EXHIBIT 10.25

2002 SHORT-TERM INCENTIVE PLAN

Background

At its meeting on February 20, 2002, the Nominating and Compensation Committee reviewed and approved the 2002 Short-Term Incentive Plan (STIP) for officers of PG&E Corporation and each subsidiary. The structure (Appendix A) establishes the weighting of corporate earnings per share (EPS), subsidiary EPS, and other performance factors for officers, including the credit ratings for PG&E National Energy Group, Inc. and its subsidiary, PG&E Energy Trading Holdings Corporation (Appendix B).

ATTACHMENT A

REVISED 2002 SHORT-TERM INCENTIVE PLAN STRUCTURE

Officer Group		Award Component		Weight		Performance Measures
PG&E Corporation		Corporate Financial Performance		50%		Corporate EPS from operations
		Credit Rating		50%		Credit rating of PG&E National Energy Group
President and CEO – Pacific Gas and Electric Company		Corporate Financial Performance		50%		Corporate EPS from operations
		Subsidiary Performance		50%		Respective subsidiary contribution to corporate EPS from operations
President and CEO – PG&E National Energy Group		Credit Rating		50%		Credit rating of PG&E National Energy Group
		Corporate Financial Performance		25%		Corporate EPS from operations
		Subsidiary Financial Performance		25%		Respective subsidiary contribution to corporate EPS from operations
Pacific Gas and Electric Company		Corporate Financial Performance		25%		Corporate EPS from operations
		Subsidiary Financial Performance		50–75%		Respective subsidiary contribution to corporate EPS from operations
		Subsidiary Operational Performance		0–25%		Financial, operating, and service measures determined by subsidiary CEO
PG&E National Energy Group		Credit Rating		50%		Credit rating of PG&E National Energy Group
		Corporate Financial Performance		25%		Corporate EPS from operations
		Subsidiary Financial Performance		0–25%		Respective subsidiary contribution to corporate EPS from operations
		Subsidiary Operational Performance		0–25%		Financial, operating, and service measures determined by subsidiary CEO

ATTACHMENT B

2002 STIP: CREDIT RATING PERFORMANCE MEASURE

Payout Level		Score		Performance Measure
Maximum		2.00		Increase in either credit rating agency’s rating for PG&E National Energy Group or Energy Trading; the other credit ratings remain unchanged.
Above Target		1.75		Both agencies’ credit ratings unchanged for PG&E National Energy Group and PG&E Energy Trading
Target		1.00		Both agencies’ credit ratings at investment grade for PG&E National Energy Group and PG&E Energy Trading
Threshold		0.50		Both agencies’ credit ratings at investment grade for PG&E National Energy Group or PG&E Energy Trading
No Payout		0.00		Both agencies’ credit ratings at below investment grade for PG&E National Energy Group and PG&E Energy Trading

The agencies referred to above are Standard and Poor’s and Moody’s credit rating agencies.