for the Floating Rate Senior Notes.

          (p)     Other terms of the Bonds of the Initial Series are as expressly set forth Section 4.03 below, Exhibit A (with respect to the Fixed Rate Senior Notes) and Exhibit B (with respect to the Floating Rate Senior Notes).