<SUBMISSION>
<ACCESSION-NUMBER>0001004980-04-000211
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>2
<PERIOD>20040831
<ITEMS>7.01
<ITEMS>9.01
<FILING-DATE>20040901
<DATE-OF-FILING-DATE-CHANGE>20040831
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>PG&E CORP
<CIK>0001004980
<ASSIGNED-SIC>4931
<IRS-NUMBER>943234914
<STATE-OF-INCORPORATION>CA
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>001-12609
<FILM-NUMBER>041009571
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>ONE MARKET SPEAR TOWER
<STREET2>SUITE 2400
<CITY>SAN FRANCISCO
<STATE>CA
<ZIP>94105
<PHONE>4152677000
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>ONE MARKET SPEAR TOWER
<STREET2>SUITE 2400
<CITY>SAN FRANCISCO
<STATE>CA
<ZIP>94105
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>PG&E PARENT CO INC
<DATE-CHANGED>19951214
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>final8k083104.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html>
<head>


<title>Form 8-k dated August 31, 2004</title>
</head>
<body link="blue" vlink="purple">
<div>
<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top"><br align="center">
<br>
<div align="center">

<tr>
<td colspan="4" valign="top">
<p align="center">SECURITIES AND EXCHANGE COMMISSION</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><br>
</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center">Washington, D.C.&nbsp; 20549</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><br>
</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center">FORM 8-K</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><br>
</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center">CURRENT REPORT</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><br>
</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center">Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><br>
</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center">Date of Report: August 31, 2004</p>

<p align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><br>
 Commission<br>
 File<br>
 Number</p>
</td>
<td valign="top">
<p align="center">Exact Name of<br>
 Registrant<br>
 as specified in<br>
 its charter</p>
</td>
<td valign="top">
<p align="center"><br>
 State or other<br>
 Jurisdiction of<br>
 Incorporation</p>
</td>
<td valign="top">
<p align="center"><br>
 IRS Employer<br>
 &nbsp; Identification<br>
 Number</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">_____________</p>
</td>
<td valign="top">
<p align="center">_____________</p>
</td>
<td valign="top">
<p align="center">_____________</p>
</td>
<td valign="top">
<p align="center">_____________</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">1-12609</p>

<p align="center">1-2348</p>
</td>
<td valign="top">
<p align="center">PG&amp;E Corporation</p>

<p align="center">Pacific Gas and<br>
 Electric Company</p>
</td>
<td valign="top">
<p align="center">California</p>

<p align="center">California</p>
</td>
<td valign="top">
<p align="center">94-3234914</p>

<p align="center">94-0742640</p>

<p align="center"><br>
</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top">
<p align="center">Pacific Gas and Electric Company<br>
 77 Beale Street, P. O. Box 770000<br>
 San Francisco, California&nbsp;&nbsp;94177</p>
</td>
<td colspan="2" valign="top">
<p align="center">PG&amp;E Corporation<br>
 One Market, Spear Tower, Suite 2400<br>
 San Francisco, California&nbsp;&nbsp;94105</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center">(Address of principal executive offices) (Zip
Code)</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td colspan="2" valign="top">
<p align="center">Pacific Gas and Electric Company<br>
 (415) 973-7000</p>
</td>
<td colspan="2" valign="top">
<p align="center">PG&amp;E Corporation<br>
 (415) 267-7000</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center">(Registrant's telephone number, including area
code)</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>
</table>
</div>

<p align="center">(Former Name or Former Address, if Changed Since
last Report)</p>

<br align="center">
<br>
<p>Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (see General
Instruction A.2. below):</p>

<p style="text-indent: -20; margin-left: 20">[ ] Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)</p>

<p style="text-indent: -20; margin-left: 20"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>[
] Soliciting
Material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</font>

<p style="text-indent: -20; margin-left: 20"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>[
] Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)</font></p>
<font size="2" face=

263:
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>


<div align="center">
<hr size="2" width="100%" align="center">
</div>

<br clear="all">


</font>


<p><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>Item 7.01&nbsp; Regulation FD Disclosure</font></p>

<p><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>Proposed Settlement with National Energy &amp; Gas Transmission,
Inc.; Revised 2005 Earnings Guidance</font></p>

<p style="text-indent: 30"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>The following information, including the
press release attached to this report, is being furnished, not
filed, pursuant to Item&nbsp;7.01 of Form&nbsp;8-K.</font></p>

<p style="text-indent: 30"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>In light of a proposed settlement of a
dispute with its subsidiary, National Energy &amp; Gas
Transmission, Inc. (NEGT), as described below, PG&amp;E Corporation
anticipates using $350 million of cash (that it has treated as
restricted while the dispute with NEGT is pending) for share
repurchases in 2005, in addition to $1.2 billion that PG&amp;E
Corporation has previously estimated would be available for common
stock dividends and repurchases in 2005 (assuming that $1.8 billion
of proceeds from the issuance of energy recovery bonds are
available in 2005).&nbsp; PG&amp;E Corporation expects that its
2005 earnings from operations will range from $2.15 to $2.25 per
share, increased from the previously disclosed estimates of $2.10
to $2.20, reflecting the impact of the additional $350 million of
share repurchases expected to be made in 2005.&nbsp;</font></p>

<p style="text-indent: 30"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>The press release attached to this
report as an exhibit reconciles 2005 estimated earnings per share
from operations with estimated consolidated earnings per share in
accordance with generally accepted accounting principles.&nbsp;
PG&amp;E Corporation presents guidance on an &ldquo;earnings from
operations&rdquo; basis in order to provide investors with a
measure that reflects the underlying financial performance of the
business and offers investors a basis on which to compare
performance from one period to another, exclusive of items that, in
management&rsquo;s judgment, are not reflective of the normal
course of operations.</font></p>

<p style="text-indent: 30"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>PG&amp;E Corporation also outlined in
its press release the expected uses of PG&amp;E Corporation&rsquo;s
$1.2 billion in cash it held as of June 30, 2004.</font></p>

<font size="2" face=

263:
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>

<p style="text-indent: 30">&nbsp;</p>

</font>

<p><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>Item 8.01 Other Events</font></p>

<p><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>A.&nbsp;&nbsp;Settlement with National Energy &amp; Gas
Transmission, Inc.</font></p>

<p style="text-indent: 30"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>On August 27, 2004, PG&amp;E Corporation
and NEGT, various NEGT subsidiaries, and the official committee of
unsecured creditors (OCC) in NEGT&rsquo;s bankruptcy case pending
before the U.S. Bankruptcy Court for the District of Maryland,
Greenbelt Division (Bankruptcy Court), among others, agreed to
settle pending litigation regarding certain tax-related
issues.&nbsp; As previously reported, NEGT&rsquo;s bankruptcy
estate, the OCC, and the creditor committee appointed to represent
the interests of NEGT&rsquo;s senior note holders
(Noteholders&rsquo; Committee) filed a complaint in the Bankruptcy
Court against PG&amp;E Corporation and two officers of PG&amp;E
Corporation who previously served on NEGT&rsquo;s Board of
Directors, asserting, among other claims, that NEGT is entitled to
be compensated under an alleged implied tax sharing agreement
between PG&amp;E Corporation and NEGT for any tax savings achieved
by PG&amp;E Corporation as a result of the incorporation of the
losses and deductions related to NEGT or its subsidiaries in
PG&amp;E Corporation&rsquo;s consolidated federal income tax
return.&nbsp; NEGT and its two creditors&rsquo; committees sought
at least $414 million in damages (including $361.5 million obtained
by incorporating 2002 losses and other deductions of NEGT and its
subsidiaries and an additional $53 million obtained as a result of
incorporating tax credits generated by certain NEGT subsidiaries in
PG&amp;E Corporation&rsquo;s 2002 consolidated federal income tax
returns), interest, costs of suit, attorneys&rsquo; fees, and
punitive damages.&nbsp; As previously reported, until the dispute
is resolved, PG&amp;E Corporation is accounting for $361.5 million
as restricted cash.&nbsp; In April 2004, as requested by PG&amp;E
Corporation, (1) the Bankruptcy Court dismissed approximately half
of the claims asserted in the complaint, and (2) the litigation was
transferred to the U.S. District Court for the District of Maryland
(District Court), where a trial is scheduled to begin in March
2005.</font></p>

<p style="text-indent: 30"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>The parties, excluding the
Noteholders&rsquo; Committee, have agreed to settle on the
following principal terms:&nbsp;</font></p>

<ul>
<li>
<p style="text-indent: 0; margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>PG&amp;E Corporation
has agreed to pay $30 million to NEGT.</font></p>
</li>

<li>
<p style="text-indent: 0; margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>PG&amp;E Corporation
will waive its intercompany claims, aggregating a face amount of
approximately $400 million, against certain of NEGT&rsquo;s
subsidiaries. &nbsp; Following NEGT&rsquo;s Chapter 11 filing,
PG&amp;E Corporation accounted for NEGT as discontinued operations
which required PG&amp;E Corporation to report these intercompany
amounts as part of its investment in NEGT.&nbsp; Accordingly, the
waiver of these intercompany claims will not affect PG&amp;E
Corporation&rsquo;s net negative investment in NEGT of $1.2 billion
at June 30, 2004.</font></p>
</li>

<li>
<p style="text-indent: 0; margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>There will be a mutual
general release of substantially all claims between (1) PG&amp;E
Corporation<a name="_DV_C18">, its subsidiaries (other than NEGT
and its subsidiaries), and the officers named as defendants, and
(2) NEGT,</a> its wholly owned or controlled subsidiaries, and the
OCC (except that the release of claims between PG&amp;E Corporation
and USGen New England, Inc. will extend only to tax-related
claims).&nbsp; After the settlement is effective, PG&amp;E
Corporation will no longer account for $361.5 million as restricted
cash.</font></p>
</li>
</ul>

<p style="text-indent: 30; margin-right: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>In addition, PG&amp;E
Corporation and NEGT have agreed to enter into a separate agreement
under which they have agreed to take certain actions and cooperate
with each otherwith respect to certain tax matters, including
future tax returns and audits.</font></p>

<p style="text-indent: 30; margin-right: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>The settlement is
subject to the final approval of the District Court and the
Bankruptcy Court.&nbsp; A joint hearing before both courts has been
set for September 22, 2004.&nbsp; If the order of the District
Court or the Bankruptcy Court approving the settlement is appealed
such that either order does not become final by October 29, 2004,
the settlement agreement would terminate unless the parties
mutually agree to waive such termination.</font></p>

<p style="text-indent: 30; margin-right: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>Although PG&amp;E
Corporation no longer consolidates NEGT&rsquo;s financial results
in its consolidated financial statements, PG&amp;E Corporation is
required to incorporate NEGT&rsquo;s income or losses into PG&amp;E
Corporation&rsquo;s consolidated federal income tax return as long
as it owns more than 80 percent of the equity of NEGT.&nbsp; On the
effective date of NEGT&rsquo;s plan of reorganization PG&amp;E
Corporation&rsquo;s equity interest in NEGT will be
cancelled.&nbsp; Based on preliminary information recently provided
by NEGT, PG&amp;E Corporation anticipates paying approximately $100
million of consolidated tax obligations in 2004 attributable to
NEGT&rsquo;s estimated taxable net income through the effective
date of NEGT&rsquo;s plan of reorganization.&nbsp; (PG&amp;E
Corporation&rsquo;s consolidated federal income tax return for 2003
incorporated losses attributable to NEGT or its subsidiaries
generating $140 million of tax benefits that are reflected in
PG&amp;E Corporation&rsquo;s cash balance at June 30, 2004.)</font></p>

<p style="text-indent: 30; margin-right: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>As previously
reported, upon the effective date of NEGT&rsquo;s confirmed plan of
reorganization, PG&amp;E Corporation&rsquo;s equity interest in
NEGT will be canceled and PG&amp;E Corporation will reverse its net
negative investment in NEGT, and also will reverse certain deferred
tax assets and accumulated other comprehensive income related to
NEGT. The resulting net gain will be offset by the $30 million
payment to be made pursuant to the settlement agreement and the
impact of any estimated tax liabilities, including the $100 million
2004 tax obligation discussed above.&nbsp; As a result, PG&amp;E
Corporation will recognize a material one-time non-cash net gain to
earnings from discontinued operations.</font></p>

<font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>

<br>
<br>
</font>
<p><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>B.&nbsp; Gas Transmission and Storage 2005 Rate Case</font></p>

<p style="text-indent: 30; margin-right: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>On August 27, 2004,
Pacific Gas and Electric Company (Utility) and all other active
parties in the Utility&rsquo;s gas transmission and storage 2005
rate case, including The Utility Reform Network (TURN) and the
California Public Utilities Commission (CPUC) Office of Ratepayer
Advocates (ORA), filed a joint motion with the CPUC seeking
approval of a proposed comprehensive settlement agreement, termed
the &ldquo;Gas Accord III Settlement.&rdquo;&nbsp; If approved by
the CPUC, the proposed settlement will, among other things, set the
Utility&rsquo;s gas transmission and storage rates and market
structure for a three-year term, commencing January 1, 2005.&nbsp;
The proposed settlement agreement would maintain the current Gas
Accord market structure and service options.&nbsp;</font></p>

<p style="text-indent: 30; margin-right: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>The proposed
settlement agreement provides a gas transmission and storage
revenue requirement of approximately $428.5 million for 2005 and a
two percent per year increase for the following two years.&nbsp;
For the year 2006, the revenue requirement would be approximately
$436.6 million, and for the year 2007, the revenue requirement
would be approximately $444.9 million.&nbsp; The proposed
settlement agreement also provides that the Utility should file its
next gas transmission and storage rate case application no later
than February&nbsp;9,&nbsp;2007, for rates to be in effect by
January 1, 2008.&nbsp;</font></p>

<p style="text-indent: 30; margin-right: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>Comments and reply
comments on the joint motion are due in September.&nbsp; A final
decision is expected before the end of the year.&nbsp; PG&amp;E
Corporation and the Utility are unable to predict the ultimate
outcome of this proceeding.</font></p>

<font size="2" face=

263:
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>

<p style="text-indent: 30; margin-right: 10">&nbsp;</p>

</font>

<p><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>C.&nbsp; Notice of Partial Redemption of Floating Rate First
Mortgage Bonds due 2006</font></p>

<p style="text-indent: 30; margin-right: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>On August 30, 2004,
the Utility notified the trustee of the Utility&rsquo;s $1.6
billion aggregate principal amount of Floating Rate First Mortgage
Bonds due 2006 that the Utility will redeem bonds in the aggregate
principal amount of $500 million on October 3, 2004.&nbsp; The
bonds to be redeemed will be selected from all Floating Rate First
Mortgage Bonds due 2006 in accordance with the procedures of The
Depository Trust Company.</font></p>

<hr>

<p style="margin-right: 10">&nbsp;</p>

<p style="text-indent: 30; margin-right: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>This report, including
the attached press release, contain forward-looking statements
regarding estimated earnings for 2005, anticipated cash flows in
2005, and management&rsquo;s projected uses of cash in 2005
including the anticipated payment of dividends and targeted stock
repurchases.&nbsp; These statements are based on current
expectations and assumptions which management believes are
reasonable and on information currently available to management but
are necessarily subject to various risks and uncertainties.&nbsp;
Actual results could differ materially from those contemplated by
the forward-looking statements.&nbsp; Some of the factors that
could cause future results to differ materially include:<br>
</font>
</p>

<ul type="disc">
<li>
<p style="margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>The timing and resolution of the
petitions for review that were filed in the California Court of
Appeal seeking review of (i) the CPUC's December 18, 2003 decision
approving the settlement agreement entered into among the CPUC,
PG&amp;E Corporation and the Utility to resolve the Utility&rsquo;s
Chapter 11 case (Settlement Agreement), and (ii) the CPUC's March
16, 2004 denial of applications for rehearing of the December 18,
2003 decision;</font></p>
</li>

<li>
<p style="margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>The timing and resolution of the
pending appeals of the bankruptcy court's order confirming the
Utility&rsquo;s plan of reorganization under Chapter 11,</font></p>
</li>

<li>
<p style="margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>Whether the conditions to securitizing
the $2.21 billion after-tax regulatory asset established under the
Settlement Agreement are met, and if so, the timing and amount of
the securitization,</font></p>
</li>

<li>
<p style="margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>Whether the CPUC approves the
Utility's long-term electricity resource plan and adopts the
Utility's related ratemaking proposals, whether the assumptions and
forecasts underlying the long-term resource plan prove to be
accurate, and the terms and conditions of the long-term resource
commitments the Utility enters into in connection with its
long-term resource plan;</font></p>
</li>

<li>
<p style="margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>Unanticipated changes in operating
expenses or capital expenditures affecting the Utility&rsquo;s
ability to earn its authorized rate of return;</font></p>
</li>

<li>
<p style="margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>The level and volatility of wholesale
electricity and natural gas prices and supplies, the Utility's
ability to manage and respond to the levels and volatility
successfully, and the extent to which the Utility is able to timely
recover increased costs related to such volatility;</font></p>
</li>

<li>
<p style="margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>The extent to which the Utility's
residual net open position (<em>i.e</em>., that portion of the
Utility's electricity customers' demand not satisfied by
electricity that the Utility generates or has under contract, or by
electricity provided under the California Department of Water
Resources electricity contracts allocated to the Utility's
customers) increases or decreases;</font></p>
</li>

<li>
<p style="margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>The operation of the Utility's Diablo
Canyon nuclear power plant which exposes the Utility to potentially
significant environmental and capital expenditure outlays and, to
the extent the Utility is unable to increase its spent fuel storage
capacity by 2007 or find an alternative depository, the risk that
the Utility may be required to close the Diablo Canyon power plant
and purchase electricity from more expensive sources;</font></p>
</li>

<li>
<p style="margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>The impact of current and future
ratemaking actions of the CPUC, including the risk of material
differences between forecasted costs used to determine rates and
actual costs incurred;</font></p>
</li>

<li>
<p style="margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>The extent to which the CPUC or the
Federal Energy Regulatory Commission delays or denies recovery of
the Utility's costs from customers due to a regulatory
determination that such costs were not reasonable or prudent or for
other reasons resulting in write-offs of regulatory balancing
accounts;</font></p>
</li>

<li>
<p style="margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>How the CPUC administers the capital
structure, stand-alone dividend and first priority conditions of
the CPUC's decisions permitting the establishment of holding
companies for California investor-owned electric utilities;</font></p>
</li>

<li>
<p style="margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>The impact of future legislative or
regulatory actions or policies;</font></p>
</li>

<li>
<p style="margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>Increased competition;</font></p>
</li>

<li>
<p style="margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>The outcome of pending litigation;
and</font></p>
</li>

<li>
<p style="margin-bottom: 10"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>Other factors discussed in PG&amp;E
Corporation's and the Utility&rsquo;s SEC reports.</font></p>
</li>
</ul>

<font size="2" face=

263:
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>

<p>&nbsp;</p>

</font>

<p><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>Item 9.01 &ndash; Financial Statements and Exhibits</font></p>

<p><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>Exhibit No. 99*&nbsp;&nbsp;&nbsp;&nbsp;Press Release dated
August 31, 2004</font></p>

<p style="text-indent: 30"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>*&nbsp;&nbsp;&nbsp; As this exhibit
relates to the information furnished under Item 7.01, it is deemed
furnished, rather than filed, in accordance with General
Instruction B.2. to Form 8-K.</font></p>

<font size="2" face=

263:
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>&nbsp;
<hr>
&nbsp;</font>

<table border="0" cellspacing="0" cellpadding="0" width="666">

<tr>
<td valign="top" width="660" colspan="3" align="center">
<font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>SIGNATURE</font>
</td>
</tr>

<tr>
<td valign="top" width="660" colspan="3" align="center">
</td>
</tr>

<tr>
<td valign="top" width="660" colspan="3">
<font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.</font>
</td>
</tr>

<font size="2" face=

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under the Exchange Act (17 CFR 240.14a-12)</p>

<tr>
<td valign="top" width="278">
</td>
<td valign="top" width="51">
</td>
<td valign="top" width="331">
&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="278">
</td>
</font>
<td valign="top" width="382" colspan="2">
<font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>PG&amp;E CORPORATION</font>
</td>
</tr>

<tr>
<td valign="top" width="278">
</td>
<td valign="top" width="51">
</td>
<td valign="top" width="331">
&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="278">
<p>
<font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top" width="51">
<p><font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>By:&nbsp;&nbsp;</font></p>
</td>
<td valign="top" width="331">
<p style="border-bottom-style: solid"><font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>LINDA Y.H. CHENG</font></p>
</td>
</tr>

<font size="2" face=

263:
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under the Exchange Act (17 CFR 240.14a-12)</p></font>

<tr>
<td valign="top" width="278">
<p>
<font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top" width="51"><font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p><br>
<br>
  </font>
</td>
<td valign="top" width="331"><font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>Linda Y. H. Cheng<br>
Corporate Secretary</font></td>
</tr>

<font size="2" face=

263:
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under the Exchange Act (17 CFR 240.14a-12)</p>

<tr>
<td valign="top" width="278"></td>
<td colspan="2" valign="top" width="384">&nbsp;&nbsp;&nbsp;&nbsp;</td>
</tr>

</font>

<tr>
<td valign="top" width="278">
<p>
<font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td colspan="2" valign="top" width="384">
<p><font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>PACIFIC GAS AND ELECTRIC COMPANY</font>
</p>
</td>
</tr>

<tr>
<td valign="top" width="278">
</td>
<td valign="top" width="51">
</td>
<td valign="top" width="331">
&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="278">
<p>
<font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top" width="51">
<p><font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>By:&nbsp;&nbsp;</font></p>
</td>
<td valign="top" width="331">
<p style="border-bottom-style: solid"><font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>DINYAR B. MISTRY</font></p>
</td>
</tr>

<font size="2" face=

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under the Exchange Act (17 CFR 240.14a-12)</p></font>

<tr>
<td valign="top" width="278">
<p>
<font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top" width="51"><font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p><br>
<br>
  </font>
</td>
<td valign="top" width="331"><font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>Dinyar B. Mistry<br>
Vice President and Controller</font></td>
</tr>

<tr>
<td valign="top" width="278">
<p><font
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>Dated:&nbsp; August 31, 2004</font></p>
</td>
<font size="2" face=

263:
&yuml; Soliciting Material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>
<td colspan="2" valign="top" width="384"></td>
</tr>

</table>
</font>
<p>&nbsp;</p>
<hr>
<p>&nbsp;</p>
<p align="center"><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>EXHIBIT INDEX</font></p>

<p><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>Exhibit No. 99*&nbsp;&nbsp;&nbsp;&nbsp;Press Release dated
August 31, 2004</font></p>

<p><font &yuml; soliciting material pursuant to rule 14a-12 under the exchange act (17 cfr 240.14a-12)</p>*As this exhibit relates to the information furnished under Item
7.01, it is deemed furnished, rather than filed, in accordance with
General Instruction B.2. to Form 8-K.</font></p>
</body>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>finalex99.htm
<DESCRIPTION>EXHIBIT 99
<TEXT>
<html>
<head>
<title>PG&amp;E Corporation Form 8-K Exhibit 99</title>
</head>
<body link="blue" vlink="purple">
<div>
<table border="0" cellspacing="0" cellpadding="0" width="614">
<tr>
<td valign="top">
<p align="right">Exhibit 99</p>
</td>
</tr>

<tr>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>FOR IMMEDIATE RELEASE</p>
</td>
</tr>

<tr>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p align="right">August 31, 2004</p>
</td>
</tr>

<tr>
<td valign="top">
<p>CONTACT: Corporate Communications 1-800-743-6397</p>
</td>
</tr>

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top">
<h1><font size="4">PG&amp;E CORPORATION SETTLES TAX LITIGATION WITH ITS NEGT
SUBSIDIARY; RAISES 2005 EARNINGS GUIDANCE&nbsp;</font></h1>
</td>
</tr>

<tr>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p style="text-indent: 10; margin-bottom: 10">(San Francisco) &ndash; PG&amp;E Corporation (NYSE: PCG) has
entered into a settlement with its National Energy &amp; Gas
Transmission, Inc. (NEGT) subsidiary to resolve claims that the
Corporation is obligated to compensate NEGT for tax savings
resulting from the incorporation of losses and deductions related
to NEGT or its subsidiaries in the Corporation&rsquo;s consolidated
federal income tax return. &nbsp;</p>
</td>
</tr>

<tr>
<td valign="top">
<p style="text-indent: 10; margin-bottom: 10">The Corporation expects the settlement will allow it to make
approximately $350 million of additional cash available for stock
repurchases.&nbsp; The $350 million, which had been restricted
pending a resolution of the dispute, will be incremental to $1.2
billion the Corporation has previously estimated will be available
for dividends and stock repurchases in 2005, assuming the
refinancing of Pacific Gas and Electric Company&rsquo;s $2.21
billion regulatory asset occurs as planned in January 2005.&nbsp;
Accordingly, the Corporation is raising its previous guidance for
2005 earnings from operations to a range of $2.15 to $2.25 per
share, reflecting the impact of the expected additional share
repurchases.</p>
</td>
</tr>

<tr>
<td valign="top">
<p style="text-indent: 10; margin-bottom: 10">&ldquo;The settlement agreement provides for timely closure of
outstanding issues between PG&amp;E Corporation and NEGT,&rdquo;
said Robert D. Glynn, Jr., Chairman, CEO and President of PG&amp;E
Corporation.&nbsp; &ldquo;This resolution lifts the restriction on
corporate cash and reduces uncertainty as we focus on shareholder
value from the improved financial performance of our core utility
business.&rdquo;</p>
</td>
</tr>

<tr>
<td valign="top">
  <p style="text-indent: 10; margin-bottom: 10"></td>
</tr>

<tr>
<td valign="top">
<p style="text-indent: 10; margin-bottom: 10"><b><u>Terms of the Settlement</u></b></p>
</td>
</tr>

<tr>
<td valign="top">
<p style="text-indent: 10; margin-bottom: 10">The parties to the settlement &ndash; PG&amp;E Corporation, NEGT
and its wholly owned or controlled subsidiaries, and the official
committee of unsecured creditors in NEGT&rsquo;s Chapter 11 case
&ndash; will execute a mutual release of all tax-related claims and
substantially all other claims. Additionally, the Corporation will
pay NEGT $30 million.&nbsp; The release of claims by PG&amp;E
Corporation has no effect on the previously reported value of the
Corporation&rsquo;s net negative investment in NEGT.</p>
</td>
</tr>

<tr>
<td valign="top">
<p style="text-indent: 10; margin-bottom: 10">The settlement agreement requires the approval of the U.S.
District Court for the District of Maryland, where NEGT&rsquo;s
complaint has been transferred, and the Bankruptcy Court overseeing
Chapter 11 proceedings for NEGT and certain of its subsidiaries. A
joint hearing before both courts has been set for September 22,
2004.&nbsp; If either the District Court order or the Bankruptcy
Court order approving the settlement is appealed so that the order
does not become final before by October 29, 2004, the settlement agreement
would terminate unless the parties mutually agree to waive such
termination.</p>
</td>
</tr>

<tr>
<td valign="top">
  <p style="text-indent: 10; margin-bottom: 10"></td>
</tr>

<tr>
<td valign="top">
<p style="text-indent: 10; margin-bottom: 10"><b><u>Remaining NEGT-Related Obligations</u></b></p>
</td>
</tr>

<tr>
<td valign="top">
<p style="text-indent: 10; margin-bottom: 10">As previously reported, following NEGT&rsquo;s Chapter 11 filing
in July 2003, PG&amp;E Corporation&rsquo;s financial statements no
longer reflect NEGT&rsquo;s operations.&nbsp; However, the
Corporation continues to be responsible for including income or
losses from NEGT and its subsidiaries in the Corporation&rsquo;s
consolidated federal income tax returns until the effective date of
NEGT&rsquo;s Chapter 11 plan of reorganization, when PG&amp;E
Corporation&rsquo;s equity interest in NEGT will be
cancelled.&nbsp; Based on preliminary information recently provided
by NEGT, PG&amp;E Corporation anticipates paying approximately $100
million of consolidated tax obligations in 2004 attributable to
NEGT taxable income.</p>
</td>
</tr>

<tr>
<td valign="top">
  <p style="text-indent: 10; margin-bottom: 10"></td>
</tr>

<tr>
<td valign="top">
<p style="text-indent: 10; margin-bottom: 10"><b><u>Cash and Earnings Effects at PG&amp;E
Corporation</u></b></p>
</td>
</tr>

<tr>
<td valign="top">
<p style="text-indent: 10; margin-bottom: 10">At June 30, 2004, PG&amp;E Corporation held approximately $1.22
billion of cash.&nbsp; In addition to the $30 million payment and
the $100 million in consolidated tax obligations described above,
uses for the cash include up to $650 million to retire, renegotiate
or partly refinance the Corporation&rsquo;s senior secured notes in
order to remove stock repurchase restrictions.&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top">
<p style="text-indent: 10; margin-bottom: 10">The Corporation expects to use approximately $350 million for
common stock repurchases in addition to those already anticipated
as part of the $1.2 billion of dividends and stock repurchases
targeted to be made in 2005.&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top">
<p style="text-indent: 10; margin-bottom: 10">The Corporation expects that remaining cash would be sufficient
for normal working capital requirements and contingencies, even if
$650 million is used to retire the senior secured notes.</p>
</td>
</tr>

<tr>
<td valign="top">
<p style="text-indent: 10; margin-bottom: 10">The following table reconciles 2005 estimated earnings per share
from operations with estimated consolidated earnings per share in
accordance with GAAP.&nbsp;</p>
</td>
</tr>
</table>

<table border="0" cellspacing="0" cellpadding="0" width="614">
<tr>
<td colspan="7" valign="top" width="612" height="21">
</td>
</tr>

<tr>
<td colspan="7" valign="top" width="612">
<h6 style="line-height: 100%; margin-top: 0; margin-bottom: 10"><font size="3">Reconciliation of Guidance for Earnings from Operations for
2005</font></h6>
</td>
</tr>

<tr>
<td valign="bottom" width="430">
  <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"></td>
<td valign="bottom" width="13">
  <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"></td>
<td colspan="5" valign="bottom" width="165" bordercolorlight="#000000">
<h6 align="center" style="line-height: 100%; border-bottom-style: solid; margin-top: 0; margin-bottom: 0">Year Ended December 31, 2005</h6>
</td>
</tr>

<tr>
<td valign="bottom" width="430">
</td>
<td valign="bottom" width="13">
</td>
<td valign="bottom" width="30"></td>
<td valign="bottom" width="49">
</td>
<td valign="bottom" width="9"></td>
<td valign="bottom" width="12">
</td>
<td valign="bottom" width="57">
</td>
</tr>

<tr>
<td valign="bottom" width="430">
<p style="line-height: 100%; margin-bottom: 10">Earnings from Operations EPS Guidance</p>
</td>
<td valign="bottom" width="13">
<p align="right" style="line-height: 100%; margin-top: 0; margin-bottom: 10">$</p>
</td>
<td valign="bottom" width="30">
  <p style="line-height: 100%; margin-top: 0; margin-bottom: 10"></td>
<td valign="bottom" width="49">
<p align="right" style="line-height: 100%; margin-top: 0; margin-bottom: 10">2.15&nbsp;</p>
</td>
<td valign="bottom" width="9">
  <p style="line-height: 100%; margin-top: 0; margin-bottom: 10"></td>
<td valign="bottom" width="12">
<p align="right" style="line-height: 100%; margin-top: 0; margin-bottom: 10">$</p>
</td>
<td valign="bottom" width="57">
<p align="right" style="line-height: 100%; margin-top: 0; margin-bottom: 10">2.25&nbsp;</p>
</td>
</tr>

<tr>
<td valign="bottom" width="430">
<p style="line-height: 100%; margin-bottom: 10">Estimated Items Impacting Comparability<sup>(1)</sup></p>
</td>
<td valign="bottom" width="13">
  <p style="line-height: 100%; margin-top: 0; margin-bottom: 10"></td>
<td colspan="2" valign="bottom" width="81">
  <p style="line-height: 100%; margin-top: 0; margin-bottom: 10"></td>
<td valign="bottom" width="9">
  <p style="line-height: 100%; margin-top: 0; margin-bottom: 10"></td>
<td valign="bottom" width="12">
  <p style="line-height: 100%; margin-top: 0; margin-bottom: 10"></td>
<td valign="bottom" width="57">
  <p style="line-height: 100%; margin-top: 0; margin-bottom: 10"></td>
</tr>

<tr>
<td valign="bottom" width="430">
<p style="text-indent: -10; line-height: 100%; margin-left: 20; margin-top: 10; margin-bottom: 10">Incremental interest expense</p>
</td>
<td valign="bottom" width="13">
  <p style="line-height: 100%; margin-top: 10; margin-bottom: 10"></td>
<td colspan="2" valign="bottom" width="81">
<p align="right" style="line-height: 100%; margin-top: 10; margin-bottom: 10">(0.05)</p>
</td>
<td valign="bottom" width="9">
  <p style="line-height: 100%; margin-top: 10; margin-bottom: 10"></td>
<td valign="bottom" width="12">
  <p style="line-height: 100%; margin-top: 10; margin-bottom: 10"></td>
<td valign="bottom" width="57">
<p align="right" style="line-height: 100%; margin-top: 10; margin-bottom: 10">(0.04)</p>
</td>
</tr>

<tr>
<td valign="bottom" width="430">
<p style="text-indent: -10; line-height: 100%; margin-left: 20; margin-bottom: 10">Costs to retire, renegotiate, or partially refinance Holding
Company Senior Secured Notes</p>
</td>
<td valign="bottom" width="13">
  <p style="line-height: 100%; margin-top: 0; margin-bottom: 10"></td>
<td colspan="2" valign="bottom" width="81">
<p align="right" style="line-height: 100%; border-bottom-style: solid; margin-top: 0; margin-bottom: 10">(0.07)</p>
</td>
<td valign="bottom" width="9">
  <p style="line-height: 100%; margin-top: 0; margin-bottom: 10"></td>
<td valign="bottom" width="12">
  <p style="line-height: 100%; margin-top: 0; margin-bottom: 10"></td>
<td valign="bottom" width="57">
<p align="right" style="line-height: 100%; border-bottom-style: solid; margin-top: 0; margin-bottom: 10">-&nbsp;</p>
</td>
</tr>

<tr>
<td valign="bottom" width="430">
<p style="line-height: 100%">Reported EPS Guidance&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="bottom" width="13">
<p align="right" style="line-height: 100%; margin-top: 0; margin-bottom: 0">$</p>
</td>
<td valign="bottom" width="79" colspan="2" align="right">
  <p style="line-height: 100%; border-bottom-style: double; margin-top: 0; margin-bottom: 0">2.03</td>
<td valign="bottom" width="9">
  <p style="line-height: 100%; margin-top: 0; margin-bottom: 0"></td>
<td valign="bottom" width="12">
<p align="right" style="line-height: 100%; margin-top: 0; margin-bottom: 0">$</p>
</td>
<td valign="bottom" width="57">
<p align="right" style="line-height: 100%; border-bottom-style: double; margin-top: 0; margin-bottom: 0">2.21</p>
</td>
</tr>

</table>

<p style="margin-top: 0; margin-bottom: 0"></p>

<table border="0" cellspacing="0" cellpadding="0" width="614">
<tr>
<td valign="top">
<p align="center" style="margin-left: 3; margin-top: 10; margin-bottom: 10"><font size="2">(1)</font></p>
</td>
<td valign="top">
<p style="margin-left: 3; margin-top: 10; margin-bottom: 10"><font size="2">The range of potential outcomes is developed using a range of
dollar estimates and a range of estimated shares outstanding for
the items presented.</font></p>
</td>
</tr>
</table>

<table border="0" cellspacing="0" cellpadding="0" width="614">
<tr>
<td valign="top">
<p style="text-indent: 10; margin-bottom: 10">PG&amp;E Corporation presents results and guidance on an
&ldquo;earnings from operations&rdquo; basis in order to provide
investors with a measure that reflects the underlying financial
performance of the business and offers investors a basis on which
to compare performance from one period to another exclusive of
items that in management&rsquo;s judgment are not reflective of the
normal course of operations.</p>
</td>
</tr>
</table>

<p align="center"></p>

<table border="0" cellspacing="0" cellpadding="0" width="614">
<tr>
<td valign="top">
<p align="center">###</p>
</td>
</tr>
</table>

<p></p>

<table border="0" cellspacing="0" cellpadding="0" width="614">
<tr>
<td valign="top">
<p style="margin-top: 0; margin-bottom: 4">This press release contains forward-looking statements regarding
estimated earnings for 2005, anticipated cash flows in 2005, and
management&rsquo;s projected uses of cash in 2005 including the
anticipated payment of dividends and targeted stock repurchases.
These statements are based on current expectations and assumptions
which management believes are reasonable and on information
currently available to management but are necessarily subject to
various risks and uncertainties. Actual results could differ
materially from those contemplated by the forward-looking
statements. Some of the factors that could cause future results to
differ materially include: </p>
</td>
</tr>

<tr>
<td valign="top">
<ul type="disc">
<li>
  <p style="margin-top: 0; margin-bottom: 4">The timing and resolution of the petitions for review that were
filed in the California Court of Appeal seeking review of the
California Public Utility Commission&rsquo;s (CPUC) December 18,
2003 decision approving Pacific Gas and Electric Company&rsquo;s
Settlement Agreement and the CPUC's March 16, 2004 denial of
applications for rehearing of the December 18, 2003 decision;</li>
</ul>
</td>
</tr>

<tr>
<td valign="top">
<ul type="disc">
<li>
  <p style="margin-top: 0; margin-bottom: 4">The timing and resolution of the pending appeals of the
bankruptcy court's order confirming the Utility&rsquo;s Plan of
Reorganization;</li>
</ul>
</td>
</tr>

<tr>
<td valign="top">
<ul type="disc">
<li>
  <p style="margin-top: 0; margin-bottom: 4">Whether the conditions to securitizing the $2.21 billion
after-tax regulatory asset established under the Settlement
Agreement are met, and if so, the timing and amount of the
securitization;</li>
</ul>
</td>
</tr>

<tr>
<td valign="top">
<ul type="disc">
<li>
  <p style="margin-top: 0; margin-bottom: 4">Whether the CPUC approves the Utility's long-term electricity
resource plan and adopts the Utility's related ratemaking
proposals, whether the assumptions and forecasts underlying the
long-term resource plan prove to be accurate, and what terms and
conditions are included in the long-term resource commitments the
Utility enters into in connection with its long-term resource
plan;</li>
</ul>
</td>
</tr>

<tr>
<td valign="top">
<ul type="disc">
<li>
  <p style="margin-top: 0; margin-bottom: 4">Unanticipated changes in operating expenses or capital
expenditures affecting the Utility&rsquo;s ability to earn its
authorized rate of return;</li>
</ul>
</td>
</tr>

<tr>
<td valign="top">
<ul type="disc">
<li>
  <p style="margin-top: 0; margin-bottom: 4">The level and volatility of wholesale electricity and natural
gas prices and supplies, the Utility's ability to manage and
respond to the levels and volatility successfully, and the extent
to which the Utility is able to timely recover increased costs
related to such volatility;</li>
</ul>
</td>
</tr>

<tr>
<td valign="top">
<ul type="disc">
<li>
  <p style="margin-top: 0; margin-bottom: 4">The extent to which the Utility's residual net open position
(<em>i.e</em>., that portion of the Utility's electricity
customers' demand not satisfied by electricity that the Utility
generates or has under contract, or by electricity provided under
the California Department of Water Resources electricity contracts
allocated to the Utility's customers) increases or decreases;</li>
</ul>
</td>
</tr>

<tr>
<td valign="top">
<ul type="disc">
<li>
  <p style="margin-top: 0; margin-bottom: 4">The operation of the Utility's Diablo Canyon Nuclear Power
Plant (Diablo Canyon) which exposes the Utility to potentially
significant environmental and capital expenditure outlays and, to
the extent the Utility is unable to increase its spent fuel storage
capacity by 2007 or find an alternative depository, the risk that
the Utility may be required to close Diablo Canyon and purchase
electricity from more expensive sources;</li>
</ul>
</td>
</tr>

<tr>
<td valign="top">
<ul type="disc">
<li>
  <p style="margin-top: 0; margin-bottom: 4">The impact of current and future ratemaking actions of the
CPUC, including the risk of material differences between forecasted
costs used to determine rates and actual costs incurred;</li>
</ul>
</td>
</tr>

<tr>
<td valign="top">
<ul type="disc">
<li>
  <p style="margin-top: 0; margin-bottom: 4">The extent to which the CPUC or the Federal Energy Regulatory
Commission delays or denies recovery of the Utility's costs from
customers due to a regulatory determination that such costs were
not reasonable or prudent or for other reasons resulting in
write-offs of regulatory balancing accounts;</li>
</ul>
</td>
</tr>

<tr>
<td valign="top">
<ul type="disc">
<li>
  <p style="margin-top: 0; margin-bottom: 4">How the CPUC administers the capital structure, stand-alone
dividend and first priority conditions of the CPUC's decisions
permitting the establishment of holding companies for California
investor-owned electric utilities;</li>
</ul>
</td>
</tr>

<tr>
<td valign="top">
<ul type="disc">
<li>
  <p style="margin-top: 0; margin-bottom: 4">The impact of future legislative or regulatory actions or
policies;</li>
</ul>
</td>
</tr>

<tr>
<td valign="top">
<ul type="disc">
<li>
  <p style="margin-top: 0; margin-bottom: 4">Increased competition;</li>
</ul>
</td>
</tr>

<tr>
<td valign="top">
<ul type="disc">
<li>
  <p style="margin-top: 0; margin-bottom: 4">The outcome of pending litigation; and</li>
</ul>
</td>
</tr>

<tr>
<td valign="top">
<ul type="disc">
<li>
  <p style="margin-top: 0; margin-bottom: 4">Other factors discussed in PG&amp;E Corporation's and Pacific
Gas and Electric Company's SEC reports.</li>
</ul>
</td>
</tr>
</table>

<p></p>
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