Pacific Gas & Electric (PCG)

Investing Activities

PG&E Corporation, on a stand-alone basis, did not have any material investing activities in the years ended December 31, 2004, 2003 and 2002.

Investing Activities

On March 8, 2005, PG&E Corporation received $960 million in proceeds for the repurchase of 22,023,283 shares of Utility common stock by the Utility.  This transaction was eliminated in consolidation.  PG&E Corporation, on a stand-alone basis, did not have any other material investing activities during the three months ended March 31, 2005 or the same period in 2004.

Investing Activities

        PG&E Corporation, on a stand-alone basis, did not have any material investing activities in the years ended December 31, 2004, 2003 and 2002.

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Financing Activities

        PG&E Corporation's cash flows from financing activities consist mainly of cash generated from debt refinancing and the issuance of common stock.

        PG&E Corporation's cash flows from financing activities for 2004, 2003 and 2002 were as follows:

        In 2004, PG&E Corporation's consolidated net cash used by financing activities increased by approximately $1,009 million, compared to 2003. The increase is primarily due to the November 15, 2004 redemption of PG&E Corporation's Senior Secured Notes for which PG&E Corporation paid approximately $664.5 million which included a redemption premium of approximately $50.7 million and $13.8 million of interest accrued since the last interest payment date. During November and December of 2004, PG&E Corporation repurchased 10,783,200 shares of PG&E Corporation common stock at a cost of approximately $350 million and 850,000 shares repurchased through Elm Power Corporation, PG&E Corporation's subsidiary, at a value of $28 million.

        In 2003, net cash used by financing activities increased by $148 million compared to 2002 mainly due to a decrease in common stock issued for 401(k) plan stock purchases and stock option and warrant exercises and a decrease in net proceeds from long-term debt issued. In 2002, PG&E Corporation refinanced a credit facility, which was further amended to increase the size of the facility in October 2002 to a total of $720 million. In addition, in June 2002, PG&E Corporation issued $280 million of Convertible Subordinated Notes. In July 2003, PG&E Corporation issued $600 million of Senior Secured Notes.