Pacific Gas & Electric (PCG)

Investments in Affiliates

The Utility has investments in unconsolidated affiliates, which are mainly engaged in the purchase of low-income residential real estate property. The equity method of accounting is applied to the Utility’s investment in these entities. Under the equity method, the Utility’s share of equity income or losses of these entities is reflected as equity in earnings of affiliates. As of December 31, 2004, the Utility’s recorded investment in these entities totaled approximately $5 million in accordance with the equity method of accounting. As a limited partner, the Utility’s exposure to potential loss is limited to its investment in each partnership.

Investments in Affiliates

        The Utility has investments in unconsolidated affiliates, which are mainly engaged in the purchase of low-income residential real estate property. The equity method of accounting is applied to the Utility's investment in these entities. Under the equity method, the Utility's share of equity income or losses of these entities is reflected as equity in earnings of affiliates. As of December 31, 2004, the Utility's recorded investment in these entities totaled approximately $5 million in accordance with the equity method of accounting. As a limited partner, the Utility's exposure to potential loss is limited to its investment in each partnership.