EXHIBIT 11
PG&E CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE

Three months ended

Nine months ended

September 30,

September 30,

(in millions, except per share amounts)

2004

2003 (1)

2004

2003 (1)

Income from continuing operations

$

228 

$

508 

$

3,633 

$

754 

Discontinued operations

- 

2 

- 

(365)

Net income (loss) before cumulative effect of changes in
   accounting principles

228 

510 

3,633 

(389)

Cumulative effect of changes in accounting principles

- 

- 

- 

(6)

Net Income (Loss) for basic and diluted calculations

$

228 

$

510 

$

3,633 

$

(383)

Weighted average common shares outstanding, basic (2)

399 

387 

397 

384 

9.50% Convertible Subordinated Notes

19 

19 

19 

19 

Weighted average common shares outstanding and participating securities, basic

418 

406 

416 

403 

Weighted average common shares outstanding, basic

399 

387 

397 

384 

Employee stock options and PG&E Corporation shares
   held by grantor trusts

7 

5 

6 

2 

PG&E Corporation Warrants

2 

5 

3 

5 

Weighted average common shares outstanding, diluted

408 

397 

406 

391 

9.50% Convertible Subordinated Notes

19 

19 

19 

19 

Weighted average common shares outstanding and
   participating securities, diluted

427 

416 

425 

410 

Earnings (Loss) Per Common Share, Basic

Income from continuing operations

$

0.55 

$

1.25 

$

8.73 

$

1.87 

Discontinued operations

- 

- 

- 

(0.91)

Cumulative effect of changes in accounting principles

- 

- 

- 

(0.01)

Rounding

- 

0.01 

- 

- 

Net earnings (loss)

$

0.55 

$

1.26 

$

8.73 

$

0.95

Earnings (Loss) Per Common Share, Diluted

Income from continuing operations

$

0.53 

$

1.22 

$

8.55 

$

1.84 

Discontinued operations

- 

- 

- 

(0.89)

Cumulative effect of changes in accounting principles

- 

- 

- 

(0.01)

Rounding

- 

0.01 

- 

(0.01)

Net earnings (loss)

$

0.53 

$

1.23 

$

8.55 

$

(0.93)

               In applying the "two-class" method the following reflects the earnings (loss) allocated to common shareholders after the inclusion of participation rights related to PG&E Corporation's 9.50% Convertible Notes in the allocation of earnings. The 9.50% Convertible Notes are convertible at the option of the holders into 18,558,655 common shares. All PG&E Corporation's participating securities participate on a 1:1 basis with common shareholders.

 

Three months ended

Nine months ended

September 30,

September 30,

Earnings (loss) allocated to common share holders, basic

2004

2003 (1)

2004

2003 (1)

Income from continuing operations

$

218 

$

484 

$

3,467 

$

718 

Discontinued operations

- 

2 

- 

(348)

Cumulative effect of changes in accounting principles

- 

- 

- 

(6)

$

218 

$

486 

$

3,467 

$

364 

Earnings (loss) allocated to common shareholders, diluted

Income from continuing operations

$

218 

$

485 

$

3,471 

$

719 

Discontinued operations

- 

2 

- 

(348)

Cumulative effect of changes in accounting principles

- 

- 

- 

(6)

$

218 

$

487 

$

3,471 

$

365 

(1)

Prior period amounts of NEGT, Inc. have been reclassified to discontinued operations.

(2)

Weighted average common shares outstanding exclude shares held by a subsidiary of PG&E Corporation (23,815,500 shares at September 30, 2004 and 2003) and PG&E Corporation shares held by grantor trusts to secure deferred compensation obligations (281,985 shares at September 30, 2004 and 2003).