Pacific Gas & Electric (PCG)

Equity Grant Date Policy

In June 2007, the Committee established a new equity grant date policy to apply to future awards under the LTIP, beginning with awards to be made in 2008.

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For annual equity grants, the grant date has been changed to the first business day in March, from the first business date in January.

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For non-annual equity grants to employees (such as for newly hired or newly promoted officers) that must be approved by either the PG&E Corporation or Pacific Gas and Electric Company Board, by the Committee, or by the PG&E Corporation CEO, the grant date will be the later of (1) the date that the grant is approved by the Board or the Committee or PG&E Corporation CEO, as applicable, or (2) the date of hire or promotion, provided that if the grant date occurs during a period in which officers are not permitted to trade shares of PG&E Corporation common stock, then the grant date will be the third business day after PG&E Corporation's next public disclosure of quarterly or annual financial results, except where special circumstances require otherwise.

The Committee established this new equity grant date policy so that (1) PG&E Corporation and Pacific Gas and Electric Company will have a complete year of individual and corporate performance data for consideration when determining annual compensation adjustments and annual target LTIP awards, and (2) all equity grants would be made after the companies' most recent financial results have been publicly disclosed and reflected in the market price of PG&E Corporation's common stock.

Equity Grant Date Policy

In June 2007, the Committee established a new equity grant date policy to apply to future awards under the LTIP, beginning with awards to be made in 2008.

•

For annual equity grants, the grant date has been changed to the first business day in March, from the first business date in January.

•

For non-annual equity grants to employees (such as for newly hired or newly promoted officers) that must be approved by either the PG&E Corporation or Pacific Gas and Electric Company Board or by the Committee, the grant date will be the later of (1) the date that the grant is approved by the Board or the Committee, or (2) the date of hire or promotion, provided that if the date of hire or promotion occurs during a period in which officers are not permitted to trade shares of PG&E Corporation common stock, then the grant date will be the third business day after PG&E Corporation's next public disclosure of quarterly or annual financial results, except where special circumstances require otherwise.

•

For non-annual equity grants to employees (such as for newly hired or newly promoted officers) that must be approved by the PG&E Corporation CEO, the grant date will be the later of (1) the date that the grant is approved by the PG&E Corporation CEO, or (2) the date of hire or promotion, provided that if the date that the grant is approved or the date of hire or promotion occurs during a period in which officers are not permitted to trade shares of PG&E Corporation common stock, then the grant date will be the third business day after PG&E Corporation's next public disclosure of quarterly or annual financial results, except where special circumstances require otherwise.

The Committee established this new equity grant date policy so that (1) PG&E Corporation and Pacific Gas and Electric Company will have a complete year of individual and corporate performance data for consideration when determining annual compensation adjustments and annual target LTIP awards, and (2) all equity grants would be made after the companies' most recent financial results have been publicly disclosed and reflected in the market price of PG&E Corporation's common stock.