<SUBMISSION>
<ACCESSION-NUMBER>0001004980-05-000134
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>12
<PERIOD>20050331
<FILING-DATE>20050504
<DATE-OF-FILING-DATE-CHANGE>20050504
<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>10-Q
<ACT>34
<FILE-NUMBER>001-12609
<FILM-NUMBER>05797904
</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>10-Q
<SEQUENCE>1
<FILENAME>pge10q_q105.htm
<DESCRIPTION>CORP Q1 2005 FORM 10-Q
<TEXT>
<HTML>
<HEAD>

<META NAME="Generator" CONTENT="Microsoft Word 97">
<TITLE>(Mark One)</TITLE>
</HEAD>
<BODY LINK="#0000ff" VLINK="#800080">

<P ALIGN="CENTER"></P>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=648>
<TR><TD VALIGN="TOP" COLSPAN=8 BGCOLOR="#000000" HEIGHT=2>
<FONT SIZE=2><P>Transition</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=3><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
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<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=17><P></P></TD>
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<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=40>
<B><FONT SIZE=2><P ALIGN="CENTER">UNITED STATES SECURITIES AND EXCHANGE COMMISSION<BR>
Washington, D.C., 20549<BR>
FORM 10-Q</B></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=3 HEIGHT=10>
<FONT SIZE=2><P ALIGN="CENTER"><A NAME="_Toc21178855"><A NAME="_Toc21178973">(Mark One)</A></A></FONT></TD>
<TD WIDTH="89%" VALIGN="TOP" COLSPAN=5 HEIGHT=10><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" HEIGHT=10><P></P></TD>
<TD WIDTH="93%" VALIGN="TOP" COLSPAN=7 HEIGHT=10><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><A NAME="_Toc21178856"><A NAME="_Toc21178974">[X]</A></A></FONT></TD>
<TD WIDTH="93%" VALIGN="TOP" COLSPAN=7>
<FONT SIZE=2><P ALIGN="CENTER">QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE<BR>
SECURITIES EXCHANGE ACT OF 1934 </FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8>
<FONT SIZE=2><P ALIGN="CENTER">For the quarterly period ended March 31, 2005<BR>
 <BR>
OR</FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="93%" VALIGN="TOP" COLSPAN=6>&nbsp;</TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><A NAME="_Toc21178857"><A NAME="_Toc21178975">[&nbsp;&nbsp;]</A></A></FONT></TD>
<TD WIDTH="93%" VALIGN="TOP" COLSPAN=7>
<FONT SIZE=2><P ALIGN="CENTER">TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE<BR>
SECURITIES EXCHANGE ACT OF 1934</FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="93%" VALIGN="TOP" COLSPAN=6>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8>
<FONT SIZE=2><P ALIGN="CENTER">For the transition period from ___________ to __________</FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="93%" VALIGN="TOP" COLSPAN=6>&nbsp;</TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP" COLSPAN=4>
<FONT SIZE=2><P><BR>
Commission<BR>
File<BR>
Number<BR>
_______________</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P>Exact Name of <BR>
Registrant<BR>
as specified<BR>
in its charter<BR>
_______________</FONT></TD>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P><BR>
State or other<BR>
Jurisdiction of <BR>
Incorporation<BR>
______________</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P><BR>
IRS Employer<BR>
Identification<BR>
Number<BR>
___________</FONT></TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP" COLSPAN=4>&nbsp;</TD>
<TD WIDTH="33%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP" COLSPAN=4>
<FONT SIZE=2><P><A NAME="_Toc21178858"><A NAME="_Toc21178976">1-12609</A></A></FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P><A NAME="_Toc21178859"><A NAME="_Toc21178977">PG&amp;E Corporation</A></A></FONT></TD>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P><A NAME="_Toc21178860"><A NAME="_Toc21178978">California</A></A></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P><A NAME="_Toc21178861"><A NAME="_Toc21178979">94-3234914</A></A></FONT></TD>
</TR>
<TR><TD WIDTH="19%" VALIGN="TOP" COLSPAN=4>
<FONT SIZE=2><P><A NAME="_Toc21178862"><A NAME="_Toc21178980">1-2348</A></A></FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P>Pacific Gas and Electric Company</FONT></TD>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>California</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P>94-0742640</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8>&nbsp;</TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=5>
<FONT SIZE=2><P>Pacific Gas and Electric Company<BR>
77 Beale Street<BR>
P.O. Box 770000<BR>
San Francisco, California 94177<BR>
________________________________________</FONT></TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P>PG&amp;E Corporation<BR>
One Market, Spear Tower<BR>
Suite 2400<BR>
San Francisco, California 94105<BR>
______________________________________</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8>
<FONT SIZE=2><P ALIGN="CENTER"><A NAME="_Toc21178863"><A NAME="_Toc21178981">Address of principal executive offices, <A NAME="_Toc21178864"><A NAME="_Toc21178982"></A></A>including zip code</A></A></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8>&nbsp;</TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=5 HEIGHT=34>
<FONT SIZE=2><P>Pacific Gas and Electric Company<BR>
(415) 973-7000<BR>
________________________________________</FONT></TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=3 HEIGHT=34>
<FONT SIZE=2><P>PG&amp;E Corporation<BR>
(415) 267-7000<BR>
______________________________________</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8>
<FONT SIZE=2><P ALIGN="CENTER"><A NAME="_Toc21178865"><A NAME="_Toc21178983">Registrant's telephone number, including area code</A></A></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8>
<FONT SIZE=2><P><A NAME="_Toc21178866"><A NAME="_Toc21178984">Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.</A></A></FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=5>&nbsp;</TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=3>&nbsp;</TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=5>
<FONT SIZE=2><P><A NAME="_Toc21178867"><A NAME="_Toc21178985">Yes<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</A></A>X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P><A NAME="_Toc21178868"><A NAME="_Toc21178986">No</A></A><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=10>
<FONT SIZE=2><P>Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=5>&nbsp;</TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=3>&nbsp;</TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=5>
<FONT SIZE=2><P>Yes<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P>No<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=15>
<FONT SIZE=2><P><A NAME="_Toc21178869"><A NAME="_Toc21178987">Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of latest practicable date.</A></A></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8>&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" COLSPAN=6>
<FONT SIZE=2><P><A NAME="_Toc21178870"><A NAME="_Toc21178988">Common Stock Outstanding, April 28, 2005:</A></A></FONT></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=5>
<FONT SIZE=2><P><A NAME="_Toc21178871"><A NAME="_Toc21178989">PG&amp;E Corporation</A></A></FONT></TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P><A NAME="_Toc21178872"><A NAME="_Toc21178990">370,087,968 shares</A></A> (excluding 24,665,500<B> </B>shares held by a wholly owned subsidiary)</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=5>
<FONT SIZE=2><P><A NAME="_Toc21178873"><A NAME="_Toc21178991">Pacific Gas and Electric Company</A></A></FONT></TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P><A NAME="_Toc21178874"><A NAME="_Toc21178992">Wholly owned by PG&amp;E Corporation</A></A></FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" COLSPAN=5>&nbsp;</TD>
<TD WIDTH="48%" VALIGN="TOP" COLSPAN=3>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 HEIGHT=3><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=8 BGCOLOR="#000000" HEIGHT=2><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="CENTER">PG&amp;E CORPORATION AND<BR>
PACIFIC GAS AND ELECTRIC COMPANY, <BR>
FORM 10-Q<BR>
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005<BR>
TABLE OF CONTENTS<BR>
</P></B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=576>
<TR><TD WIDTH="10%" VALIGN="TOP">
<B><FONT SIZE=2><P>PART I.</B></FONT></TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<B><FONT SIZE=2><P>FINANCIAL INFORMATION</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="CENTER">PAGE</B></FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<P><A HREF="#item_1_cons_fin_state"><FONT SIZE=2>ITEM 1.</FONT></A></TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P>CONSOLIDATED FINANCIAL STATEMENTS</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P>PG&amp;E Corporation</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="79%" VALIGN="TOP" COLSPAN=2>
<P><A HREF="#cond_cons_state_inc_corp"><FONT SIZE=2>Condensed Consolidated Statements of Income</FONT></A></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">3</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="79%" VALIGN="TOP" COLSPAN=2>
<P><A HREF="#_CONDENSED_CONSOLIDATED_BALANCE"><FONT SIZE=2>Condensed Consolidated Balance Sheets</FONT></A></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">4</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="79%" VALIGN="TOP" COLSPAN=2>
<P><A HREF="#_CONDENSED_CONSOLIDATED_STATEMENTS"><FONT SIZE=2>Condensed Consolidated Statements of Cash Flows</FONT></A></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">6</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P>Pacific Gas and Electric Company</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="79%" VALIGN="TOP" COLSPAN=2>
<P><A HREF="#cond_cons_state_inc_comp"><FONT SIZE=2>Condensed Consolidated Statements of Income</FONT></A></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">8</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="79%" VALIGN="TOP" COLSPAN=2>
<P><A HREF="#_CONDENSED_CONSOLIDATED_BALANCE"><FONT SIZE=2>Condensed Consolidated Balance Sheets</FONT></A></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">9</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="79%" VALIGN="TOP" COLSPAN=2>
<P><A HREF="#_Cash_Flows_From"><FONT SIZE=2>Condensed Consolidated Statements of Cash Flows</FONT></A></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">11</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P>NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P><A HREF="#_NOTE_1:_"><FONT SIZE=2>NOTE 1:</FONT></A></TD>
<TD WIDTH="71%" VALIGN="TOP">
<FONT SIZE=2><P>General</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">13</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P><A HREF="#_NOTE_2:_"><FONT SIZE=2>NOTE 2:</FONT></A></TD>
<TD WIDTH="71%" VALIGN="TOP">
<FONT SIZE=2><P>The Utility's Emergence from Chapter 11</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">22</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P><A HREF="#note_3_debt"><FONT SIZE=2>NOTE 3:</FONT></A></TD>
<TD WIDTH="71%" VALIGN="TOP">
<FONT SIZE=2><P>Debt</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">22</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P><A HREF="#_NOTE_4:_"><FONT SIZE=2>NOTE 4:</FONT></A></TD>
<TD WIDTH="71%" VALIGN="TOP">
<FONT SIZE=2><P>Energy Recovery Bonds </FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">27</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P><A NAME="env_lgl_mda"></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P><A HREF="#NOTE_5"><FONT SIZE=2>NOTE 5</FONT></A><FONT SIZE=2 COLOR="#0000ff">:</FONT></TD>
<TD WIDTH="71%" VALIGN="TOP">
<FONT SIZE=2><P>Shareholders' Equity</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">28</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=2><P></A></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P><A HREF="#_NOTE_5:_"><FONT SIZE=2>NOTE 6:</FONT></A></TD>
<TD WIDTH="71%" VALIGN="TOP">
<FONT SIZE=2><P>Risk Management Activities</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">29</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P><A HREF="#_NOTE_6:_"><FONT SIZE=2>NOTE 7:</FONT></A></TD>
<TD WIDTH="71%" VALIGN="TOP">
<FONT SIZE=2><P>Commitments and Contingencies</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">31</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<P><A HREF="#note_8"><FONT SIZE=2>NOTE 8:</FONT></A></TD>
<TD WIDTH="71%" VALIGN="TOP">
<FONT SIZE=2><P>Subsequent Events</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">38</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5>&nbsp;</TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP" HEIGHT=28>
<P><A HREF="#item_2_management"><FONT SIZE=2>ITEM 2.</FONT></A></TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3 HEIGHT=28>
<FONT SIZE=2><P>MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL<BR>
CONDITION AND RESULTS OF OPERATIONS</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=28><P></P></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<P><A HREF="#_OVERVIEW__[Corp."><FONT SIZE=2>Overview</FONT></A><FONT SIZE=2 COLOR="#0000ff"> </FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">39</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<P><A HREF="#results_of_operations"><FONT SIZE=2>Results of Operations</FONT></A><FONT SIZE=2 COLOR="#0000ff"> </FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">44</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<P><A HREF="#liquidity_and_financial_resources"><FONT SIZE=2>Liquidity and Financial Resources</FONT></A></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">49</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<P><A HREF="#contractual_commitments"><FONT SIZE=2>Contractual Commitments</FONT></A><FONT SIZE=2 COLOR="#0000ff"> </FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">54</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<P><A HREF="#capital_expenditures"><FONT SIZE=2>Capital Expenditures</FONT></A></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">55</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<P><A HREF="#off_balance_sheet"><FONT SIZE=2>Off-Balance Sheet Arrangements</FONT></A></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">55</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<P><A HREF="#contingencies"><FONT SIZE=2>Contingencies</FONT></A></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">55</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<P><A HREF="#_RISK_MANAGEMENT_ACTIVITIES"><FONT SIZE=2>Risk Management Activities</FONT></A></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">58</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<P><A HREF="#critical_acctg_mda"><FONT SIZE=2>Critical Accounting Policies</FONT></A><FONT SIZE=2 COLOR="#0000ff">&#9;</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">62</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<P><A HREF="#_ACCOUNTING_PRONOUNCEMENTS_ISSUED"><FONT SIZE=2>Accounting Pronouncements Issued But Not Yet Adopted</FONT></A></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">63</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<P><A HREF="#_TAXATION_MATTERS"><FONT SIZE=2>Taxation Matters</FONT></A></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">63</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<P><A HREF="#add_security_mda"><FONT SIZE=2>Additional Security Measures</FONT></A></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">64</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<P><A HREF="#environmental_and_legal_matters"><FONT SIZE=2>Environmental and Legal Matters</FONT></A></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">64</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5>&nbsp;</TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<P><A HREF="#_ITEM_3:_"><FONT SIZE=2>ITEM 3.</FONT></A></TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P>QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">64</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<P><A HREF="#_ITEM_4._"><FONT SIZE=2>ITEM 4.</FONT></A></TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P>CONTROLS AND PROCEDURES</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">64</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5>&nbsp;</TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<B><FONT SIZE=2><P>PART II.</B></FONT></TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<B><FONT SIZE=2><P>OTHER INFORMATION</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5>&nbsp;</TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<P><A HREF="#item_1_legal_proceedings"><FONT SIZE=2>ITEM 1.</FONT></A></TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P>LEGAL PROCEEDINGS</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">66</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<P><A HREF="#item_2_changes_in_securities"><FONT SIZE=2>ITEM 2.</FONT></A></TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P>CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">67</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<P><A HREF="#item_4_submission_of_matters"><FONT SIZE=2>ITEM 4.</FONT></A></TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P>SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">68</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<P><A HREF="#other_information"><FONT SIZE=2>ITEM 5.</FONT></A></TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P>OTHER INFORMATION</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">70</FONT></TD>
</TR>
<TR><TD WIDTH="10%" VALIGN="TOP">
<P><A HREF="#item_6_exhibits"><FONT SIZE=2>ITEM 6.</FONT></A></TD>
<TD WIDTH="81%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P>EXHIBITS</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">70</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5>&nbsp;</TD>
</TR>
<TR><TD WIDTH="92%" VALIGN="TOP" COLSPAN=4>
<P><A HREF="#_SIGNATURES"><FONT SIZE=2>SIGNATURES</FONT></A><FONT SIZE=2 COLOR="#0000ff"> </FONT></TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">72</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">PART I.  FINANCIAL INFORMATION<BR>
<A NAME="item_1_cons_fin_state"></A>ITEM 1:  CONSOLIDATED FINANCIAL STATEMENTS<BR>
</P></B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=648>
<TR><TD VALIGN="TOP" COLSPAN=11 HEIGHT=16>
<B><FONT SIZE=2><P><A NAME="_PG&amp;E_CORPORATION"></A>PG&amp;E CORPORATION</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11 HEIGHT=13>
<B><FONT SIZE=2><P><A NAME="cond_cons_state_inc_corp">CONDENSED CONSOLIDATED STATEMENTS OF INCOME</A></B></FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="30%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">(Unaudited)</B></FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="30%" VALIGN="TOP" COLSPAN=6 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<B><FONT SIZE=2><P>(in millions, except per share amounts)</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="30%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="30%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="30%" VALIGN="TOP" COLSPAN=6 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<B><FONT SIZE=2><P>Operating Revenues</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Electric</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,660&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,791&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Natural gas</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,009&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">931&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating revenues</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,669&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,722&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=17>
<B><FONT SIZE=2><P>Operating Expenses</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Cost of electricity </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">396&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">561&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Cost of natural gas </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">620&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">578&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Operating and maintenance</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">767&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">816&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Recognition of regulatory assets</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;  </FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(4,900)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Depreciation, amortization and decommissioning</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">385&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">312&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Reorganization professional fees and expenses</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating (gain) expenses</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,168&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(2,631)</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=17>
<B><FONT SIZE=2><P>Operating Income </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">501&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">5,353&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Reorganization interest income</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">8&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Interest income </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">21&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Interest expense</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(161)</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(231)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Other expense, net</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(1)</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(27)</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P>Income Before Income Taxes</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">360&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">5,109&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Income tax provision</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">142&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,076&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<B><FONT SIZE=2><P>Net Income </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">218&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3,033&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=17>
<B><FONT SIZE=2><P>Weighted Average Common Shares Outstanding, Basic</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">388&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">393&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P>Net Earnings Per Common Share, Basic</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">0.55&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">7.36&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<B><FONT SIZE=2><P>Net Earnings Per Common Share, Diluted</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">0.54&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">7.15&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P>Dividends Declared Per Common Share</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">0.30&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=11><P></P></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=11><P></P></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=11 HEIGHT=19>
<FONT SIZE=2><P ALIGN="CENTER">See accompanying Notes to the Condensed Consolidated Financial Statements.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P></B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=586>
<TR><TD VALIGN="BOTTOM" COLSPAN=10 HEIGHT=16>
<B><FONT SIZE=2><P>PG&amp;E CORPORATION</B></FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=10 HEIGHT=16>
<B><FONT SIZE=2><P>CONDENSED CONSOLIDATED BALANCE SHEETS</B></FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="35%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">Balance At</B></FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="52%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="35%" VALIGN="TOP" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">December 31, </B></FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=30><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=30>
<B><FONT SIZE=2><P ALIGN="CENTER">2005<BR>
(Unaudited)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=30><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=30>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="52%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>ASSETS</B></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>Current Assets</B></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Cash and cash equivalents</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,381&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">972&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Restricted cash</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,858&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,980&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Accounts receivable:</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=30>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customers (net of allowance for doubtful accounts of $88 <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million in 2005 and $93 million in 2004)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=30>
<FONT SIZE=2><P ALIGN="RIGHT">1,916&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=30><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=30>
<FONT SIZE=2><P ALIGN="RIGHT">2,085&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regulatory balancing accounts</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">968&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,021&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Inventories:</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gas stored underground</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">83&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">175&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Materials and supplies</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">131&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">129&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Prepaid expenses and other</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">55&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">46&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="52%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,392&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,408&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="52%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>Property, Plant and Equipment</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Electric</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">21,689&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">21,519&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Gas</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">8,574&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">8,526&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Construction work in progress</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">518&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">449&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Other</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">15&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">15&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="52%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total property, plant and equipment </B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">30,796&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">30,509&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Accumulated depreciation </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(11,728)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(11,520)</FONT></TD>
</TR>
<TR><TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="52%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net property, plant and equipment</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">19,068&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">18,989&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="52%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>Other Noncurrent Assets</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Regulatory assets</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">6,412&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">6,526&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Nuclear decommissioning funds</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,627&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,629&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp;Other</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">938&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">988&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="52%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other noncurrent assets</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">8,977&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">9,143&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="52%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>TOTAL ASSETS</B></FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">34,437&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">34,540&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="52%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="52%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="52%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=10 HEIGHT=7><P></P></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=10 HEIGHT=21>
<FONT SIZE=2><P ALIGN="CENTER">See accompanying Notes to the Condensed Consolidated Financial Statements.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P></B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=600>
<TR><TD VALIGN="BOTTOM" COLSPAN=11 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;</P>
<B><P>PG&amp;E CORPORATION</B></FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=11 HEIGHT=16>
<B><FONT SIZE=2><P>CONDENSED CONSOLIDATED BALANCE SHEETS</B></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="34%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">Balance At</B></FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="47%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" COLSPAN=6 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>(in millions, except share amounts)</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">December 31, </B></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=28><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=3 HEIGHT=28>
<B><FONT SIZE=2><P ALIGN="CENTER">2005<BR>
(Unaudited)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=28><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=28>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>LIABILITIES AND SHAREHOLDERS' EQUITY</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>Current Liabilities</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Short-term borrowings</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">300&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Long-term debt, classified as current</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">457&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">758&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Rate reduction bonds, classified as current</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">290&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">290&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Energy recovery bonds, classified as current </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">197&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Accounts payable:</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade creditors</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">500&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">762&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Disputed claims and customer refunds</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,142&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,142&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regulatory balancing accounts</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">574&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">369&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">499&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">352&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Interest payable</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">432&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">461&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Income taxes payable</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">388&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">185&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Deferred income taxes</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">374&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">394&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Other</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">879&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">905&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,732&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,918&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>Noncurrent Liabilities </B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Long-term debt</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,722&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">7,323&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Rate reduction bonds</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">506&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">580&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Energy recovery bonds</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,691&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Regulatory liabilities</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3,869&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">4,035&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Asset retirement obligations</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,325&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,301&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Deferred income taxes</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3,490&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3,531&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Deferred tax credits</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">119&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">121&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=52>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Preferred stock of subsidiary with mandatory redemption provisions<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(redeemable, 6.30% and 6.57%, outstanding 4,800,000 shares, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;due 2005-2009)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=52>
<FONT SIZE=2><P ALIGN="RIGHT">120&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=52><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=52>
<FONT SIZE=2><P ALIGN="RIGHT">122&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Other</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,756&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,690&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Total noncurrent liabilities </B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">19,598&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">18,703&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>Commitments and Contingencies (Notes 1, 2, and 7)</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>Preferred Stock of Subsidiaries</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">286&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">286&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>Preferred Stock</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=33>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Preferred stock, no par value, 80,000,000 shares, $100 par value,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,000,000 shares, none issued</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=33><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>Common Shareholders' Equity</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=45>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Common stock, no par value, authorized 800,000,000 shares, <BR>
&nbsp;&nbsp;&nbsp;issued 393,170,435 common and 1,400,062 restricted shares in 2005<BR>
&nbsp;&nbsp;&nbsp;and 417,014,431 common and 1,601,710 restricted shares in 2004</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=45>
<FONT SIZE=2><P ALIGN="RIGHT">6,196&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=45><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=45>
<FONT SIZE=2><P ALIGN="RIGHT">6,518&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Common stock held by subsidiary, at cost, 24,665,500 shares</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(718)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(718)</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Unearned compensation</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(31)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(26)</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Accumulated earnings </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,379&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,863&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(5)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(4)</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Total common shareholders' equity</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">7,821&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">8,633&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY</B></FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">34,437&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">34,540&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11 HEIGHT=9><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11 HEIGHT=22>
<FONT SIZE=2><P ALIGN="CENTER">See accompanying Notes to the Condensed Consolidated Financial Statements.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P></B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=587>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4>
<B><FONT SIZE=2><P>PG&amp;E CORPORATION</B></FONT></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=6>&nbsp;</TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=10>
<B><FONT SIZE=2><P><A NAME="_CONDENSED_CONSOLIDATED_STATEMENTS"></A>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</B></FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4>&nbsp;</TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=6>
<B><FONT SIZE=2><P ALIGN="CENTER">(Unaudited)</B></FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=6 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=6>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4>&nbsp;</TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=6>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=6 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=3>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<B><FONT SIZE=2><P>Cash Flows From Operating Activities</B></FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Net income</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">218&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3,033&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to </FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;net cash provided by operating activities:</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation, amortization and decommissioning</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">385&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">312&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recognition of regulatory assets</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(4,900)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes and tax credits, net</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(63)</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,926&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other deferred charges and noncurrent liabilities</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(45)</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">237&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax benefit on employee stock options exercises</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">25&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of assets</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(16)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Net effect of changes in operating assets and liabilities:</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">96&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(128)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">169&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">352&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">90&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">82&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(115)</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(257)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued taxes</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">202&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">65&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regulatory balancing accounts, net </FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">254&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(53)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other working capital</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(182)&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">287&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=32>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Payments authorized by the bankruptcy court on amounts classified as &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;liabilities subject to compromise</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=32>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=32><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=32>
<FONT SIZE=2><P ALIGN="RIGHT">(20)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Other, net</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">14&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(33)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<B><FONT SIZE=2><P>Net cash provided by operating activities</B></FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,048&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">887&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="61%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>Cash Flows From Investing Activities</B></FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Capital expenditures</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(349)</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(342)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Net proceeds from sale of assets</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">11&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">18&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Decrease (increase) in restricted cash</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">26&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(6,917)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Other, net</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">26&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(65)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<B><FONT SIZE=2><P>Net cash used in investing activities</B></FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(286)</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(7,306)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>Cash Flows From Financing Activities</B></FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="TOP" COLSPAN=4 HEIGHT=32>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Net repayments under credit facilities and short-term <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;borrowings</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=32>
<FONT SIZE=2><P ALIGN="RIGHT">(300)</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=32><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=32>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=33>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Proceeds from issuance of long-term debt, net of issuance costs of<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$153 million in 2004</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=33><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">6,547&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Proceeds from issuance of energy recovery bonds, net of issuance<BR>
&nbsp;&nbsp;&nbsp;costs of $14 million in 2005</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,874&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Long-term debt matured, redeemed or repurchased</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(902)</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(310)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Rate reduction bonds matured</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(74)</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(74)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Preferred stock with mandatory redemption provisions redeemed</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(2)</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Common stock issued</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">120&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">58&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Common stock repurchased</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(1,065)</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Preferred dividends paid</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(4)</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>Net cash (used in) provided by financing activities</B></FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(353)</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,221&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<B><FONT SIZE=2><P>Net change in cash and cash equivalents</B></FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">409&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(198)</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>Cash and cash equivalents at January 1</B></FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">972&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3,658&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<B><FONT SIZE=2><P>Cash and cash equivalents at March 31</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,381&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3,460&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>Supplemental disclosures of cash flow information</B></FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Cash received for:</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reorganization interest income</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">8&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Cash paid for:</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest (net of amounts capitalized)</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">267&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">197&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes refunded, net</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(14)</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reorganization professional fees and expenses</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">5&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=33>
<B><FONT SIZE=2><P>Supplemental disclosures of noncash investing and financing<BR>
&nbsp;&nbsp;&nbsp;activities</B></FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=33><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=33><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=33><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;Common stock dividends declared but not yet paid</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">111&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=33>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transfer of liabilities and other payables subject to compromise<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to operating assets and liabilities</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">(257)</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=10 HEIGHT=5><P></P></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=10>
<FONT SIZE=2><P ALIGN="CENTER">See accompanying Notes to the Condensed Consolidated Financial Statements.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P></B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=641>
<TR><TD WIDTH="65%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<B><FONT SIZE=2><P>PACIFIC GAS AND ELECTRIC COMPANY</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=6 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<B><FONT SIZE=2><P><A NAME="cond_cons_state_inc_comp"></A>CONDENSED CONSOLIDATED STATEMENTS OF INCOME</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=6 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">(Unaudited)</B></FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=6 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=6 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<B><FONT SIZE=2><P>Operating Revenues</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Electric </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,660&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,791&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P>Natural gas</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,009&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">931&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="53%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P><A NAME="_Total_operating_revenues"></A>Total operating revenues</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,669&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,722&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<B><FONT SIZE=2><P>Operating Expenses</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P>Cost of electricity</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">396&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">561&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Cost of natural gas</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">620&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">578&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P>Operating and maintenance</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">773&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">808&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Recognition of regulatory assets</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(4,900)</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P>Depreciation, amortization and decommissioning</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">385&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">311&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Reorganization professional fees and expenses</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="53%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P>Total operating (gain) expenses</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,174&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(2,640)</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>Operating Income </B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">495&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">5,362&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P>Reorganization interest income</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">8&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Interest income</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">20&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=19>
<FONT SIZE=2><P>Interest expense </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=19><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">(154)</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=19><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">(213)</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Other income, net</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">4&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">13&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P>Income Before Income Taxes</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">365&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">5,173&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Income tax provision </FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">142&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,099&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" COLSPAN=4 HEIGHT=15>
<B><FONT SIZE=2><P>Net Income </B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">223&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">3,074&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=17><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=17>
<FONT SIZE=2><P>Preferred dividend requirement</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">4&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">8&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P>Income Available for Common Stock</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">219&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">3,066&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11 HEIGHT=11><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">See accompanying Notes to the Condensed Consolidated Financial Statements.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P></B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=575>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=16>
<B><FONT SIZE=2><P>PACIFIC GAS AND ELECTRIC COMPANY</B></FONT></TD>
<TD WIDTH="35%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=16>
<B><FONT SIZE=2><P><A NAME="_CONDENSED_CONSOLIDATED_BALANCE"></A>CONDENSED CONSOLIDATED BALANCE SHEETS</B></FONT></TD>
<TD WIDTH="35%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=16><P></P></TD>
<TD WIDTH="35%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">Balance At</B></FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="35%" VALIGN="TOP" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=16>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">December 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">(Unaudited)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>ASSETS</B></FONT></TD>
<TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=16>
<B><FONT SIZE=2><P>Current Assets</B></FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="62%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Cash and cash equivalents</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,056&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">783&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="62%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>Restricted cash</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,857&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,980&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="62%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>Accounts receivable:</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="58%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Customers (net of allowance for doubtful accounts of <BR>
</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="56%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>$88 million in 2005 and $93 million in 2004)</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,916&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,085&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="58%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P>Related parties</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="58%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Regulatory balancing accounts</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">968&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,021&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="62%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>Inventories:</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="58%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P>Gas stored underground and fuel oil</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">83&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">175&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="58%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Materials and supplies</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">131&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">129&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="62%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>Prepaid expenses and other</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">54&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">43&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>Total current assets</B></FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,067&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,218&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=16>
<B><FONT SIZE=2><P>Property, Plant and Equipment</B></FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="62%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>Electric</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">21,689&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">21,519&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="62%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Gas</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">8,574&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">8,526&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="62%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>Construction work in progress</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">518&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">449&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>Total property, plant and equipment </B></FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">30,781&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">30,494&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="62%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P>Accumulated depreciation </FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(11,715)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(11,507)</FONT></TD>
</TR>
<TR><TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>Net property, plant and equipment</B></FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">19,066&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">18,987&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=16>
<B><FONT SIZE=2><P>Other Noncurrent Assets</B></FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="62%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
<FONT SIZE=2><P>Regulatory assets</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">6,412&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">6,526&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="62%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Nuclear decommissioning funds</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,627&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,629&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="62%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P ALIGN="JUSTIFY">Other</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">892&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">942&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>Total other noncurrent assets</B></FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">8,931&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">9,097&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=16>
<B><FONT SIZE=2><P>TOTAL ASSETS</B></FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">34,064&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">34,302&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="53%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=11 HEIGHT=8><P></P></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=11 HEIGHT=21>
<FONT SIZE=2><P ALIGN="CENTER">See accompanying Notes to the Condensed Consolidated Financial Statements.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P></B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=564>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>PACIFIC GAS AND ELECTRIC COMPANY</B></FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>CONDENSED CONSOLIDATED BALANCE SHEETS</B></FONT></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">Balance At</B></FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="51%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="33%" VALIGN="TOP" COLSPAN=6 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>(in millions, except share amounts)</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">December 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">(Unaudited)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>LIABILITIES AND SHAREHOLDERS' EQUITY</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>Current Liabilities</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Short term borrowings</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">300&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>Long-term debt, classified as current</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">457&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">757&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Rate reduction bonds, classified as current</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">290&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">290&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>Energy recovery bonds, classified as current</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">197&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Accounts payable:</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P>Trade creditors</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">500&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">762&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Disputed claims and customer refunds</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,142&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,142&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P>Related parties</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">20&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">20&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Regulatory balancing accounts</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">574&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">369&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P>Other</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">484&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">337&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Interest payable</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">426&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">461&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>Income taxes payable</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">322&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">102&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Deferred income taxes</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">351&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">377&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>Other</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">741&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">869&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>Total current liabilities</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,504&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,786&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>Noncurrent Liabilities </B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>Long-term debt</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,442&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">7,043&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Rate reduction bonds</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">506&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">580&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>Energy recovery bonds</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,691&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Regulatory liabilities</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3,869&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">4,035&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>Asset retirement obligations</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,325&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,301&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Deferred income taxes</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3,587&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3,629&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>Deferred tax credits</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">119&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">121&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=48><P></P></TD>
<TD WIDTH="63%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=48>
<FONT SIZE=2><P>Preferred stock with mandatory redemption provisions<BR>
&nbsp;&nbsp;&nbsp;(redeemable, 6.30% and 6.57%, outstanding 4,800,000 shares,<BR>
&nbsp;&nbsp;&nbsp;due 2005-2009)</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=48>
<FONT SIZE=2><P ALIGN="RIGHT">120&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=48><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=48>
<FONT SIZE=2><P ALIGN="RIGHT">122&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>Other</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,625&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,555&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>Total noncurrent liabilities </B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">19,284&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">18,386&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P>Commitments and Contingencies (Notes 1, 2 and 7)</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P><A NAME="_Shareholders'_Equity"></A>Shareholders' Equity</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>Preferred stock without mandatory redemption provisions:</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=15><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=15>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Nonredeemable, 5% to 6%, outstanding 5,784,825 shares</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">145&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=15><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">145&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Redeemable, 4.36% to 7.04%, outstanding 5,973,456 shares</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">149&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">149&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Common stock, $5 par value, authorized 800,000,000 shares,<BR>
</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;issued 299,291,477 shares</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,496&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,606&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>Common stock held by subsidiary, at cost, 19,481,213 shares</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(475)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(475)</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Additional paid-in capital</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,900&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,041&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P>Reinvested earnings</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">5,066&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">5,667&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Accumulated other comprehensive loss</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(5)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(3)</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<B><FONT SIZE=2><P>Total shareholders' equity</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">8,276&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">9,130&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY</B></FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">34,064&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">34,302&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11 HEIGHT=9><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=11 HEIGHT=14>
<FONT SIZE=2><P ALIGN="CENTER">See accompanying Notes to the Condensed Consolidated Financial Statements.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P></B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=596>
<TR><TD WIDTH="72%" VALIGN="TOP" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P>PACIFIC GAS AND ELECTRIC COMPANY</B></FONT></TD>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=6 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="TOP" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</B></FONT></TD>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=6 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="CENTER">(Unaudited)</B></FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="TOP" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=6 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="TOP" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31, </B></FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 ROWSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=6 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P><A NAME="_Cash_Flows_From"></A>Cash Flows From Operating Activities</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Net income </FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">223&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">3,074&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash provided by</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;operating activities:</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation, amortization and decommissioning</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">385&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">311&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recognition of regulatory assets</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(4,900)</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes and tax credits, net</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(70)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,014&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other deferred charges and noncurrent liabilities</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(49)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">279&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of assets</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(16)</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Net effect of changes in operating assets and liabilities:</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease (increase) in restricted cash</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">97&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(126)</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">169&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">353&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">90&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">82&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(115)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(256)</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued taxes</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">220&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">98&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regulatory balancing accounts, net </FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">254&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(53)</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other working capital</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(179)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">253&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=30>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Payments authorized by the bankruptcy court on amounts<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;classified as liabilities subject to compromise </FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=30>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=30><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=30>
<FONT SIZE=2><P ALIGN="RIGHT">(20)</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Other, net</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">10&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(84)</FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P>Net cash provided by operating activities</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,035&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,009&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P>Cash Flows From Investing Activities</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Capital expenditures</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(349)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(342)</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Net proceeds from sale of assets</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">11&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">18&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Decrease (increase) in restricted cash</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">26&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(6,917)</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Other, net</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">26&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(65)</FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<B><FONT SIZE=2><P>Net cash used in investing activities</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(286)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(7,306)</FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<B><FONT SIZE=2><P>Cash Flows From Financing Activities</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=30>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Net repayments under credit facilities and short-term<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;borrowings</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=30>
<FONT SIZE=2><P ALIGN="RIGHT">(300)</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=30><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=30>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=33>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Proceeds from issuance of long-term debt, net of issuance costs of<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$153 million in 2004</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=33><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">6,547&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=33>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Proceeds from issuance of energy recovery bonds, net of issuance <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;costs of $14 million in 2005</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">1,874&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=33><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Long-term debt matured, redeemed or repurchased</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(900)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(310)</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Rate reduction bonds matured</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(74)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(74)</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Common stock dividends paid</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(110)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="RIGHT">-</B>&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Preferred dividends paid</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(4)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Preferred stock with mandatory redemption provisions redeemed</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(2)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Common stock repurchased</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(960)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<B><FONT SIZE=2><P>Net cash (used in) provided by financing activities</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(476)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">6,163&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P>Net change in cash and cash equivalents</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">273&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(134)</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<B><FONT SIZE=2><P>Cash and cash equivalents at January 1</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">783&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,979&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P>Cash and cash equivalents at March 31</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,056&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,845&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P>Supplemental disclosures of cash flow information</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Cash received for:</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reorganization interest income</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">6&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">8&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Cash paid for:</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest (net of amounts capitalized)</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">169&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">175&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes paid, net</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reorganization professional fees and expenses</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">5&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16>
<B><FONT SIZE=2><P>Supplemental disclosures of noncash investing and financing activities</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity contribution for settlement of POR payable</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(128)</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=31>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Transfer of liabilities and other payables subject to compromise <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to operating assets and liabilities</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=31>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=31>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=31><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=31>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=31>
<FONT SIZE=2><P ALIGN="RIGHT">(257)</FONT></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=10 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">See accompanying Notes to the Condensed Consolidated Financial Statements.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="CENTER">NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</P>
</B><P ALIGN="JUSTIFY"></P>
<B><P><A NAME="_NOTE_1:_"></A>NOTE 1:  GENERAL</P>
</B><P ALIGN="JUSTIFY"></P>
<B><P ALIGN="JUSTIFY">Organization and Basis of Presentation</P>
<P ALIGN="JUSTIFY"></P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation, incorporated in California in 1995, is an energy-based holding company that conducts its business principally through Pacific Gas and Electric Company, or the Utility, a public utility operating in northern and central California.  The Utility engages primarily in the businesses of electricity and natural gas distribution, electricity generation, electricity transmission, and natural gas procurement, transportation and storage.  PG&amp;E Corporation became the holding company of the Utility and its subsidiaries on January 1, 1997.  The Utility, incorporated in California in 1905, is the predecessor of PG&amp;E Corporation.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Quarterly Report on Form 10-Q is a combined report of PG&amp;E Corporation and the Utility.  Therefore, the Notes to the unaudited Condensed Consolidated Financial Statements apply to both PG&amp;E Corporation and the Utility.  PG&amp;E Corporation's Condensed Consolidated Financial Statements include the accounts of PG&amp;E Corporation, the Utility, and other wholly owned and controlled subsidiaries.  The Utility's Condensed Consolidated Financial Statements include its accounts and those of its wholly owned and controlled subsidiaries, and variable interest entities for which it is subject to a majority of the risk of loss or gain.  All intercompany transactions have been eliminated from the Condensed Consolidated Financial Statements.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying interim unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they may not contain all of the information and footnotes required by GAAP for complete financial statements.  Both PG&amp;E Corporation's and the Utility's Condensed Consolidated Balance Sheets at December 31, 2004, were derived from the audited Consolidated Balance Sheets included in their combined 2004 Annual Report on Form 10-K, or Annual Report, filed with the Securities and Exchange Commission, or SEC.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions.  These estimates and assumptions affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingencies and include, but are not limited to, estimates and assumptions used in determining the Utility's regulatory asset and liability balances based on probability assessments of regulatory recovery, revenues earned but not yet billed (including delayed billings), disputed claims, asset retirement obligations, allowance for doubtful accounts receivable, provisions for losses that are deemed probable from environmental remediation liabilities, pension liabilities, mark-to-market accounting under Statement of Financial Accounting Standards, or SFAS, No. 133 "Accounting for Derivative Instruments and Hedging Activities," as amended, or SFAS No. 133, income tax related liabilities, litigation, and the Utility's review for impairment of long-lived assets and certain identifiable intangibles to be held and used whenever events or changes in circumstances indicate that the carrying amount of its assets might not be recoverable.  As these estimates and assumptions involve judgments on a wide range of factors, including future regulatory decisions and economic conditions that are difficult to predict, actual results could differ from these estimates.  PG&amp;E Corporation's and the Utility's Condensed Consolidated Financial Statements reflect all adjustments that management believes are necessary for the fair presentation of their financial position and results of operations for the periods presented.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the Utility's proceeding under Chapter 11 of the U.S. Bankruptcy Code, or Chapter 11, PG&amp;E Corporation's and the Utility's Consolidated Financial Statements were presented in accordance with the American Institute of Certified Public Accountants' Statement of Position 90-7, "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code," or SOP 90-7.  Under SOP 90-7, professional fees and expenses directly related to the Utility's Chapter 11 proceeding and interest income on funds accumulated during the Chapter 11 proceedings were reported separately as reorganization items.  The Utility discontinued the application of SOP 90-7 upon its emergence from Chapter 11 on April 12, 2004 when the Utility's plan of reorganization under Chapter 11 became effective, or the Effective Date.  As discussed below, in Note 2, the U.S. Bankruptcy Court for the Northern District of California, which oversaw the Utility's Chapter 11 proceeding, retains jurisdiction, among other things, to resolve the remaining disputed claims made in the Utility's Chapter 11 proceeding.  </P>
<B>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This quarterly report should be read in conjunction with PG&amp;E Corporation's and the Utility's Consolidated Financial Statements and Notes to the Consolidated Financial Statements included in their combined 2004 Annual Report. </P>
<P ALIGN="JUSTIFY"></P>
<B><I><P ALIGN="JUSTIFY">Earnings Per Common Share</P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earnings per common share is calculated, utilizing the "two-class" method, by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding during the period.  In applying the "two-class" method, undistributed earnings are allocated to both common shareholders and participating securities.  PG&amp;E Corporation's $280 million of 9.50% Convertible Subordinated Notes due 2010, or Convertible Subordinated Notes, are entitled to receive (non-cumulative) dividend payments without exercising the conversion option and meet the criteria of a participating security.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Convertible Subordinated Notes are convertible at the option of the holders into 18,558,655 common shares.  All PG&amp;E Corporation's participating securities participate on a 1:1 basis in dividends with common shareholders.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a reconciliation of PG&amp;E Corporation's net income and weighted average common shares outstanding for calculating basic and diluted earnings per common share:</P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=654>
<TR><TD WIDTH="15%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="62%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="23%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="23%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="TOP" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="23%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" COLSPAN=6 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<B><FONT SIZE=2><P>(in millions, except share amounts)</B></FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="23%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P>Net income </B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">218&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">3,033&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P>Less: distributed earnings to common shareholders </FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">111&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>Undistributed earnings</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">107&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">3,033&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<B><FONT SIZE=2><P>Common shareholders earnings</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<B><I><FONT SIZE=2><P>Basic</B></I></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P>Distributed earnings to common shareholders</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">111&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>Undistributed earnings allocated to common shareholders</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">102&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">2,893&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<B><FONT SIZE=2><P>Total common shareholders earnings, basic</B></FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">213&nbsp;</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">2,893&nbsp;</B></FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<B><I><FONT SIZE=2><P ALIGN="JUSTIFY">Diluted</B></I></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>Distributed earnings to common shareholders</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">111&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P>Undistributed earnings allocated to common shareholders</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">102&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">2,897&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="JUSTIFY">Total common shareholders earnings, diluted</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">$</B></FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">213&nbsp;</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">$</B></FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">2,897&nbsp;</B></FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<B><FONT SIZE=2><P>Weighted average common shares outstanding, basic</B></FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">388&nbsp;</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">393&nbsp;</B></FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>9.50% Convertible Subordinated Notes</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">19&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">19&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P>Weighted average common shares outstanding and participating securities, basic</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">407&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">412&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>Weighted average common shares outstanding, basic</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">388&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">393&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P>Employee stock options, restricted stock and PG&amp;E Corporation shares held by grantor trusts </FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">4&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">7&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>PG&amp;E Corporation warrants</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">4&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P>Rounding</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">1&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P>Weighted average common shares outstanding, diluted</B></FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">392&nbsp;</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">405&nbsp;</B></FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P>9.50% Convertible Subordinated Notes</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">19&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">19&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>Weighted average common shares outstanding and participating securities, diluted</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">411&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">424&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<B><FONT SIZE=2><P>Net earnings per common share, basic</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P>Distributed earnings, basic</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">0.29&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>Undistributed earnings, basic</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">0.26&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">7.36&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<B><FONT SIZE=2><P>Total</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">$</B></FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">0.55&nbsp;</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">$</B></FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">7.36&nbsp;</B></FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<B><FONT SIZE=2><P>Net earnings per common share, diluted</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>Distributed earnings, diluted</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">0.28&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P>Undistributed earnings, diluted</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">0.26&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">7.15&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P>Total</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">$</B></FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">0.54&nbsp;</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">$</B></FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">7.15&nbsp;</B></FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options to purchase 6,500 and 8,542,006 PG&amp;E Corporation common shares were outstanding during the three months ended March 31, 2005 and 2004, respectively, but not included in the computation of diluted earnings per common share because the option exercise prices were greater than the average market price.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation reflects the preferred dividends of subsidiaries as other expense for computation of both basic and diluted earnings per common share</FONT>.</P>
<B><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<I><P>Consolidation of Variable Interest Entities  </P>
</B></I><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An entity is a variable interest entity, or VIE, if it does not have sufficient equity investment at risk, or if the holders of the entity's equity instruments lack the essential characteristics of a controlling financial interest.  </FONT><FONT FACE="Dutch801BT-Roman" SIZE=2>The Financial Accounting Standards Board, or FASB, Interpretation No. 46, ''Consolidation of Variable Interest Entities,'' or FIN 46R, </FONT><FONT SIZE=2>requires that the company that is subject to a majority of the risk of loss from a VIE's activities, or is entitled to receive a majority of the entity's residual returns, or both, consolidate the VIE.  A company that consolidates a VIE is called the primary beneficiary.</P>
</FONT>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation and Utility adopted FIN 46R on January 1, 2004.  The adoption of FIN 46R did not have an impact on net income. </P>
<I>
<P ALIGN="JUSTIFY">Low-Income Housing Partnerships </P>
</I><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility invests in low-income housing partnerships, or LIHPs.  The entities were formed to invest in low-income housing projects sponsored by non-profit organizations in the state of California.  The Utility determined that it was the primary beneficiary of one LIHP, resulting in its consolidation, and an increase in total assets and total liabilities of $10 million in PG&amp;E Corporation's and the Utility's Consolidated Balance Sheets.  The consolidated LIHP has issued debt in the amount of $4 million, which is secured by assets of the partnership, totaling $24 million, and the Utility's commitment to make capital infusions of approximately $10 million over the next five years.</P>
<B>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility is not considered to be the primary beneficiary of any other LIHPs.  The maximum exposure to loss from its investment in unconsolidated LIHPs is the Utility's investment of $5 million at March 31, 2005.</P>
<I>
<P>Power Purchase Agreements</P>
</I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The nature of power purchase agreements is such that the Utility could have a significant variable interest in a power purchase agreement counterparty if that entity is a VIE owning one plant that sells substantially all of its output to the Utility, and the contract price for power is correlated with the plant's variable costs of production.  The Utility determined that none of its current power purchase agreements represent significant variable interests.  The FASB added a project to its agenda in March 2005 to review how companies determine whether an arrangement is a variable interest.  Their findings could impact how the determination is applied to the Utility's power purchase agreements in the future.</P>

<B><P ALIGN="JUSTIFY">Adoption of New Accounting Policies and Summary of Significant Accounting Policies</P>
</B><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accounting policies used by PG&amp;E Corporation and the Utility include those necessary for rate-regulated enterprises, which reflect the ratemaking policies of the California Public Utilities Commission, or CPUC, and the Federal Energy Regulatory Commission, or FERC.</P>

<B><I><P>Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 </P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In May 2004, FASB issued Staff Position SFAS No. 106-2, "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003," or FSP 106-2.  FSP 106-2 supersedes FSP 106-1, "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003," and provides guidance on the accounting, disclosure, effective date, and transition requirements related to the Medicare Prescription Drug Act.  FSP 106-2 was effective for the third quarter of 2004.  The adoption of FSP 106-2 did not have any impact on the Consolidated Financial Statements of PG&amp;E Corporation or the Utility.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The U.S. Department of Health and Human Services issued the final regulations on prescription drug benefits on January 21, 2005.  Despite the initial preliminary conclusion that the</FONT><FONT SIZE=2 COLOR="#0000ff"> </FONT><FONT SIZE=2>Utility's postretirement medical plan, or the Plan</FONT><FONT SIZE=2 COLOR="#0000ff">,</FONT><FONT SIZE=2> did not qualify for the federal subsidy, the final regulations may allow the Plan to qualify for the federal subsidy.  PG&amp;E Corporation and the Utility are continuing to evaluate the effects, if any, of the final regulations on the Plan, and the impact on the Consolidated Financial Statements.</P>
<B><I><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Related Party Agreements and Transactions</P>
</B></I><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with various agreements, the Utility and other subsidiaries provide and receive various services to and from their parent, PG&amp;E Corporation, and among themselves.  The Utility and PG&amp;E Corporation exchange administrative and professional services in support of operations.  These services are priced either at the fully loaded cost (<I>i.e.</I>, direct costs and allocations of overhead costs) or at the higher of fully loaded cost or fair market value, depending on the nature of the services.  PG&amp;E Corporation also allocates certain other corporate administrative and general costs to the Utility and other subsidiaries using agreed allocation factors, including the number of employees, operating expenses excluding fuel purchases, total assets and other cost allocation methodologies.  The Utility purchases natural gas transportation services from Gas Transmission Northwest Corporation, or GTNW, formerly known as PG&amp;E Gas Transmission, Northwest Corporation.  GTNW is no longer a related party after the cancellation of PG&amp;E Corporation's equity interest in National Energy &amp; Gas Transmission, Inc., or NEGT, on the effective date of its plan of reorganization, October 29, 2004.  Through July 7, 2003, all significant intercompany transactions with NEGT and its subsidiaries were eliminated in consolidation; therefore, no profit or loss resulted from these transactions.  Beginning July 8, 2003, the Utility's transactions with NEGT are no longer eliminated in consolidation.  The Utility's significant related party transactions and related receivable (payable) balances were as follows:</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=596>
<TR><TD WIDTH="47%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="23%" VALIGN="BOTTOM" COLSPAN=6 ROWSPAN=2 HEIGHT=19>
<B><FONT SIZE=2><P ALIGN="CENTER"><BR>
Three Months Ended</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="28%" VALIGN="BOTTOM" COLSPAN=5 ROWSPAN=2 HEIGHT=19>
<B><FONT SIZE=2><P ALIGN="CENTER">Receivable (Payable)<BR>
 Balance Outstanding at</B></FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=16>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">December 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=19>
<B><FONT SIZE=2><P>Utility revenues from:</B></FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=19><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=19><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=19><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=19><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=19><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=19><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=19><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=19><P></P></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19>
<FONT SIZE=2><P>Administrative services provided to<BR>
&nbsp;&nbsp;&nbsp;PG&amp;E Corporation</FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">1&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">2&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">1&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">1&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=20>
<B><FONT SIZE=2><P>Utility expenses from:</B></FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=20><P></P></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=37>
<FONT SIZE=2><P>Administrative services received from<BR>
&nbsp;&nbsp;&nbsp;PG&amp;E Corporation</FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=37><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=37>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=37>
<FONT SIZE=2><P ALIGN="RIGHT">25&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=37><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=37>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=37>
<FONT SIZE=2><P ALIGN="RIGHT">22&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=37><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=37>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=37>
<FONT SIZE=2><P ALIGN="RIGHT">(20)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=37><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=37>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=37>
<FONT SIZE=2><P ALIGN="RIGHT">(20)</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" HEIGHT=19>
<FONT SIZE=2><P>Interest accrued on pre-petition liabilities due<BR>
&nbsp;&nbsp;&nbsp;to PG&amp;E Corporation</FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=19><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=19><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">2&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=19><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=19><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19>
<FONT SIZE=2><P>Natural gas transportation services received<BR>
&nbsp;&nbsp;&nbsp;from GTNW</FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">15&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=19><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><I><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
</B></I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As discussed below, as of March 31, 2004, PG&amp;E Corporation recorded the impact of the settlement agreement, entered into on December 19, 2003, among PG&amp;E Corporation, the Utility and the CPUC to resolve the Utility's Chapter 11 case, or the Settlement Agreement.  The Settlement Agreement precluded the Utility from reimbursing PG&amp;E Corporation for certain Chapter 11 related costs.  As such, PG&amp;E Corporation reduced its receivable from the Utility, and the Utility reduced its payable to PG&amp;E Corporation by $128 million.  The transactions were recorded as a contribution of equity to the Utility by PG&amp;E Corporation, net of taxes of $52 million, and an increase to additional-paid-in-capital by the Utility in the first quarter of 2004.</P>
<B><I><P ALIGN="JUSTIFY"></P>
<P>Regulation and Statement of Financial Accounting Standards No.&nbsp;71</P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation and the Utility account for the financial effects of regulation in accordance with SFAS No. 71,"Accounting for the Effects of Certain Types of Regulation," as amended, or SFAS No.&nbsp;71.  SFAS No.&nbsp;71 applies to regulated entities whose rates are designed to recover the costs of providing service.  The Utility is regulated by the CPUC, the FERC and the Nuclear Regulatory Commission, or NRC, among others.  SFAS No.&nbsp;71 applies to all of the Utility's operations except for the operations of a natural gas pipeline.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SFAS No.&nbsp;71 provides for recording regulatory assets and liabilities when certain conditions are met.  Regulatory assets represent the capitalization of incurred costs that would otherwise be charged to expense when it is probable that the incurred costs will be included for ratemaking purposes in the future.  Amortization of regulatory assets is charged to expense during the period that the costs are reflected in regulated revenues.  Regulatory liabilities represent rate actions of a regulator that will result in amounts that are to be credited to customers through the ratemaking process.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent that portions of the Utility's operations cease to be subject to SFAS No.&nbsp;71 or recovery is no longer probable as a result of changes in regulation or the Utility's competitive position, the related regulatory assets and liabilities are written off.</P>
<B><I><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Regulatory Assets</P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regulatory assets comprise the following: </P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=547>
<TR><TD WIDTH="67%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="33%" VALIGN="BOTTOM" COLSPAN=5>
<B><FONT SIZE=2><P ALIGN="CENTER">Balance At</B></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">December 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Settlement Regulatory Asset</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,282&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3,188&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P>Energy recovery bond regulatory asset</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,868&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Utility retained generation regulatory assets</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,161&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,181<B>&nbsp;</B></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P>Rate reduction bond assets</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">676&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">741&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Regulatory assets for deferred income tax</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">500&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">490&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P>Unamortized loss, net of gain, on reacquired debt</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">340&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">345&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Environmental compliance costs</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">227&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">192&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P>Post-transition period contract termination costs</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">139&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">142&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Regulatory assets associated with plan of reorganization</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">170&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">182&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P>Other, net</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">49&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">65&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Total regulatory assets</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,412&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,526&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In light of the satisfaction of various conditions to the implementation of the Utility's plan of reorganization, the accounting probability standard required to be met under SFAS No. 71 in order for the Utility to recognize the regulatory assets provided under the Settlement Agreement (as described in Note 2) was met as of March 31, 2004.  Therefore, the Utility recorded the $3.7 billion, pre-tax ($2.2 billion, after-tax), regulatory asset established under the Settlement Agreement, or the Settlement Regulatory Asset, and $1.2 billion, pre-tax ($0.7 billion, after-tax), for the Utility retained generation regulatory assets in the first quarter of 2004 (see Note 2 for further discussion).  As of December 31, 2004, the Utility had recorded pre-tax offsets to the Settlement Regulatory Asset of approximately $309 million ($183 million, after-tax) for supplier settlements and approximately $233 million ($138 million, after-tax) for amortization of the Settlement Regulatory Asset.  For the three months ended March 31, 2005, the Utility recorded amortization of the Settlement Regulatory Asset of approximately $33 million ($20 million, after-tax) and did not record any offsets for supplier settlements. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February 10, 2005, PG&amp;E Energy Recovery Funding, LLC, or PERF, a limited liability company wholly-owned and consolidated by the Utility (but legally separate from the Utility), issued the first series of energy recovery bonds, or ERBs, for approximately $1.9 billion to refinance the remaining after-tax balance of the Settlement Regulatory Asset.  As a result of the issuance of ERBs, the pre-tax Settlement Regulatory Asset has been reduced to approximately $1.3 billion (representing the deferred tax liability associated with the collection of the revenues for the ERBs) and the Utility has recorded a regulatory asset related to the ERBs of approximately $1.9 billion.  </P>
<P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's rate reduction bond asset represents electric industry restructuring costs that the Utility expects to collect over the life of the bonds.  The regulatory assets for deferred income tax represent deferred income tax benefits that have already been passed through to customers and are offset by deferred income tax liabilities.  The regulatory asset related to unamortized loss, net of gain, on reacquired debt represents costs on debt reacquired or redeemed prior to maturity with associated discount and debt issuance costs.  Environmental compliance costs are costs incurred by the Utility for environmental remediation.  The post-transition period contract termination costs represent amounts the Utility incurred in terminating a 30-year power purchase agreement.  Regulatory assets associated with the plan of reorganization include costs incurred in financing the Utility's exit from Chapter 11 and costs to oversee the environmental enhancement of the Pacific Forest and Watershed Stewardship Council, an entity that was established pursuant to the Utility's plan of reorganization.  These regulatory assets are recoverable from customers in future rates.</P>
<P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In general, the Utility does not earn a return on regulatory assets where the related costs do not accrue interest.  Accordingly, the only regulatory asset on which the Utility earns a return are the regulatory assets relating to the Utility's retained generation and unamortized loss, net of gain on reacquired debt.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Settlement Agreement authorizes the Utility to earn an 11.22% rate of return on equity on its rate base, including the after-tax amount of the Settlement Regulatory Asset and the retained generation regulatory assets.  Now that the remaining unamortized after-tax balance of the Settlement Regulatory Asset has been refinanced through the issuance of the first series of ERBs, the Utility no longer earns this 11.22% rate of return on the Settlement Regulatory Asset as it is no longer a part of rate base.</P>
<B><I><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Regulatory Liabilities</P>
</B></I><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regulatory liabilities comprise the following:</P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=539>
<TR><TD WIDTH="68%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="32%" VALIGN="BOTTOM" COLSPAN=5>
<B><FONT SIZE=2><P ALIGN="CENTER">Balance At</B></FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="32%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">December 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Cost of removal obligation</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,000&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,990&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P>Asset retirement costs</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">678&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">700&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Employee benefit plans</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">640&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">687&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P>Public purpose programs</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">198&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">191&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Rate reduction bonds</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">178&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">182&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P>Other</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">175&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">285&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Total regulatory liabilities</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3,869&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">4,035&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="68%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's regulatory liabilities related to costs of removal represent revenues collected for asset removal costs that the Utility expects to incur in the future.  The regulatory liability associated with asset retirement costs represents timing differences between the recognition of nuclear and fossil decommissioning obligations in accordance with GAAP applicable to non-regulated entities under SFAS No. 143, "Accounting for Asset Retirement Obligations," or SFAS No. 143, and the amounts recognized for ratemaking purposes.  The Utility's regulatory liabilities related to employee benefit plan expenses represent the cumulative differences between expenses recognized for financial accounting purposes and expenses recognized for ratemaking purposes.  These balances will be charged against expense to the extent that future financial accounting expenses exceed amounts recoverable for regulatory purposes.  The Utility's regulatory liability related to public purpose programs represents revenues designated for public purpose program costs that are expected to be incurred in the future.  The Utility's regulatory liability for rate reduction bonds represents the deferral of over-collected revenue associated with the rate reduction bonds that the Utility expects to return to customers in the future.  </P>
<B><I>
<P ALIGN="JUSTIFY">Regulatory Balancing Accounts </P>
<P ALIGN="JUSTIFY"></P>
</B></I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales balancing accounts accumulate differences between revenues and the Utility's authorized revenue requirements.  Cost balancing accounts accumulate differences between incurred costs and revenues.  Under-collections that are probable of recovery through regulated rates are recorded as regulatory balancing account assets.  Over-collections that are probable of being credited to customers are recorded as regulatory balancing account liabilities.  The Utility's regulatory balancing accounts accumulate balances until they are refunded to or received from the Utility's customers through authorized rate adjustments.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility expects to collect from or refund to its customers the balances included in current balancing accounts receivable and payable within the next twelve months.  Regulatory balancing accounts that the Utility does not expect to collect or refund in the next twelve months are included in non-current regulatory assets and liabilities. </P>

<B><I><P ALIGN="JUSTIFY">Stock-Based Compensation</P>
</B></I><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation and the Utility apply the intrinsic-value method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," in accounting for employee stock-based compensation, as allowed by SFAS No. 123, "Accounting for Stock-Based Compensation," or SFAS No. 123, as amended by SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure, an Amendment of FASB Statement No. 123," or SFAS No. 148.  Under the intrinsic-value method, PG&amp;E Corporation and the Utility do not recognize any compensation expense for stock options, as the exercise price is equal to the fair market value of a share of PG&amp;E Corporation common stock at the time the options are granted.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The tables below show the effect on net income and earnings per common share for PG&amp;E Corporation and the Utility had it elected to account for its stock-based compensation plans using the fair-value method under SFAS No. 123 for the three months ended March 31, 2005 and 2004:</P>
<P> </P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=527>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=4>
<B><FONT SIZE=2><P>(in millions, except per share amounts)</B></FONT></TD>
<TD WIDTH="34%" VALIGN="BOTTOM" COLSPAN=5>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=4>&nbsp;</TD>
<TD WIDTH="34%" VALIGN="BOTTOM" COLSPAN=5>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="34%" VALIGN="BOTTOM" COLSPAN=6 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<B><FONT SIZE=2><P>Net earnings:</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>As reported</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">218&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">3,033&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P>Deduct: Total stock-based employee compensation</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>expense determined under the fair value based method</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>for all awards, net of related tax effects</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(3)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(4)</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Pro forma</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">215&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">3,029&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<B><FONT SIZE=2><P>Basic earnings per common share:</B></FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>As reported</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">0.55&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">7.36&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Pro forma</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">0.55&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">7.35&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<B><FONT SIZE=2><P>Diluted earnings per common share:</B></FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>As reported</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">0.54&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">7.15&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Pro forma</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">0.53&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">7.14&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If compensation expense had been recognized using the fair value-based method under SFAS No.&nbsp;123, the Utility's pro forma consolidated earnings would have been as follows:</P>
</FONT><P> </P>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=528>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="34%" VALIGN="BOTTOM" COLSPAN=5>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3>&nbsp;</TD>
<TD WIDTH="34%" VALIGN="BOTTOM" COLSPAN=5>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="34%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<B><FONT SIZE=2><P>Net earnings:</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>As reported</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">219&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">3,066&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P>Deduct: Total stock-based employee compensation expense </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=29><P></P></TD>
<TD WIDTH="64%" VALIGN="BOTTOM" HEIGHT=29>
<FONT SIZE=2><P>determined under fair value based method for all awards, net of related tax effects</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=29>
<FONT SIZE=2><P ALIGN="RIGHT">(2)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=29><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=29>
<FONT SIZE=2><P ALIGN="RIGHT">(2)</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Pro forma</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">217&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">3,064&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<B><I><FONT SIZE=2>
<P>Restricted Stock </P>

</B></I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At March 31,&nbsp;2005, a total of 2,418,760 shares of restricted PG&amp;E Corporation common stock had been awarded to eligible employees of PG&amp;E Corporation and its subsidiaries, of which 1,598,140 shares were awarded to Utility employees.  PG&amp;E Corporation awarded 329,840 shares of restricted common stock during the three months ended March 31, 2005, of which 242,010 shares were awarded to Utility employees.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The restricted shares are held in an escrow account.  The shares become available to the employees as the restrictions lapse.  Dividends payable with respect to restricted shares are not paid until the restrictions lapse.   </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For restricted stock granted in 2003, the restrictions on 80% of the shares lapse automatically over a period of four years at the rate of 20% per year.  The compensation expense for these shares remains fixed at the value of the stock at grant date.  Restrictions on the remaining 20% of the shares will lapse at a rate of 5% per year if PG&amp;E Corporation is in the top quartile of its comparator group as measured by annual total shareholder return for each year ending immediately before each annual lapse date.  The compensation expense recognized for these shares is variable, and changes with the common stock's market price.  As the performance criteria for 2004 were not met, 91,017 shares of restricted stock were forfeited.   </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted stock awards after 2003 do not contain performance criteria.  The restrictions lapse ratably over four years, from the date of award, subject to forfeiture if employment is terminated before the annual vesting date.  All restricted shares are also subject to accelerated vesting in certain circumstances, including death, disability, and change in control.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation expense associated with all the shares is recognized on a quarterly basis, by amortizing the unearned compensation related to that period.  Total compensation expense resulting from the issuance of restricted shares, as reflected on PG&amp;E Corporation's Condensed Consolidated Statements of Income, was approximately $3 million for the three months ended March 31, 2005 and approximately $3 million for the three months ended March 31, 2004, of which approximately $2 million for the three months ended March 31, 2005 and approximately $2 million for the three months ended March 31, 2004 was recognized by the Utility.  The total unamortized balance of unearned compensation resulting from the issuance of restricted shares, as reflected on PG&amp;E Corporation's Condensed Consolidated Balance Sheets was approximately $31 million at March 31, 2005 and approximately $26 million at December 31, 2004. </P>
<B><I>
<P>Comprehensive Income (Loss)</P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation's and the Utility's comprehensive income (loss) consists principally of changes in the market value of certain cash flow hedges under SFAS No. 133, and the effects of the remeasurement of the Utility's defined benefit pension plan.</P>
</FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=648>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">PG&amp;E Corporation</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">Utility</B></FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=16>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=14>
<B><FONT SIZE=2><P>Three months ended March 31</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Net income available for common stock</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">218&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3,033&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">219&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3,066&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="BOTTOM" HEIGHT=65>
<FONT SIZE=2><P>Net gain in other comprehensive income from current period <BR>
&nbsp;&nbsp;&nbsp;hedging transactions and price changes in accordance<BR>
&nbsp;&nbsp;&nbsp;with SFAS No. 133 (net of income tax expense of $2 million <BR>
&nbsp;&nbsp;&nbsp;in 2004) </FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=65>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=65><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=65>
<FONT SIZE=2><P ALIGN="RIGHT">3&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=65><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=65>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=65><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=65>
<FONT SIZE=2><P ALIGN="RIGHT">3&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=32>
<FONT SIZE=2><P>Minimum pension liability adjustment (net of income tax<BR>
&nbsp;&nbsp;&nbsp;benefit of $2 million in 2005)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=32><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=32>
<FONT SIZE=2><P ALIGN="RIGHT">(1)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=32><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=32><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=32>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=32><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=32><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=32>
<FONT SIZE=2><P ALIGN="RIGHT">(2)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=32><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=32><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=32>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Other</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<B><FONT SIZE=2><P>Comprehensive income</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">217&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">3,037&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">217&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">3,069&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>

<FONT SIZE=2>
<B><I><P>Accumulated Other Comprehensive Income (Loss)</P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) reports a measure for accumulated changes in equity of an enterprise that results from transactions and other economic events, other than transactions with shareholders.  The following table sets forth the changes in each component of accumulated other comprehensive income (loss):</P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=685>
<TR><TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=55>
<B><FONT SIZE=1><P>(in millions)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=55><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=55>
<B><FONT SIZE=1><P ALIGN="CENTER"> Hedging Transactions in Accordance with SFAS No. 133</B></FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=55><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=55>
<B><FONT SIZE=1><P ALIGN="CENTER">Foreign Currency Translation Adjustment</B></FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=55><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=55>
<B><FONT SIZE=1><P ALIGN="CENTER">Minimum Pension Liability Adjustment</B></FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=55><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=55>
<B><FONT SIZE=1><P ALIGN="CENTER">Other</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=55><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=55>
<B><FONT SIZE=1><P ALIGN="CENTER">Accumulated Other Comprehensive Income (Loss)</B></FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=7><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=7><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 HEIGHT=7><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=7><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=3 HEIGHT=7><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=7><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=7><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=7><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=3 HEIGHT=7><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=7><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=7><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=1><P>Balance at December 31, 2003</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(81)</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(4)</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(85)</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=1><P>Period change in:</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=31><P></P></TD>
<TD WIDTH="34%" VALIGN="BOTTOM" HEIGHT=31>
<FONT SIZE=1><P>Mark-to-market adjustments for hedging <BR>
transactions in accordance with SFAS No. 133</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=31><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=31>
<FONT SIZE=2><P ALIGN="RIGHT">3&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=31><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=31>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=31><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=31>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=31><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=31>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=31><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=31>
<FONT SIZE=2><P ALIGN="RIGHT">3&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="34%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=1><P>Other</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=1><P>Balance at March 31, 2004</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(78)</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(4)</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(81)</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=1><P>Balance at December 31, 2004</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(1)</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(4)</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(4)</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT SIZE=1><P>Period change in:</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=1><P>Minimum pension liability adjustment </FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(1)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(1)</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=1><P>Other</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(1)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=1><P>Balance at March 31, 2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(5)</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(5)</FONT></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) included losses related to discontinued operations of approximately $77 million at December 31, 2003.  During the fourth quarter of 2004, the remaining losses of approximately $77 million included in accumulated other comprehensive income (loss) were recognized in connection with PG&amp;E Corporation's elimination of its equity interest in NEGT.  Excluding the activity related to NEGT, there was no material difference between PG&amp;E Corporation's and the Utility's accumulated other comprehensive income (loss).</P>
<B>
<P>Pension and Other Postretirement Benefits</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation and its subsidiaries provide non-contributory defined benefit pension plans for certain of their employees and retirees (referred to collectively as pension benefits), contributory postretirement medical plans for certain of their employees and retirees and their eligible dependents, and non-contributory postretirement life insurance plans for certain of their employees and retirees (referred to collectively as other benefits).  PG&amp;E Corporation and its subsidiaries use a December 31 measurement date for all of its plans and use publicly quoted market values and independent pricing services depending on the nature of the assets, as reported by the trustee, to determine the fair value of the plan assets.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net periodic benefit cost as reflected in PG&amp;E Corporation's Condensed Consolidated Statements of Income for the three-month period ended March 31, 2005 and March 31, 2004 are as follows:</P>

<B><P>PG&amp;E Corporation</P>
</B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=570>
<TR><TD WIDTH="45%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="26%" VALIGN="BOTTOM" COLSPAN=6>
<B><FONT SIZE=2><P ALIGN="CENTER">Pension Benefits<BR>
Three Months Ended<BR>
March 31,</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="25%" VALIGN="BOTTOM" COLSPAN=8>
<B><FONT SIZE=2><P ALIGN="CENTER">Other Benefits <BR>
Three Months Ended<BR>
March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="26%" VALIGN="BOTTOM" COLSPAN=6 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="25%" VALIGN="BOTTOM" COLSPAN=8 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="BOTTOM"><DIR>

<B><FONT SIZE=2><P>(in millions)</DIR>
</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P>Service cost for benefits earned</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">56&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">47&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">9&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">9&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Interest cost</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3>
<FONT SIZE=2><P ALIGN="RIGHT">125&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2>
<FONT SIZE=2><P ALIGN="RIGHT">118&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2>
<FONT SIZE=2><P ALIGN="RIGHT">20&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=5>
<FONT SIZE=2><P ALIGN="RIGHT">23&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P>Expected return on plan assets</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">(151)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">(141)</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">(21)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">(19)</FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Amortization of transition obligation</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2>
<FONT SIZE=2><P ALIGN="RIGHT">1&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2>
<FONT SIZE=2><P ALIGN="RIGHT">6&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=5>
<FONT SIZE=2><P ALIGN="RIGHT">6&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P>Amortization of prior service cost</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">14&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">13&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">3&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">3&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Amortization of unrecognized loss</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3>
<FONT SIZE=2><P ALIGN="RIGHT">6&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=5>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Net periodic benefit cost </B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">50&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">38&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">17&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="RIGHT">22&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#ffffff" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P><A NAME="_Utility"></A>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There was no material difference between the Utility and PG&amp;E Corporation's net periodic benefit cost.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under SFAS No. 71, regulatory adjustments are recorded in the Consolidated Statements of Income and Consolidated Balance Sheets of the Utility to reflect the difference between Utility pension expense or income for accounting purposes and Utility pension expense or income for ratemaking, which is based on a funding approach.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation and the Utility expect to contribute approximately $20 million for Pension Benefits to fund voluntary retirement program obligations and approximately $68 million for Other Benefits in 2005.  These anticipated contributions are consistent with PG&amp;E Corporation's and the Utility's funding policy, which is to contribute amounts that are tax deductible, consistent with applicable regulatory decisions and sufficient to meet minimum funding requirements.  None of these benefit plans are subject to a minimum funding requirement in 2005.  The Utility's pension benefit plans met all the funding requirements under the Employee Retirement Income Security Act of 1974, as amended.</P>
<B>
<P>Accounting Pronouncements Issued But Not Yet Adopted</P>

<I><P>Share-Based Payment Transactions</P>
</B></I></FONT><FONT FACE="Times" SIZE=2>
</FONT><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December 2004, the FASB issued Statement No. 123 (revised December 2004), "Share-Based Payment," or SFAS No. 123R.  SFAS No. 123R requires that the cost resulting from all share-based payment transactions be recognized in the financial statements and establishes a fair-value measurement objective in determining the value of such a cost.  On April 14, 2005, the SEC amended the compliance date and allowed public companies with calendar year-ends to adopt SFAS No. 123R in the first quarter of 2006.  PG&amp;E Corporation and the Utility are currently evaluating the impact of SFAS No. 123R on their Consolidated Financial Statements.</P>

<B><I><P>Inventory Costs</P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December 2004, the FASB issued Statement No. 151, "Inventory Costs an amendment of ARB No. 43, Chapter 4", or SFAS No. 151.  The guidance clarifies that the allocation of fixed production overhead to inventory is based on normal capacity.  Abnormal amounts of idle facility, excess freight, handling costs and spoilage should be recognized as a current period charge.  SFAS No. 151 will be effective January 1, 2006.  The adoption of SFAS No. 151 is not expected to have a material effect on the financial position or results of operations of either PG&amp;E Corporation or the Utility.</P>

<B><I><P> Conditional Asset Retirement Obligations</P>
</B>
</I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In March 2005, the FASB issued Interpretation No. 47, "Accounting for Conditional Asset Retirement Obligations - an interpretation of FASB Statement No. 143," or FIN 47.  FIN 47 clarifies that a conditional asset retirement obligation refers to a legal obligation to perform an asset retirement activity.  Accordingly, an entity is required to recognize a liability for the fair value of a conditional asset retirement obligation if the fair value of the obligation can be reasonably estimated.  FIN 47 will be effective for the fourth quarter of 2005.  PG&amp;E Corporation and the Utility are currently evaluating the impact of FIN 47 on their Consolidated Financial Statements.</P>

<B><P><A NAME="_NOTE_2:_"></A>NOTE 2:  THE UTILITY'S EMERGENCE FROM CHAPTER 11<A NAME="_Toc21178888"><A NAME="_Toc21179006"></P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the California energy crisis, the Utility filed a voluntary petition for relief under the provisions of Chapter 11 on April 6, 2001.  The Utility retained control of its assets and was authorized to operate its business as a debtor-in-possession during its Chapter 11 proceeding.  PG&amp;E Corporation and the subsidiaries of the Utility, including PG&amp;E Funding LLC, (which issued rate reduction bonds) and PG&amp;E Holdings LLC (which holds stock of the Utility), were not included in the Utility's Chapter 11 proceeding.</P>
<B>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April 12, 2004, the Utility emerged from Chapter 11 when its plan of reorganization became effective, or the Effective Date.  The plan of reorganization incorporated the terms of the Settlement Agreement approved by the CPUC on December 18, 2003, and entered into among the CPUC, the Utility and PG&amp;E Corporation on December 19, 2003, to resolve the Utility's Chapter 11 proceeding.  Although the Utility's operations are no longer subject to the oversight of the bankruptcy court, the bankruptcy court retains jurisdiction to hear and determine disputes arising in connection with the interpretation, implementation or enforcement of (1) the Settlement Agreement, (2) the plan of reorganization, and (3) the bankruptcy court's December 22, 2003 order confirming the plan of reorganization.  In addition, the bankruptcy court retains jurisdiction to resolve remaining disputed claims.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In light of the satisfaction of various conditions to the implementation of the plan of reorganization, the accounting probability standard required to be met under SFAS No. 71, in order for the Utility to recognize the regulatory assets provided under the Settlement Agreement was met as of March 31, 2004.  Therefore, the Utility recorded the $2.2 billion, after-tax ($3.7 billion, pre-tax) Settlement Regulatory Asset, and $0.7 billion, after-tax ($1.2 billion, pre-tax), for the Utility retained generation regulatory assets.  Refer to the 2004 Annual Report for further discussion of the Settlement Agreement.  On February 10, 2005, the Utility refinanced the remaining unamortized after-tax portion of the Settlement Regulatory Asset as discussed in Note 4.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of March 31, 2005, the Utility had accrued approximately $1.6 billion for remaining net disputed claims, consisting of approximately $2.1 billion of accounts payable-disputed claims primarily payable to the California Independent System Operator, or ISO, and the Power Exchange, or the PX, offset by an accounts receivable amount from the ISO and the PX of approximately $0.5 billion.  The Utility held $1.6 billion in escrow for the payment of the remaining disputed claims as of March 31, 2005.  Upon resolution of these claims and under the terms of the Settlement Agreement, any refunds, claims offsets or other credits that the Utility receives from energy suppliers will be returned to customers.  With the approval of the bankruptcy court, the Utility has withdrawn certain amounts from the escrow in connection with settlements with certain ISO and PX sellers.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Petitions for review of the CPUC's order approving the Settlement Agreement and order denying rehearing of its approval order that had been filed by the City and County of San Francisco, or CCSF, and Aglet Consumer Alliance, or Aglet, are still pending at the California Court of Appeal.  CCSF and Aglet allege that the Settlement Agreement violates California law, among other claims.  CCSF requests that the appellate court hear and review the CPUC's decisions, approving the Settlement Agreement and Aglet requests that the CPUC's decisions be overturned.  Three California state senators have filed a brief in support of the CCSF and Aglet petitions.  The California Court of Appeal has not yet acted on the petitions.</P>
</FONT><FONT FACE="Times" SIZE=2><P><A NAME="note3"></A></A></A></P>
</FONT><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, two former CPUC commissioners who did not vote to approve the Settlement Agreement filed an appeal of the bankruptcy court's confirmation order with the U.S. District Court for the Northern District of California, or the District Court.  On July 15, 2004, the District Court dismissed their appeal.  The former commissioners have appealed the District Court's order with the U.S. Court of Appeals for the Ninth Circuit, or Ninth Circuit.  After briefing is complete, the Ninth Circuit will consider arguments by the Utility and the CPUC to dismiss the appeal.  On April 12, 2005, the District Court entered an order dismissing a second appeal of the confirmation order that had been filed by the City of Palo Alto, but which the City of Palo Alto subsequently had agreed to dismiss voluntarily.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation and the Utility believe the petitions for review of the CPUC orders and the appeal of the confirmation order are without merit and will be rejected.  If the bankruptcy court's confirmation order or the Settlement Agreement is overturned or modified on appeal, PG&amp;E Corporation's and the Utility's financial condition and results of operations, and the Utility's ability to pay dividends or otherwise make distributions to PG&amp;E Corporation, could be materially adversely affected.  </P>
<B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><A NAME="note_3_debt"></A>NOTE 3:  DEBT</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Long-Term Debt</P>
<P ALIGN="JUSTIFY"></P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes PG&amp;E Corporation's and the Utility's long-term debt that matures in one year or more from the date of issuance:</P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=619>
<TR><TD WIDTH="74%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="26%" VALIGN="BOTTOM" COLSPAN=7>
<B><FONT SIZE=2><P ALIGN="CENTER">Balance At</B></FONT></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="26%" VALIGN="BOTTOM" COLSPAN=7 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31, 2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=2><P ALIGN="CENTER">December 31, 2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=14>
<B><FONT SIZE=2><P>PG&amp;E Corporation</B></FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Convertible subordinated notes, 9.50%, due 2010</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">280&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">280&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Other long-term debt</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Less: current portion</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(1)</FONT></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">280&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">280&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=14>
<B><FONT SIZE=2><P>Utility</B></FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;First mortgage bonds:</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.26% to 6.05% bonds, due 2006-2034</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">5,300&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">6,200&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unamortized discount, net of premium</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(17)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(17)</FONT></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total first mortgage bonds</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">5,283&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">6,183&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Pollution control bond loan agreements, variable rates, due 2007</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">614&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">614&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Pollution control bond loan agreement, 5.35%, due 2016</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">200&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">200&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Pollution control bond loan agreements, 3.50%, due 2007</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">345&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">345&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Pollution control bond reimbursement obligations, variable rates, due 2005</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">454&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">454&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Other</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">3&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">4&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Less: current portion</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(457)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(757)</FONT></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">6,442&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">7,043&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<B><FONT SIZE=2><P>Total consolidated long-term debt, net of current portion</B></FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">6,722&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">7,323&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="74%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2>
<P>PG&amp;E Corporation</B> </P>
<B><I>
<P>Convertible Subordinated Notes</P>

</B></I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation currently has outstanding $280 million of 9.50% Convertible Subordinated Notes that are scheduled to mature on June 30, 2010.  These Convertible Subordinated Notes may be converted (at the option of the holder) at any time prior to maturity into 18,558,655 shares of common stock of PG&amp;E Corporation, at a conversion price of approximately $15.09 per share.  The conversion price is subject to adjustment should a significant change occur in the number of PG&amp;E Corporation's outstanding common shares.  To date, the conversion price has not required adjustment.  In addition, holders of the Convertible Subordinated Notes are entitled to receive pass-through dividends at the same payout as common stockholders with the number of shares determined by dividing the principal amount of the Convertible Subordinated Notes by the conversion price.  On April 15, 2005, PG&amp;E Corporation paid approximately $6 million of pass-through dividends to holders of the Convertible Subordinated Notes.  The holders have a one-time right to require PG&amp;E Corporation to repurchase the Convertible Subordinated Notes on June 30, 2007, at a purchase price equal to the principal amount plus accrued and unpaid interest (including liquidated damages and pass-through dividends, if any).</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with SFAS No. 133, the dividend participation rights component is considered to be an embedded derivative instrument and, therefore, must be bifurcated from the Convertible Subordinated Notes and marked-to-market on PG&amp;E Corporation's Consolidated Statements of Income as a non-operating expense (in Other expense, net), and reflected at fair value on PG&amp;E Corporation's Consolidated Balance Sheets at March 31, 2005.  At March 31, 2005, the total estimated fair value of the dividend participation rights component, on a pre-tax basis, was approximately $92 million, of which $20 million is classified as a current liability (in Current liabilities-Other) and $72 million is classified as a noncurrent liability (in Noncurrent liabilities-Other).  The change in mark to market fair value for the quarter ended March 31, 2005, was immaterial, and was approximately $32 million, pre-tax, for the quarter ended March 31, 2004.  </P>
</FONT>
<B><FONT SIZE=2><P ALIGN="JUSTIFY">Utility</P>
<I>
<P>First Mortgage Bonds/Senior Notes  </P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March 23, 2004, the Utility closed a public offering of $6.7 billion of first mortgage bonds, or First Mortgage Bonds.  The First Mortgage Bonds were offered in multiple tranches consisting of 3.60% First Mortgage Bonds due March 1, 2009 in the principal amount of $600 million, 4.20% First Mortgage Bonds due March 1, 2011 in the principal amount of $500 million, 4.80% First Mortgage Bonds due March 1, 2014 in the principal amount of $1 billion, 6.05% First Mortgage Bonds due March 1, 2034 in the principal amount of $3 billion, and Floating Rate First Mortgage Bonds due April 3, 2006 in the principal amount of $1.6 billion.  The Utility received proceeds of $6.7 billion from the offering, net of a discount of $18 million.  The interest rate for the Floating Rate First Mortgage Bonds is based on the three-month London Interbank Offered Rate, or LIBOR, plus 0.70%, which resets quarterly.  At March 31, 2005, the interest rate on the Floating Rate First Mortgage Bonds was 3.26%.  On April 3, 2005, the rate was reset to 3.82%.  The next reset date is July 3, 2005.  First Mortgage Bonds in the aggregate amount of $2.5 billion also were used to secure the Utility's obligations under various other debt agreements.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October 3, 2004, the Utility partially redeemed Floating Rate First Mortgage Bonds due in 2006 in the aggregate principal amount of $500 million.  On January 3, 2005, in anticipation of the receipt of ERB proceeds, the Utility partially redeemed Floating Rate First Mortgage Bonds due in 2006 in the aggregate principal amount of $300 million.  On February 24, 2005, the Utility used a portion of the ERB proceeds to defease $600 million of Floating Rate First Mortgage Bonds due in 2006.  The defeased bonds were redeemed on April 3, 2005. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The First Mortgage Bonds were secured by a first lien, subject to permitted exceptions, on substantially all of the Utility's real property and certain tangible personal property related to the Utility's facilities.  The lien was released on April 22, 2005, upon satisfaction of various conditions specified in the indenture, including confirmation from Moody's Investors Service, or Moody's, and Standard &amp; Poor's Ratings Service, or S&amp;P, that the Utility's unsecured debt ratings following the release would be at least Baa2 from Moody's and BBB from S&amp;P.  On March 3, 2005, Moody's increased the rating on the First Mortgage Bonds from Baa2 to Baa1.  On April 22, 2005, the Utility and the trustee entered into an amended and restated indenture to eliminate the provisions related to the lien of the mortgage.  The First Mortgage Bonds have been redesignated as follows:  </P>
</FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=631>
<TR><TD WIDTH="41%" VALIGN="TOP">
<B><FONT SIZE=2><P>First Mortgage Bonds </B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="34%" VALIGN="TOP">
<B><FONT SIZE=2><P>Redesignated As</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<B><FONT SIZE=2><P>Amount</B></FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP">
<FONT SIZE=2><P>3.6% First Mortgage Bonds due 2009 </FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="34%" VALIGN="TOP">
<FONT SIZE=2><P>3.6% Senior Notes due 2009</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P>$600 million</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP">
<FONT SIZE=2><P>4.2% First Mortgage Bonds due 2011</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="34%" VALIGN="TOP">
<FONT SIZE=2><P>4.2% Senior Notes due 2011</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P>$500 million </FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP">
<FONT SIZE=2><P>4.8% First Mortgage Bonds due 2014</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="34%" VALIGN="TOP">
<FONT SIZE=2><P>4.8% Senior Notes due 2014</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P>$1 billion</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP">
<FONT SIZE=2><P>6.05% First Mortgage Bonds due 2034</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="34%" VALIGN="TOP">
<FONT SIZE=2><P>6.05% Senior Notes due 2034</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P>$3 billion</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP">
<FONT SIZE=2><P>Floating Rate First Mortgage Bonds due 2006 </FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="34%" VALIGN="TOP">
<FONT SIZE=2><P>Floating Rate Senior Notes due 2006       </FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P>$200 million</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since the lien has been released there is no collateral securing the First Mortgage Bonds and the bonds, now designated as the Senior Notes as set forth in the table above, have become the Utility's unsecured general obligations ranking <I>pari passu</I> with the Utility's other unsecured debt.  Under the indenture for the Senior Notes, the Utility has agreed that it will not incur secured debt (except for (1) debt secured by specified liens, and (2) secured debt in an amount not exceeding 10% of the Utility's net tangible assets, as defined in the indenture) unless the Utility provides that the Senior Notes will be equally and ratably secured with the new secured debt.  </P>

<B><I><P ALIGN="JUSTIFY">Pollution Control Bonds</P>
</B></I><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April 22, 2005, the Utility entered into an amendment to four reimbursement agreements totaling $620 million related to letters of credit aggregating $614 million that had been issued to support certain pollution control bonds issued on behalf of the Utility.  In addition to reducing pricing and generally conforming the covenants and events of default to those in the $1 billion working capital facility (described below), the term of the amended agreements has been extended from three years to five years until April 22, 2010.</P>

<B><I><P ALIGN="JUSTIFY">Repayment Schedule</P>
</I>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At March 31, 2005, PG&amp;E Corporation's and the Utility's combined aggregate amounts of scheduled repayments of long-term debt, rate reduction bonds, and ERBs as scheduled are reflected in the table below:</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=694>
<TR><TD WIDTH="24%" VALIGN="TOP">
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">2006</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">2007</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=3>
<B><FONT SIZE=2><P ALIGN="CENTER">2008</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">2009</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">Thereafter</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=3>
<B><FONT SIZE=2><P ALIGN="CENTER">Total</B></FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=3 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=16>
<B><FONT SIZE=2><P>Long-term debt:</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=16>
<B><FONT SIZE=2><P>PG&amp;E Corporation</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Average fixed interest rate</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">9.50%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">9.50%</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Fixed rate obligations</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">280&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">280&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>Utility</B></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Average fixed interest rate</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3.50%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3.60%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">5.78%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">5.43%</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Fixed rate obligations</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">345&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">600&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">4,683&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">5,628&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=28>
<FONT SIZE=2><P>Variable interest rate as of<BR>
&nbsp;&nbsp;&nbsp;March 31, 2005</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=28><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">4.00%</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=28><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=28><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">3.26%</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=28><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=28><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">2.30%</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=28><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=28><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=28><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=28><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=28><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=28><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=28><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=28><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Variable rate obligations</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">454&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">200&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">614&nbsp;&nbsp;&nbsp;     </FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,268&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Other</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;     </FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=28>
<B><FONT SIZE=2><P>Total consolidated long-term<BR>
&nbsp;&nbsp;&nbsp;debt</B></FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">456&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">201&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">959&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">600&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">4,963&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">7,179&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=15>
<B><FONT SIZE=2><P>ERBs &amp; RRBs:</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" COLSPAN=2 HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=15>
<B><FONT SIZE=2><P>Utility</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" COLSPAN=2 HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=15>
<FONT SIZE=2><P>Average fixed interest rate </FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">6.42%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">6.44%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=15><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">6.48%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=15><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=15><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=15><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">6.45%</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P>Rate reduction bonds</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">216&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">290&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">290&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">796&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Average fixed interest rate</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3.32%</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3.55%</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3.87%</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3.87%</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">4.05%</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">4.35%</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">4.02%</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P>Energy recovery bonds</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">140&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">221&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">230&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">239&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">248&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">810&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">1,888&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<B><P ALIGN="JUSTIFY">Credit Facilities and Short-Term Borrowings</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes PG&amp;E Corporation's and the Utility's short-term borrowings and outstanding credit facilities at March 31, 2005 and December 31, 2004:  </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=640>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" COLSPAN=8>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=9>
<B><FONT SIZE=2><P ALIGN="CENTER"><BR>
March 31, 2005</B></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=2><P ALIGN="CENTER">December 31, 2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" COLSPAN=7 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=9 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" COLSPAN=8>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=2><P ALIGN="CENTER">Revolving Credit Limit</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=4>
<B><FONT SIZE=2><P ALIGN="CENTER">Outstanding</B></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=2><P ALIGN="CENTER">Outstanding</B></FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" COLSPAN=7 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=14>
<B><FONT SIZE=2><P>Short-Term Borrowings:</B></FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=14>
<B><FONT SIZE=2><P>PG&amp;E Corporation</B></FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" COLSPAN=8 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Senior credit facility</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">200&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=14>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total credit facilities</B></FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">200&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=14><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=14>
<B><FONT SIZE=2><P>Utility</B></FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" COLSPAN=8 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable financing</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">650&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Working capital facility</FONT></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">850&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT"> </FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">300&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="BOTTOM" COLSPAN=8 BGCOLOR="#c0c0c0" HEIGHT=14>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total credit facilities</B></FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,500&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">300&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" COLSPAN=7 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=3><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=3><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=3><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=3><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=3><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=3><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=3><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=3><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=3><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=3><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=3><P></P></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="BOTTOM" COLSPAN=7 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>

<FONT SIZE=2>
<P>&nbsp;</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=640>
<TR><TD WIDTH="85%" VALIGN="TOP" COLSPAN=4>
<B><FONT SIZE=2><P>Other Credit Facilities:</B></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
</TR>
<TR><TD WIDTH="85%" VALIGN="TOP" COLSPAN=4>
<B><FONT SIZE=2><P>Utility</B></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31, 2005</B></FONT></TD>
</TR>
<TR><TD WIDTH="85%" VALIGN="TOP" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#ffffff" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Letters of credit <SUP>(1)</SUP>:</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#ffffff" HEIGHT=14><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=29>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pollution control bond reimbursement <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;agreements</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=29><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=29>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=29>
<FONT SIZE=2><P ALIGN="RIGHT">620&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Working capital facility</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">155&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#ffffff" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#ffffff" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total letters of credit</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">775&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#ffffff" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#ffffff" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#ffffff" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#ffffff" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#ffffff" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#ffffff" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#ffffff" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;First mortgage bonds issued to secure and support various debt and credit facilities <SUP>(1)</SUP>:</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#ffffff" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#ffffff" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pollution control bond loan agreements, variable rates, due 2007</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">620&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pollution control bond loan agreement, 5.35%, due 2016</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">200&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pollution control bond loan agreements, 3.50% variable, due 2007</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">345&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pollution control bond reimbursement obligations, variable rates, due 2005</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">454&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Working capital facility</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">850&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=28>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total First Mortgage Bonds issued to secure and support various debt and credit <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;facilities</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=28><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">2,469&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="23%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="79%" VALIGN="TOP" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" HEIGHT=20>
<SUP><FONT SIZE=1><P>(1)</SUP></FONT></TD>
<TD WIDTH="74%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<FONT SIZE=1><P>Off-balance sheet commitments.</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
</TR>
</TABLE>


<B><FONT SIZE=2><P>PG&amp;E Corporation</P>
<I>
<P>Senior Credit Facility  </P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December 10, 2004, PG&amp;E Corporation entered into a $200 million revolving senior unsecured credit facility, or the senior credit facility, which includes a $50 million sublimit for the issuance of letters of credit and a $100 million sublimit for swing line loans (loans made available on a same day basis and repayable in full within thirty days).  Borrowings and letters of credit under the senior credit facility will be used for working capital and other corporate purposes.  On April 8, 2005, PG&amp;E Corporation entered into an amendment<A NAME="_DV_C33">, which became effective on April 12, 2005, to the senior</A> credit facility to extend its term from three years to five years, with all amounts due and payable on December 10, 2009.  In addition, the amendment made other changes to the senior credit facility to conform the covenants, representations and events of default to those in the Utility's working capital facility, discussed below.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At PG&amp;E Corporation's request and at the sole discretion of each lender, the senior credit facility may be extended for additional periods.  PG&amp;E Corporation has the right to increase, in one or more requests given no more than once a year, the aggregate facility by up to $100 million provided certain conditions are met.  At March 31, 2005, PG&amp;E Corporation had not made any borrowings or issued any letters of credit under the senior credit facility. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The fees and interest rates PG&amp;E Corporation pays under the senior credit facility vary depending on the Utility's unsecured debt ratings issued by S&amp;P and Moody's.  A facility fee based on the total amount of the senior credit facility (regardless of the usage) and a utilization fee based on the average daily amount outstanding under the senior credit facility are payable quarterly in arrears.  The utilization fee is payable during any quarter in which the average daily amount outstanding under the senior credit facility is in excess of 50% of the aggregate <A NAME="_DV_C35">amount of the facility.  At PG&amp;E Corporation's option, any loan under the senior credit facility (other than swing line loans) bears interest at a rate equal to the "applicable margin" plus one of the following indexes: (i)&nbsp;LIBOR or (ii)&nbsp;the base rate (the higher of (a)&nbsp;the administrative agent's base rate and (b)&nbsp;the Federal Funds rate plus 0.50%).  Each swing line loan bears interest at the applicable margin plus the base rate.  The<A NAME="_DV_M24"></A></A><B> </B>applicable margin ranges between 0.50% and 1.35% for Eurodollar loans, and 0% and 0.5% for base rate loans.  The facility fee ranges between 0.15% and 0.40%, and the utilization fee ranges between 0.125% and 0.25%.  <A NAME="_DV_C36">Interest is payable quarterly in arrears, or earlier for loans with shorter interest periods.</A></P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, PG&amp;E Corporation pays a fee for each letter of credit outstanding under the senior credit facility equal to the applicable margin for LIBOR loans to be shared by the lenders.  PG&amp;E Corporation also pays a fronting fee of 0.125% to the issuer of a letter of credit.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The senior credit facility includes <A NAME="_DV_C47">usual and customary covenants for credit facilities of this type, including covenants limiting liens, mergers, sales of all or substantially all of PG&amp;E Corporation's assets and other fundamental changes.  The senior credit facility requires<A NAME="_DV_M31"></A></A></FONT> <FONT SIZE=2>that PG&amp;E Corporation maintain a debt to capitalization ratio of at most 65% as of the end of each fiscal quarter and that PG&amp;E Corporation own, directly or indirectly, at least 80% of the common stock and at least 70% of the voting securities of the Utility.</P>

<P><A NAME="_DV_C52">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of a default by PG&amp;E Corporation under the senior credit facility, including cross-defaults relating to specified other debt of PG&amp;E Corporation or any of its significant subsidiaries in excess of $100 million, the lenders may terminate the commitments under the senior credit facility and declare the amounts outstanding, including all accrued interest and unpaid fees, payable immediately.  The lenders may also enforce all rights and remedies created under applicable law, including set-off rights, and all rights and remedies under the senior credit facility.  For events of default relating to insolvency, bankruptcy or receivership, the commitments are automatically terminated and the amounts outstanding become payable immediately.</A></P>
<I>
</I><B><P>Utility</P>
</B>
<B><I><P>Working Capital Facility</P>
</B></I></FONT>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April 8, 2005, the Utility entered into a $1 billion revolving credit facility, or the working capital facility.  This credit facility replaced the $850 million credit facility that the Utility entered into on March 5, 2004, shortly before the Utility's plan of reorganization under Chapter 11 became effective.  The working capital facility includes a $600&nbsp;million sublimit for the issuance of letters of credit and a $100&nbsp;million sublimit for swing line loans.  Loans under the working capital facility will be used primarily to cover operating expenses and seasonal fluctuations in cash flows and may also be used for bridge financing in connection with the reissuance of tax-exempt pollution control bonds.  Letters of credit under the working capital facility will be used primarily to provide credit enhancements to counterparties for natural gas and electricity procurement transactions.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to obtaining any required regulatory approvals and commitments from existing or new lenders and satisfaction of other specified conditions, the Utility may increase, in one or more requests given not more frequently than once a year, the aggregate lenders' commitments under the working capital facility by up to $500&nbsp;million or, in the event that the Utility's $650 million accounts receivable facility is terminated or expires, by up to $850<B> </B>million,<B> </B>in the aggregate for all such increases. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The working capital facility has a term of five years and all amounts will be due and payable on April 8, 2010.  At the Utility's request and at the sole discretion of each lender, the facility may be extended for additional periods.  The Utility has the right to replace any lender who does not agree to an extension.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The working capital facility includes usual and customary covenants for credit facilities of this type, including covenants limiting liens to those permitted under the Senior Notes indenture, mergers, sales of all or substantially all of the Utility's assets and other fundamental changes.  In addition, the working capital facility also requires that the Utility maintain a debt to capitalization ratio of at most 65% as of the end of each fiscal quarter.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of a default by the Utility under the working capital facility, including cross-defaults relating to specified other debt of the Utility or any of its significant subsidiaries in excess of $100 million, the lenders may terminate the commitments under the working capital facility and declare the amounts outstanding, including all accrued interest and unpaid fees, payable immediately.  The lenders may also enforce all rights and remedies created under applicable law, including set-off rights, and all rights and remedies under the working capital facility.  For events of default relating to insolvency, bankruptcy or receivership, the commitments are automatically terminated and the amounts outstanding become payable immediately.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The fees and interest rates the Utility pays under the working capital facility vary depending on the Utility's unsecured debt rating by S&amp;P and Moody's.  A facility fee based on the total amount of the working capital facility (regardless of the usage) and a utilization fee based on the average daily amount outstanding under the working capital facility are payable quarterly in arrears.  The utilization fee is payable during any quarter in which the average daily amount outstanding under the working capital facility is in excess of 50% of the aggregate amount of the facility.  At the Utility's option, any loan under the working capital facility (other than swing line loans) bears interest at a rate equal to the "applicable margin" plus one of the following indexes: (i)&nbsp;LIBOR or (ii)&nbsp;the base rate (the higher of (a)&nbsp;the administrative agent's base rate and (b)&nbsp;the Federal Funds rate plus 0.50%).  Each swing line loan bears interest at the applicable margin plus the base rate.  Interest is payable quarterly in arrears, or earlier for loans with shorter interest periods. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The facility fee, the utilization fee and the applicable margin are determined in accordance with the following table: <A NAME="_DV_M23"></A></P>
<P ALIGN="JUSTIFY"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=696>
<TR><TD WIDTH="21%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="44%" VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=2><P ALIGN="CENTER">Applicable Margin for</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="BOTTOM">&nbsp;</TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="23%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P ALIGN="CENTER">S&amp;P/Moody's Rating</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P ALIGN="CENTER">Base Rate<BR>
Loans</B></FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P ALIGN="CENTER">LIBOR Loans/Letters of Credit</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P ALIGN="CENTER">Facility Fee<BR>
Rate</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P ALIGN="CENTER">Utilization Fee<BR>
Rate</B></FONT></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="23%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P>A/A2 or higher</FONT></TD>
<TD WIDTH="2%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="CENTER">0%</FONT></TD>
<TD WIDTH="3%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="CENTER">0.220%</FONT></TD>
<TD WIDTH="2%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="CENTER">0.080%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="CENTER">0.100%</FONT></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="MIDDLE">
<FONT SIZE=2><P>A-/A3 </FONT></TD>
<TD WIDTH="2%" VALIGN="MIDDLE">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="CENTER">0%</FONT></TD>
<TD WIDTH="3%" VALIGN="MIDDLE">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="CENTER">0.300%</FONT></TD>
<TD WIDTH="2%" VALIGN="MIDDLE">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="CENTER">0.100%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.100%</FONT></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P>BBB+/Baa1</FONT></TD>
<TD WIDTH="2%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="CENTER">0%</FONT></TD>
<TD WIDTH="3%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="CENTER">0.350%</FONT></TD>
<TD WIDTH="2%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="CENTER">0.125%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="CENTER">0.125%</FONT></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="MIDDLE">
<FONT SIZE=2><P>BBB/Baa2</FONT></TD>
<TD WIDTH="2%" VALIGN="MIDDLE">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="CENTER">0%</FONT></TD>
<TD WIDTH="3%" VALIGN="MIDDLE">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="CENTER">0.425%</FONT></TD>
<TD WIDTH="2%" VALIGN="MIDDLE">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="CENTER">0.150%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.125%</FONT></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P>BBB-/Baa3</FONT></TD>
<TD WIDTH="2%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="CENTER">0%</FONT></TD>
<TD WIDTH="3%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="CENTER">0.575%</FONT></TD>
<TD WIDTH="2%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="MIDDLE" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="CENTER">0.175%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP" BGCOLOR="#c0c0c0">
<FONT SIZE=2><P ALIGN="CENTER">0.125%</FONT></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="MIDDLE">
<FONT SIZE=2><P>BB+/Ba1 or lower</FONT></TD>
<TD WIDTH="2%" VALIGN="MIDDLE">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="CENTER">0%</FONT></TD>
<TD WIDTH="3%" VALIGN="MIDDLE">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="CENTER">0.675%</FONT></TD>
<TD WIDTH="2%" VALIGN="MIDDLE">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="CENTER">0.200%</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">0.250%</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Utility's debt ratings from S&amp;P and Moody's are at different levels, the higher rating applies.  In addition, the Utility pays a fee for each letter of credit outstanding under the working capital facility equal to the applicable margin for LIBOR loans to be shared by the lenders.  The Utility also pays a fronting fee of 0.125% to the issuer of a letter of credit. </P>
</FONT><FONT FACE="Times" SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>At March 31, 2005, there were no loans outstanding under the $850 million working capital facility.  The Utility repaid $300 million of loans outstanding under the $850 million working capital facility on February 11, 2005.  At March 31, 2005, there were approximately $155 million of letters of credit outstanding under the $850 million working capital facility, which were transferred to the $1 billion working capital facility. </P>
<U>
</U><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April 20, 2005, the Utility borrowed $454 million under the working capital facility.  </FONT><FONT FACE="Times" SIZE=2>The proceeds were used to repay $454 million </FONT><FONT SIZE=2>under certain reimbursement obligations the Utility entered into in April 2004 when its plan of reorganization under Chapter 11 became effective.  These reimbursement obligations replaced the Utility's obligation to certain issuers of letters of credit that were drawn upon during the Chapter 11 proceeding in connection with the redemption of certain pollution control bonds that had been issued for the benefit of the Utility.  The Utility anticipates that the draw under its working capital facility will be repaid with the proceeds of a future tax-exempt financing through the issuance of bonds for the benefit of the Utility by the California Infrastructure and Economic Development Bank.  The Utility passes on to its customers interest cost savings attributable to the lower interest rates associated with such tax-exempt financing. </P>
<U>
</U><B><P><A NAME="_NOTE_4:_"></A>NOTE 4:  ENERGY RECOVERY BONDS</P>
<P ALIGN="JUSTIFY"></P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Settlement Agreement, PG&amp;E Corporation and the Utility agreed to seek to refinance the unamortized portion of the Settlement Regulatory Asset and associated federal and state income and franchise taxes, in an aggregate principal amount of up to $3.0 billion in two separate series up to one year apart, using a securitized financing supported by a dedicated rate component, or DRC.  On February 10, 2005, PERF issued $1.9&nbsp;billion of ERBs.  The proceeds of the ERBs were used by PERF to purchase from the Utility the right, known as "recovery property," to be paid a specified amount from a DRC.  DRC charges are authorized by the CPUC under state legislation and will be paid by the Utility's electricity customers until the ERBs are fully retired.  Under the terms of a recovery property servicing agreement, DRC charges are collected by the Utility and remitted to PERF.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The aggregate principal amount of the first series of ERBs issued was approximately $1.9 billion.  They were issued in five classes, with scheduled maturities ranging from September 25, 2006 to December 25, 2012, and final legal maturities ranging from September 25, 2008 to December 25, 2014.  Interest rates on the five classes range from 3.32% for the earliest maturing class to 4.47% for the latest maturing class.  The proceeds of the first series of ERBs were paid by PERF to the Utility and were used by the Utility to refinance the remaining unamortized after-tax balance of the Settlement Regulatory Asset.  The proceeds of the second series of ERBs, anticipated to be issued in November&nbsp;2005 in an aggregate amount of up to $1.1&nbsp;billion, will be paid by PERF to the Utility to pre-fund the Utility's recovery through rates of the tax payments that will be due as the Utility collects the DRC over the term of the first series of ERBs to pay principal.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The total principal amount of ERBs outstanding was $1.9 billion at March 31, 2005.  The scheduled principal payments on the ERBs for the years 2005 through 2009 are $140 million, $221 million, $230 million, $239 million, and $248 million, respectively.</FONT>  <FONT SIZE=2>While PERF is a wholly owned consolidated subsidiary of the Utility, PERF is legally separate from the Utility.  The assets of PERF (including the recovery property) are not available to creditors of PG&amp;E Corporation or the Utility and the recovery property is not legally an asset of the Utility or PG&amp;E Corporation.  </P>
<B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><A NAME="NOTE_5">NOTE 5:  SHAREHOLDERS' EQUITY</P>
<P ALIGN="JUSTIFY"></P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation's and the Utility's changes in shareholders' equity for the three months ended March 31, 2005 were as follows:</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=624>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=34>
<FONT SIZE=2><P></A></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=34><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=34>
<B><FONT SIZE=2><P ALIGN="CENTER">PG&amp;E Corporation</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=34><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=34>
<B><FONT SIZE=2><P ALIGN="CENTER">Utility</B></FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="BOTTOM" HEIGHT=51>
<FONT SIZE=2><P>(in millions)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=51><P></P></TD>
<TD WIDTH="17%" VALIGN="MIDDLE" COLSPAN=2 HEIGHT=51>
<B><FONT SIZE=2><P ALIGN="CENTER">Total Common Shareholders' Equity</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=51><P></P></TD>
<TD WIDTH="17%" VALIGN="MIDDLE" COLSPAN=2 HEIGHT=51>
<B><FONT SIZE=2><P ALIGN="CENTER">Total Shareholders' Equity</B></FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=7><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=7><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=7><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=7><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=7><P></P></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>Balance at December 31, 2004</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">8,633&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">9,130&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Net income</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">218&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">223&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=17>
<FONT SIZE=2><P>Common stock issued</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">120&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>PG&amp;E Corporation common stock repurchased:</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=32>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Settlement of accelerated share repurchase obligation -<BR>
&nbsp;&nbsp;&nbsp;February 2005</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=32><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=32>
<FONT SIZE=2><P ALIGN="RIGHT">(14)</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=32><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=32>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Accelerated share repurchase - March 2005</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(1,051) </FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Utility common stock repurchased</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(960)</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Common restricted stock issued</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Common restricted stock cancelled</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Common restricted stock amortization</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=17>
<FONT SIZE=2><P>Common stock dividends declared but not yet paid</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(111)</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(110)</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Preferred stock dividends</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(4)</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Tax benefit from employee stock options</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">25&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Minimum pension liability adjustment</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(1)</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(2)</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Other</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(1)</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(1)</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=16>
<B><FONT SIZE=2><P>Balance at March 31, 2005</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">7,821&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">8,276&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=7 HEIGHT=19><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<I><FONT SIZE=2><P ALIGN="JUSTIFY">Stock Repurchases</P>
</I><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February 22, 2005, under an accelerated share repurchase arrangement entered into on December 15, 2004, PG&amp;E Corporation paid Goldman Sachs &amp; Co., or GS&amp;Co., approximately $14 million as a price adjustment based on the daily volume weighted average market price of PG&amp;E Corporation common stock over the term of the arrangement.  PG&amp;E Corporation charged the payment to Common Stock within Common Shareholders' Equity.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March 4, 2005, PG&amp;E Corporation entered into a new accelerated share repurchase arrangement with GS&amp;Co. under which PG&amp;E Corporation repurchased 29,489,400 shares of its common stock at an initial price of $35.60 per share (for an aggregate amount of approximately $1.05 billion).  The repurchase was funded from available cash on hand and the repurchased shares were retired.  PG&amp;E Corporation charged approximately $460 million to Common Stock and approximately $591 million to Accumulated Earnings within Common Shareholders' Equity in respect of these transactions.  Under the accelerated share repurchase arrangement, PG&amp;E Corporation may receive from, or be required to pay to, GS&amp;Co. a price adjustment based on the daily volume weighted average market price of PG&amp;E Corporation common stock over the term of the arrangement (approximately six months).  Because the price adjustment and any additional payments that PG&amp;E Corporation may be required to make can be settled at PG&amp;E Corporation's option, in cash or in shares of its common stock, or a combination of the two, PG&amp;E Corporation accounts for its payment obligations as equity. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until the transaction is completed or terminated, GAAP requires PG&amp;E Corporation to assume that it will issue shares to settle its obligations (up to a maximum of two times the number of shares repurchased or 58,978,800 shares).  PG&amp;E Corporation must calculate the number of shares that would be required to satisfy its obligations upon completion of the transaction based on the market price of PG&amp;E Corporation's common stock at the end of a reporting period.  The number of shares that would be required to satisfy the obligations must be treated as outstanding for purposes of calculating diluted earnings per share.  At March 31, 2005, PG&amp;E Corporation did not have any net payment obligations to GS&amp;Co. Accordingly, no additional shares of PG&amp;E Corporation common stock attributable to the accelerated repurchase arrangement were treated as outstanding for purposes of calculating diluted earnings per share.  Based upon the average price of PG&amp;E Corporation stock from March 4, 2005 to March 31, 2005, and additional payments, GS&amp;Co. had a net payment obligation to PG&amp;E Corporation of approximately $1 million at March 31, 2005. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March 8, 2005, the Utility used proceeds from the issuance of ERBs (discussed in Note 4) to repay debt and to repurchase 22,023,283 shares of its common stock from PG&amp;E Corporation for an aggregate purchase price of approximately $960 million.  The Utility recognized charges of approximately $141 million to Additional Paid-in Capital, approximately $110 million to Common Stock, and approximately $709 million to Reinvested Earnings within Shareholders' Equity in respect of this transaction.</P>
</FONT><B><I><P ALIGN="JUSTIFY"></P>
<FONT SIZE=2><P ALIGN="JUSTIFY">Dividends</P>
</B></I><P ALIGN="JUSTIFY"></P>
<P><A NAME="OLE_LINK1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</A>On February 16, 2005, the Board of Directors of the Utility declared a dividend of $117 million that was paid on February 17, 2005, to PG&amp;E Corporation and PG&amp;E Holdings LLC, a wholly owned subsidiary of the Utility that held approximately 6% of the Utility's common stock.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Also, on February 16, 2005, the Board of Directors of PG&amp;E Corporation declared a quarterly common stock dividend of $0.30 per share to shareholders of record on March 31, 2005.  On April 15, 2005, PG&amp;E Corporation paid this dividend totaling approximately $118 million, of which approximately $7 million was paid to Elm Power Corporation, a wholly owned subsidiary of PG&amp;E Corporation.  In addition, PG&amp;E Corporation paid approximately $6 million in dividend equivalent payments to Convertible Subordinated Note holders of record on March 31, 2005.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation charged dividends declared to Accumulated Earnings and the Utility charged dividends declared to Reinvested Earnings.</P>
<B><P ALIGN="JUSTIFY"></P>
<P><A NAME="_NOTE_5:_"></A>NOTE 6:  RISK MANAGEMENT ACTIVITIES </P>
<P ALIGN="JUSTIFY"></P>
<P>Non-Trading Activities </P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility enters into non-trading activities related to procurement of electricity and contracts associated with the natural gas and nuclear fuel portfolio.  On the Utility's Consolidated Balance Sheets, price risk management activities are presented at fair value of $17<B> </B>million in other current assets for March 31, 2005, and $5 million in other current assets and $11 million in other current liabilities for December 31, 2004.  The costs of these derivatives are recovered in regulated rates charged to customers and the Utility records the offset to the regulatory accounts.</P>

<B><P>Credit Risk</B> </P>
<B>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit risk is the risk of loss that PG&amp;E Corporation and the Utility would incur if customers or counterparties failed to perform their contractual obligations.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation had gross accounts receivable of approximately $2.0 billion at March 31, 2005 and $2.2 billion at December 31, 2004.  The majority of the accounts receivable are associated with the Utility's residential and small commercial customers.  Based upon historical experience and evaluation of then-current factors, allowances for doubtful accounts of approximately $88 million at March 31, 2005 and $93 million at December 31, 2004 were recorded against those accounts receivable.  In accordance with tariffs, credit risk exposure is limited by requiring deposits from new customers and from those customers whose past payment practices are below standard.  The Utility has a regional concentration of credit risk associated with its receivables from residential and small commercial customers in northern and central California.  However, material loss due to non-performance from these customers is not considered likely. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility manages credit risk for its largest customers or counterparties by assigning credit limits based on an evaluation of their financial condition, net worth, credit rating, and other credit criteria as deemed appropriate.  Credit limits and credit quality are monitored frequently and a detailed credit analysis is performed at least annually.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit exposure for the Utility's largest customers and counterparties is calculated daily.  If exposure exceeds the established limits, the Utility takes immediate action to reduce the exposure or obtain additional collateral, or both.  Further, the Utility relies on master agreements that require security, referred to as credit collateral, in the form of cash, letters of credit, corporate guarantees of acceptable credit quality, or eligible securities if current net receivables and replacement cost exposure exceed contractually specified limits. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility calculates gross credit exposure for each of its wholesale customers and counterparties as the current mark-to-market value of the contract (<I>i.e.</I>, the amount that would be lost if the counterparty defaulted today) plus or minus any outstanding net receivables or payables, before the application of credit collateral.  During 2004, the Utility recognized no material losses due to contract defaults or bankruptcies.  At March 31, 2005, there were two counterparties that represented greater than 10% of the Utility's net credit exposure.  Both of these counterparties were investment grade representing a total of approximately 47% of the Utility's net wholesale credit exposure.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility conducts business with wholesale counterparties mainly in the energy industry, including other California investor-owned electric utilities, municipal utilities, energy trading companies, financial institutions, and oil and natural gas production companies located in the United States and Canada.  This concentration of counterparties may impact the Utility's overall exposure to credit risk because counterparties may be similarly affected by economic or regulatory changes, or other changes in conditions.  Credit losses experienced as a result of electrical and gas procurement activities are expected to be recoverable from customers and are therefore, not expected to have a material impact on earnings.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The schedule below summarizes the Utility's net credit risk exposure, as well as the Utility's credit risk exposure to its wholesale customers or counterparties with a greater than 10% net credit exposure, at March 31, 2005 and December 31, 2004:</P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=660>
<TR><TD WIDTH="25%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=2><P ALIGN="CENTER">Gross Credit<BR>
Exposure Before<BR>
Credit Collateral <SUP>(1)</B></SUP></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER"><BR>
Credit<BR>
Collateral<SUP> </B></SUP></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER"><BR>
Net Credit<BR>
Exposure <SUP>(2)</B></SUP></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P ALIGN="CENTER">Number of<BR>
Wholesale<BR>
Customer or<BR>
Counterparties<BR>
&gt;10%</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">Net Exposure to<BR>
Wholesale<BR>
Customer or<BR>
Counterparties<BR>
&gt;10%</B></FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<B><FONT SIZE=2><P>March 31, 2005</B></FONT></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">209&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">195&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">92&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<B><FONT SIZE=2><P>December 31, 2004</B><SUP> </SUP></FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">105&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">98&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">62&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=15 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="75%" VALIGN="TOP" COLSPAN=13 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=15 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP">
<SUP><FONT SIZE=1><P>(1)</SUP></FONT></TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=15>
<FONT SIZE=1><P>Gross credit exposure equals mark-to-market value, notes receivable and net receivables (payables) where netting is contractually allowed.  Gross and net credit exposure amounts reported above do not include adjustments for time value, liquidity or credit reserves.  The Utility's gross credit exposure includes wholesale activity only.  Retail activity and payables are not included.  Retail activity at the Utility consists of the accounts receivable from the sale of natural gas and electricity to residential and small commercial customers.</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP">
<SUP><FONT SIZE=1><P>(2)</SUP></FONT></TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=15>
<FONT SIZE=1><P>Net credit exposure is the gross credit exposure minus credit collateral (cash deposits and letters of credit).  For purposes of this table, parental guarantees are not included as part of the calculation.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The schedule below summarizes the credit quality of the Utility's net credit risk exposure to the Utility's wholesale customers and counterparties at March 31, 2005 and December 31, 2004:</P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=590>
<TR><TD WIDTH="39%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=34>
<B><FONT SIZE=2><P><BR>
(in millions)<BR>
 <BR>
</B></FONT></TD>
<TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=34><P></P></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=34>
<B><FONT SIZE=2><P ALIGN="CENTER">Net Credit<BR>
Exposure <SUP>(2)</B></SUP></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=3 HEIGHT=34><P></P></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" HEIGHT=34>
<B><FONT SIZE=2><P ALIGN="CENTER">Percentage of Net<BR>
Credit Exposure</B></FONT></TD>
</TR>
<TR><TD WIDTH="39%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P>Credit Quality <SUP>(1)</B></SUP></FONT></TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=6 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 HEIGHT=6><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P>March 31, 2005</B></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Investment grade <SUP>(3) </SUP></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">192&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="CENTER">98%</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Non-investment grade</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">3&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="CENTER">2%</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<B><FONT SIZE=2><P>Total</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">195&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="CENTER">100%</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P>December 31, 2004</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Investment grade <SUP>(3)</SUP></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">79&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="CENTER">81%</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Non-investment grade</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">19&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="CENTER">19%</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 HEIGHT=14>
<B><FONT SIZE=2><P>Total</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">98&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="CENTER">100%</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="96%" VALIGN="TOP" COLSPAN=9 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="76%" VALIGN="TOP" COLSPAN=8 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="96%" VALIGN="TOP" COLSPAN=9 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=31>
<SUP><FONT SIZE=1><P>(1)</SUP></FONT></TD>
<TD WIDTH="96%" VALIGN="TOP" COLSPAN=9 HEIGHT=31>
<FONT SIZE=1><P>Credit ratings are determined by using publicly available information.  If provided a guarantee by a higher rated entity (e.g., an affiliate), the rating is determined based on the rating of the guarantor.</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=30>
<SUP><FONT SIZE=1><P>(2)</SUP></FONT></TD>
<TD WIDTH="96%" VALIGN="TOP" COLSPAN=9 HEIGHT=30>
<FONT SIZE=1><P>Net credit exposure is the gross credit exposure minus credit collateral (cash deposits and letters of credit).  For purposes of this table, parental guarantees are not included as part of the calculation.</FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP" HEIGHT=40>
<SUP><FONT SIZE=1><P>(3)</SUP></FONT></TD>
<TD WIDTH="96%" VALIGN="TOP" COLSPAN=9 HEIGHT=40>
<FONT SIZE=1><P>Investment grade is determined using publicly available information, i.e., rated at least Baa3 by Moody's and BBB- by S&amp;P.  The Utility has assessed certain governmental authorities that are not rated through publicly available information as investment grade based upon an internal assessment of credit worthiness.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<B><P><A NAME="_NOTE_6:_"></A>NOTE 7:  COMMITMENTS AND CONTINGENCIES</P>
</B><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation and the Utility have substantial financial commitments and contingencies in connection with agreements entered into supporting the Utility's operating activities.</P>
<P ALIGN="JUSTIFY"></P>
<B><P ALIGN="JUSTIFY">Commitments</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">PG&amp;E Corporation</P>
<P ALIGN="JUSTIFY"></P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the three months ended March 31, 2005, PG&amp;E Corporation did not have any material new commitments or changes to its material commitments, other than those related to the Utility discussed below.  See PG&amp;E Corporation's and the Utility's combined 2004 Annual Report for further discussion. </P>
<B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Utility</P>
</B><P ALIGN="JUSTIFY"></P>
<B><I><P>Power Purchase Agreements</P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As part of the ordinary course of business, the Utility entered into various agreements to purchase energy and makes payments on existing power purchase agreements.  At March 31, 2005, the undiscounted future expected power purchase agreement payments were as follows:</P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=240>
<TR><TD WIDTH="75%" VALIGN="TOP">
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>2005</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$ </FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,844&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>2006</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,975&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>2007</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,028&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>2008</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,850&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>2009</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,638&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>Thereafter </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">11,722&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Total </B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>$ </FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">21,057&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments made by the Utility under power purchase agreements amounted to approximately $422 million for the three months ended March 31, 2005, and $464 million for the same period in 2004.  </P>

<B><I><P>Natural Gas Supply and Transportation Commitments</B></I> </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility purchases natural gas directly from producers and marketers in both Canada and the United States to serve its core customers.  The contract lengths and natural gas sources of the Utility's portfolio of natural gas procurement contracts has fluctuated, generally based on market conditions. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At March 31, 2005, the Utility's obligations for natural gas purchases and gas transportation services were as follows: </P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=240>
<TR><TD WIDTH="75%" VALIGN="TOP">
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>2005</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$ </FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">916&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>2006</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">220&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>2007</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">7&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>2008</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>2009</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>Thereafter </FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Total </B></FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>$ </FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,143&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="75%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="20%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments made by the Utility for natural gas purchases and gas transportation services amounted to approximately $588 million for the three months ended March 31, 2005, and $529 million for the same period in 2004.</P>
<B>
<I><P>Reliability Must Run Agreements</P>
</B></I></FONT>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The ISO has entered into reliability must run, or RMR, agreements with various power plant owners, including the Utility, that require designated units, known as RMR units, to remain available to generate electricity upon the ISO's demand when needed for local transmission system reliability.  At March 31, 2005, as a party to a Transmission Control Agreement, or TCA, </FONT><FONT FACE="Times" SIZE=2>the Utility estimated that it could be obligated to pay the ISO approximately $211 million for costs incurred under these RMR agreements during the period April 1, 2005 to June 30, 2006.  Of this amount, the Utility estimates it would receive approximately $21 million under these RMR agreements during the same period.  These payments and receipts are subject to applicable ratemaking mechanisms.</P>
</FONT><FONT SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June 2000, a FERC administrative law judge, or ALJ, issued an initial decision addressing subsidiaries of Mirant Corporation.  The decision approved rates and a ratemaking methodology that, if affirmed by the FERC, will require the Mirant subsidiaries that are parties to three RMR agreements with the ISO to refund to the ISO, and the ISO to refund to the Utility, excess payments of approximately $360 million, including interest, for the availability of RMR plants under these agreements.  On July 14, 2003, Mirant Corporation and certain of its subsidiaries filed a petition for reorganization under Chapter 11 and on December 15, 2003, the Utility filed claims in Mirant's Chapter 11 proceeding including a claim for an RMR refund.  On January 14, 2005, the Utility entered into a settlement with Mirant Corporation and its subsidiaries that own RMR units that, among other matters, will resolve the Utility's claim through September 30, 2004.  The settlement agreement is described below.  In its order approving the settlement agreement issued April 13, 2005, the FERC terminated the Mirant RMR rate case without deciding the merits of the June 2000 initial decision.  The Utility will seek rehearing of only that part of the order terminating the RMR case.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In November 2001, after the ALJ issued the initial decision in the Mirant subsidiaries' rate case, two complaints were filed at the FERC against other RMR plant owners, including the Utility, alleging that the ratemaking methodology approved in the ALJ's initial decision should be applied to the other RMR agreements.  The complainants asked the FERC to take no action until after the FERC issues its final decision in the Mirant subsidiaries' rate case.  If the FERC adopted the ALJ's decision and applied the ratemaking methodology to the Utility's RMR plants, the Utility could have been required to refund payments it had received from the ISO for the availability of the Utility's RMR plants.  However, on March 23, 2005, the FERC approved a settlement between the Utility and all the complainants that resulted in the withdrawal of the complaint with no decision by the FERC on its merits. </P>
<B><P ALIGN="JUSTIFY"></P>
<I><P ALIGN="JUSTIFY">Other Commitments and Operating Leases</P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility has other commitments relating to operating leases, capital infusion agreements, equipment replacements, the self-generation incentive program exchange agreements<B> </B>and telecommunication contracts.  At March&nbsp;31, 2005, the future minimum payments related to other commitments were as follows: </P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=268>
<TR><TD VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
</TR>
<TR><TD WIDTH="76%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="24%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="76%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>2005</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">136&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="76%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>2006</FONT></TD>
<TD WIDTH="24%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">47&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="76%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>2007</FONT></TD>
<TD WIDTH="24%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">17&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="76%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>2008</FONT></TD>
<TD WIDTH="24%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">14&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="76%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>2009</FONT></TD>
<TD WIDTH="24%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">6&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="76%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P>Thereafter</FONT></TD>
<TD WIDTH="24%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">14&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="76%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="76%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Total</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">234&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="76%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="76%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="24%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="76%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments made by the Utility for other commitments amounted to approximately $17 million for the three months ended March 31, 2005, and $23 million for the same period in 2004.</P>
<B>
<P>Contingencies</P>
</B>
<B><P ALIGN="JUSTIFY">PG&amp;E Corporation</P>

</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation retains a guarantee related to certain NEGT indemnity obligations issued to the purchaser of an NEGT subsidiary company during 2000, up to $150 million.  The underlying indemnity obligations of NEGT have expired and PG&amp;E Corporation's sole remaining exposure relates to the potential of environmental obligations that were known to NEGT at the time of the sale but not disclosed to the purchaser.  PG&amp;E Corporation has never received any claims nor does it consider it probable any claims will occur under the guarantee.  Accordingly, PG&amp;E Corporation has made no provision for this guarantee at March 31, 2005.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation also retains a guarantee of the Utility's underlying obligation to pay workers' compensation claims.  As of March 31, 2005, the actuarially determined workers' compensation liability was approximately $226.7 million.</P>

<B><P>Utility</P>
<I>
<P>PX Block-Forward Contracts</P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility had PX block-forward contracts, which were seized by California's then-Governor Gray Davis in February 2001 for the benefit of the state, acting under California's Emergency Services Act.  The block-forward contracts had an estimated unrealized gain of up to $243 million at the time the state of California seized them.  The Utility, the PX, and some of the PX market participants have filed claims in state court against the state of California to recover the value of the seized contracts; the state of California disputes the plaintiffs' rights to recover and valuations.  The estimated value of the seized contracts has been fully reserved in the Utility's financial statements.  This state court litigation is pending.</P>

<B><I><P>California Energy Crisis Proceedings </P>
</B></I></FONT>
<I><FONT SIZE=2><P ALIGN="JUSTIFY">FERC Proceedings </P>
</I><B>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Various entities, including the Utility and the state of California are seeking up to $8.9 billion in refunds for electricity overcharges on behalf of California electricity purchasers for the period May 2000 to June 2001 through a proceeding pending at the FERC and in the appellate courts reviewing FERC decisions.  This proceeding, the Refund Proceeding, commenced on August 2, 2000 when a complaint was filed against all suppliers in the ISO and PX markets.  On July 25, 2001, the FERC held that refunds would be available for certain overcharges, and established a process to determine the refunds but asserted that it could not order market-wide refunds for periods before October 2, 2000.  In December 2002, a FERC ALJ issued an initial decision in the Refund Proceeding finding that power suppliers overcharged the utilities, the state of California and other buyers approximately $1.8 billion from October 2, 2000 to June 20, 2001, but that California buyers still owe the power suppliers approximately $3.0 billion, leaving approximately $1.2 billion in net unpaid bills.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In March 2003, the FERC confirmed most of the ALJ's findings in the Refund Proceeding, but partially modified the refund methodology to include use of a new natural gas price methodology as the basis for mitigated prices.  The FERC indicated that it would consider later allowances claimed by sellers for natural gas costs above the natural gas prices in the refund methodology.  In March, 2005 FERC extended the time for review of gas allowance claims by four months.  The FERC directed the ISO and the PX (which operates solely to reconcile remaining refund amounts owed) to make compliance filings establishing refund amounts.  The ISO has indicated that it plans to make its compliance filing during the fourth quarter of 2005 with the PX to follow but these filings may be delayed until later in 2005 by an extension granted by FERC for submission of gas allowance claims.  In October 2003, the FERC affirmed its March 2003 decision and various parties appealed to the Ninth Circuit.  Briefs have been submitted concerning which power suppliers are subject to refunds, the appropriate time period for which refunds can be ordered, and which transactions are subject to refunds.  These matters were argued before the Ninth Circuit on April 12 and 13, 2005, and a decision is expected in the following months. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The final refunds will not be determined until the FERC issues a final decision in the Refund Proceeding, following the ISO and PX compliance filings and the resolution of the appeals of the FERC's orders.  In addition, future refunds could increase or decrease as a result of retroactive adjustments proposed by the ISO, which incorporate revised data provided by the Utility and other entities.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the FERC's separate proceedings to investigate whether tariff violations occurred in the period before October 2, 2000, the FERC has asserted that it has the power to order power suppliers to disgorge any profits if the FERC finds that the tariffs in force at that time were violated or subject to manipulation.  In September 2004, the Ninth Circuit found that the FERC has the authority to provide refunds for tariff violations involving inadequate transaction reporting for sales into the California spot markets throughout the period before October 2, 2000.  The FERC has not yet acted on this finding and it is uncertain how it will be applied by the FERC. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility recorded approximately $1.8 billion of claims filed by various electricity generators in its Chapter 11 proceeding as disputed claims.  This amount is subject to a pre-petition offset of approximately $200 million, reducing the net liability recorded to approximately $1.6 billion.  Under a bankruptcy court order, the aggregate allowable amount of ISO, PX and generator claims was limited to approximately $1.6 billion.  The Utility currently estimates that the claims would have been reduced to approximately $1.0 billion based on the refund methodology recommended in the FERC ALJ's initial decision.  The revised methodology adopted by the FERC's March 2003 decision could further reduce the amount by several hundred million dollars, offset by the amount of any additional fuel cost allowance for suppliers.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility has entered into settlements with various power suppliers resolving the Utility's claims against these power suppliers.  With the approval of the bankruptcy court, the Utility has withdrawn the amounts resulting from those settlements from the escrow established on the Effective Date for payment of ISO and PX amounts.  As of March 31, 2005, the Utility has recorded offsets to the Settlement Regulatory Asset of approximately $309 million, pre-tax ($183 million, after-tax) in connection with these settlements.  The final net after-tax amount of any amounts received by the Utility under future settlements with energy suppliers will be credited to customers, either as a reduction to the principal amount of the second series of ERBs, anticipated to be issued in November 2005, or if refunds are received after the second series of ERBs is issued, as a credit to the balancing account that tracks recovery of the customer costs and benefits related to the ERBs.  </P>
<B><I>
</B><P ALIGN="JUSTIFY">Mirant Settlement</I> </P>
<B><P ALIGN="JUSTIFY"></P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In January 2005, the Utility and other parties entered into a settlement agreement with Mirant Corporation and certain of its subsidiaries, or Mirant.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The first part of the two-part settlement is between Mirant and several California parties, including the California Attorney General's Office, the California Department of Water Resources, or DWR, the CPUC, Southern California Edison, San Diego Gas &amp; Electric Company, and the Utility, or the California Parties, resolving market manipulation claims, including Mirant's liability for FERC refunds, penalties and civil liabilities arising out of the California energy crisis in 2000 to 2001.  Under this portion of the agreement, Mirant will provide the California Parties approximately $320 million in cash equivalents and $175 million of allowed claims in Mirant's bankruptcy proceeding.  Of these amounts, the Utility will receive approximately $130 million in cash equivalents and $40 million in allowed claims.  The final cash value of the allowed claims will not be known until the completion of Mirant's bankruptcy proceeding.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The second part of the settlement is between the Utility and Mirant and is designed to settle claims that Mirant overcharged the Utility under Mirant's RMR contracts and other disputes.  Under the settlement agreement, Mirant has agreed to transfer to the Utility the equipment, permits and contracts for the construction of Contra Costa Unit 8, a modern 530-megawatt power plant Mirant started to build, but never completed.  The Utility plans to file an application with the CPUC to seek authorization to complete and operate Contra Costa Unit 8 under a cost-of-service ratemaking structure.  If the Utility and Mirant do not complete the necessary transfer agreement or if the Utility does not receive the necessary approvals, including CPUC authorization, the Utility will be paid at least $70 million in lieu of transferring the assets.  The settlement agreement also includes a contract that would give the Utility the right from 2006 through 2012 to dispatch power from certain RMR units owned by Mirant subsidiaries when the facilities are not needed by the ISO to meet local reliability needs.  In addition, the Utility will receive approximately $60 million of allowed claims, credits, offsets, and/or cash from Mirant and Mirant will withdraw its outstanding claim in the Utility's bankruptcy proceeding of approximately $20 million.  The settlement may also include separate options under which the Utility, under certain circumstances, would have the right to acquire Mirant's existing Contra Costa and Pittsburg power plants.  </P>
<P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The settlement agreement became effective on April 15, 2005, after all regulatory and other approvals required by the settlement agreement were obtained.  </P>
<B><I>
<P>Nuclear Insurance</P>
</B></I><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility has several types of nuclear insurance for the Diablo Canyon Power Plant, or Diablo Canyon, and Humboldt Bay Unit 3.  The Utility has insurance coverage for property damages and business interruption losses as a member of Nuclear Electric Insurance Limited, or NEIL.  NEIL is a mutual insurer owned by utilities with nuclear facilities.  NEIL provides property damage and business interruption coverage of up to $3.24 billion per incident.  Under this insurance, if any nuclear generating facility insured by NEIL suffers a catastrophic loss causing a prolonged outage, the Utility may be required to pay an additional premium of up to $42.5 million per one-year policy term.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NEIL also provides coverage for damages caused by acts of terrorism at nuclear power plants.  If one or more acts of domestic terrorism cause property damage covered under any of the nuclear insurance policies issued by NEIL to any NEIL member within a 12-month period, the maximum recovery under all those nuclear insurance policies may not exceed $3.24 billion plus the additional amounts recovered by NEIL for these losses from reinsurance.  Under the Terrorism Risk Insurance Act of 2002, there is no policy coverage limitations for an act caused by foreign terrorists because NEIL would be entitled to receive substantial reimbursement by the federal government.  The Terrorism Risk Insurance Act of 2002 expires on December 31, 2005. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the Price-Anderson Act, public liability claims from a nuclear incident are limited to $10.8 billion.  As required by the Price-Anderson Act, the Utility purchased the maximum available public liability insurance of $300 million for Diablo Canyon.  The balance of the $10.8 billion of liability protection is covered by a loss-sharing program among utilities owning nuclear reactors.  Under the Price-Anderson Act, owner participation in this loss-sharing program is required for all owners of nuclear reactors that are licensed to operate, designed for the production of electrical energy, and have a rated capacity of 100 megawatts, or MW, or higher.  If a nuclear incident results in costs in excess of $300 million, then the Utility may be responsible for up to $100.6 million per reactor, with payments in each year limited to a maximum of $10 million per incident until the Utility has fully paid its share of the liability.  Since Diablo Canyon has two nuclear reactors each with a rated capacity of over 100 MW, the Utility may be assessed up to $201.2 million per incident, with payments in each year limited to a maximum of $20 million per incident.  Although the Price-Anderson Act expired on December 31, 2003, coverage continues to be provided to all licensees, including Diablo Canyon, which had coverage before December 31, 2003.  Congress may address renewal of the Price-Anderson Act in future energy legislation.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the Utility has $53.3 million of liability insurance for the retired nuclear generating unit at Humboldt Bay power plant and has a $500 million indemnification from the NRC, for public liability arising from nuclear incidents covering liabilities in excess of the $53.3 million of liability insurance.</P>
<P ALIGN="JUSTIFY"></P>
<B><I><P>California Department of Water Resources Contracts</P>

</B></I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Electricity from the DWR allocated contracts provided approximately 28% of the electricity delivered to the Utility's customers for the three-month period ended March 31, 2005.  The DWR purchased the electricity under contracts with various generators.  The Utility is responsible for administration and dispatch of the DWR's electricity procurement contracts allocated to the Utility for purposes of meeting a portion of the Utility's net open position, which is the portion of the demand of a utility's customers, plus applicable reserve margins, not satisfied from that utility's own generation facilities and existing electricity contracts.  The DWR remains legally and financially responsible for its electricity procurement contracts.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The current DWR contracts terminate at various times through 2012, and consist of must-take and capacity charge contracts.  Under must-take contracts, the DWR must take and pay for electricity generated by the applicable generating facilities regardless of whether the electricity is needed.  Under capacity charge contracts, the DWR must pay a capacity charge but is not required to purchase electricity unless that electricity is dispatched and delivered.  In the Utility's proposed long-term integrated energy resource plan filed with the CPUC in July 2004 and approved in December 2004, the Utility has not assumed that the DWR contracts will be renewed beyond their current expiration dates.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The DWR has stated publicly that it intends to transfer full legal title to, and responsibility for, the DWR power purchase contracts to the California investor-owned electric utilities as soon as possible.  However, the DWR power purchase contracts cannot be transferred to the Utility without the consent of the CPUC.  The Settlement Agreement provides that the CPUC will not require the Utility to accept an assignment of, or to assume legal or financial responsibility for, the DWR power purchase contracts unless each of the following conditions has been met:</P>
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<FONT SIZE=2><P>After assumption, the Utility's issuer rating by Moody's will be no less than A2 and the Utility's long-term issuer credit rating by S&amp;P will be no less than A;</FONT></TD>
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<FONT SIZE=2><P>The CPUC first makes a finding that the DWR power purchase contracts to be assumed are just and reasonable; and</FONT></TD>
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<FONT SIZE=2><P>The CPUC has acted to ensure that the Utility will receive full and timely recovery in its retail electricity rates of all costs associated with the DWR power purchase contracts to be assumed without further review.</FONT></TD>
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<B><I><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
</I><P ALIGN="JUSTIFY">Environmental Matters </P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility may be required to pay for environmental remediation at sites where it has been, or may be, a potentially responsible party under the Comprehensive Environmental Response Compensation and Liability Act of 1980, or CERCLA, as amended, and similar state environmental laws.  These sites include former manufactured gas plant sites, power plant sites, and sites used by the Utility for the storage, recycling, or disposal of potentially hazardous materials.  Under federal and California laws, the Utility may be responsible for remediation of hazardous substances even if the Utility did not deposit those substances on the site.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The cost of environmental remediation is difficult to estimate.  The Utility records an environmental remediation liability when site assessments indicate remediation is probable and it can estimate a range of reasonably likely clean-up costs.  The Utility reviews its remediation liability on a quarterly basis for each site where it may be exposed to remediation responsibilities.  The liability is an estimate of costs for site investigations, remediation, operations and maintenance, monitoring and site closure using current technology, enacted laws and regulations, experience gained at similar sites, and an assessment of the probable level of involvement and financial condition of other potentially responsible parties.  Unless there is a better estimate within this range of possible costs, the Utility records the costs at the lower end of this range.  It is reasonably possible that a change in these estimates may occur in the near term due to uncertainty concerning the Utility's responsibility, the complexity of environmental laws and regulations, and the selection of compliance alternatives.  The Utility estimates the upper end of the cost range using reasonably possible outcomes least favorable to the Utility.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility had an undiscounted environmental remediation liability of approximately $408 million at March 31, 2005, and approximately $327 million at December 31, 2004.  During the three months ended March 31, 2005, the liability increased by approximately $81 million mainly due to reassessment of the estimated cost of remediation and remediation payments.  The approximately $408 million accrued at March 31, 2005, includes approximately $101 million related to the pre-closing remediation liability associated with divested generation facilities and approximately $307 million related to remediation costs for those generation facilities that the Utility still owns, gas gathering sites, compressor stations, third-party disposal sites, and manufactured gas plant sites that either are owned by the Utility or are the subject of remediation orders by environmental agencies or claims by the current owners of the former manufactured gas plant sites.  Of the approximately $408 million environmental remediation liability, approximately $143 million has been included in prior rate setting proceedings and the Utility expects that approximately $198 million will be allowable for inclusion in future rates.  The Utility also recovers its costs from insurance carriers and from other third parties whenever possible.  Any amounts collected in excess of the Utility's ultimate obligations may be subject to refund to customers.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's undiscounted future costs could increase to as much as $571 million if the other potentially responsible parties are not financially able to contribute to these costs, or if the extent of contamination or necessary remediation is greater than anticipated.  The amount of approximately $571 million does not include an estimate for the cost of remediation at known sites owned or operated in the past by the Utility's predecessor corporations for which the Utility has not been able to determine whether a liability exists.</P>
<P ALIGN="JUSTIFY"></P>
<B><P>Taxation Matters</P>

</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Internal Revenue Service, or IRS, has completed its audit of PG&amp;E Corporation's 1997 and 1998 consolidated federal income tax returns and has assessed additional federal income taxes of approximately $81 million (including interest).  PG&amp;E Corporation has filed protests contesting certain adjustments made by the IRS in that audit and currently is discussing these adjustments with the IRS' Appeals Office.  PG&amp;E Corporation does not expect final resolution of these appeals to have a material impact on its financial position or results of operations.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the fourth quarter of 2003, PG&amp;E Corporation made an advance payment to the IRS of $75 million relating to the 1999 and 2000 audit.  The IRS completed its audit of PG&amp;E Corporation's 1999 and 2000 consolidated federal income tax returns during the third quarter of 2004.  As a result of the completion of this audit, PG&amp;E Corporation received a refund from the IRS of $14 million in January of 2005.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The IRS is auditing PG&amp;E Corporation's 2001 and 2002 consolidated federal income tax returns.  They have indicated that they plan to complete their audit and issue a Revenue Agent Report in the second or third quarter of 2005.  During their examination, the IRS has issued several proposed adjustments that PG&amp;E Corporation is currently disputing.  The IRS adjustments include disallowance of synthetic fuel credits claimed on these tax returns.  In addition, the IRS has proposed to disallow a number of deductions, the largest of which is abandonment losses/worthless deductions claimed on the 2002 tax return related to certain NEGT assets.  These assets were ultimately transferred to NEGT lenders in the third quarter of 2004.  If the IRS includes all of its proposed adjustments in the final Revenue Agent Report, the alleged tax deficiency would approximate $400 million.  Of this deficiency, approximately $104 million relates to the synthetic fuel credits.  The remaining $296 million is timing in nature and would reverse in future periods, generally in tax years 2003-2004.  PG&amp;E Corporation believes that it properly reported these transactions in its tax returns and will contest any IRS assessment.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation has accrued $52 million associated with NEGT related tax liabilities.  In addition, PG&amp;E Corporation has accrued a $49 million liability to cover potential tax obligations relating to non-NEGT issues on outstanding tax audits.  The Utility has accrued $63 million to cover potential tax obligations for outstanding tax audits.  Considering these reserves, PG&amp;E Corporation does not expect the resolution of these matters to have a material impact on its financial position or results of operations.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, based on preliminary information provided by NEGT, PG&amp;E Corporation anticipates paying approximately $86 million of federal income taxes on NEGT activities through the effective date of NEGT's plan of reorganization.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All IRS audits of PG&amp;E Corporation's federal income tax returns prior to 1997 have been closed.</P>
<P ALIGN="JUSTIFY"></P>
<B><P ALIGN="JUSTIFY">Legal Matters</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the normal course of business, PG&amp;E Corporation and the Utility are named as parties in a number of claims and lawsuits.  The most significant of these are discussed below.  On the Effective Date, the automatic stay of pending litigation was lifted, so that any state court lawsuits pending before the Utility's Chapter 11 filing that had not yet received relief from the stay can proceed.  </P>
<B><P ALIGN="JUSTIFY"></P>
<I><P ALIGN="JUSTIFY">Chromium Litigation</I> </P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are 14 civil suits pending against the Utility in several California state courts in which plaintiffs allege that exposure to chromium at or near the Utility's compressor stations at Hinkley and Kettleman, California, and the area of California near Topock, Arizona, caused personal injuries, wrongful deaths, or other injury and seek related damages.  One of these suits also names PG&amp;E Corporation as a defendant.  Currently, there are approximately 1,200 plaintiffs in the chromium litigation cases.  Approximately 1,260 individuals filed proofs of claims in the Utility's Chapter 11 case, most of whom also are plaintiffs in the chromium litigation cases.  Approximately 1,035 of these claimants filed claims requesting an approximate aggregate amount of $580 million and approximately another 225 claimants filed claims for an "unknown amount."  Pursuant to the Utility's plan of reorganization, these claims have passed through the Utility's Chapter 11 proceeding unimpaired.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility is responding to the suits in which it has been served and is asserting affirmative defenses.  The Utility will pursue appropriate legal defenses, including statute of limitations, exclusivity of workers' compensation laws, and factual defenses, including lack of exposure to chromium and the inability of chromium to cause certain of the illnesses alleged.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To assist in managing and resolving litigation with this many plaintiffs, the parties agreed to select plaintiffs from three of the cases for a test trial.  Plaintiffs' counsel selected ten of these initial trial plaintiffs, defense counsel selected seven of the initial trial plaintiffs, and one plaintiff and two alternates were selected at random.  The Utility has filed 14 motions challenging the test trial plaintiffs' lack of admissible scientific evidence that chromium caused the alleged injuries.  The Superior Court for the County of Los Angeles, or Superior Court, began hearing argument on two of these motions in February 2004.  In February 2005, the Superior Court denied these two motions for summary judgment.  The Utility has filed motions for reconsideration of these orders with the Superior Court and also filed a request with the appellate court seeking to overturn or modify the orders because they are inconsistent with recent California appellate decisions concerning the admissibility of expert testimony and the requirements for proving medical causation.  After the motions for reconsideration and the request were filed, the California Supreme Court granted review of one of these recent appellate decisions.  On April 26, 2005, the Superior Court heard argument on the motions for reconsideration, but has not yet issued a decision.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility has recorded a $160 million reserve in its financial statements with respect to the chromium litigation.  PG&amp;E Corporation and the Utility believe that, after taking into account the reserves recorded at March 31, 2005, the ultimate outcome of this matter will not have a material adverse impact on PG&amp;E Corporation's or the Utility's financial condition or future results of operations.</P>

<B><P ALIGN="JUSTIFY">Recorded Liability for Legal Matters </P>
<P ALIGN="JUSTIFY"></P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with SFAS No.&nbsp;5, "Accounting for Contingencies," PG&amp;E Corporation and the Utility make a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.  These provisions are reviewed quarterly and adjusted to reflect the impacts of negotiations, settlements and payments, rulings, advice of legal counsel and other information and events pertaining to a particular case.  In assessing such contingencies, PG&amp;E Corporation's and the Utility's policy is to exclude anticipated legal costs.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The liability for legal matters is included in PG&amp;E Corporation's and the Utility's other noncurrent liabilities in the Consolidated Balance Sheets, and totaled approximately $198 million at March 31, 2005 and $200 million at December&nbsp;31, 2004.  Based on current information, PG&amp;E Corporation and the Utility do not believe that it is probable that losses associated with legal matters that exceed amounts already recognized will be incurred in amounts that would be material to PG&amp;E Corporation's or the Utility's financial position or results of operations.</P>
<B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><A NAME="note_8"></A>NOTE 8:  SUBSEQUENT EVENTS</P>
<P ALIGN="JUSTIFY"></P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April 20, 2005, the Utility's Board of Directors authorized the redemption of all of the outstanding shares of the Utility's 6.57% Redeemable First Preferred Stock and 6.30% Redeemable First Preferred Stock totaling approximately $120 million aggregate par value.  Both issues will be redeemed on May 31, 2005.  In addition to the $25 per share redemption price, holders of the 6.57% Redeemable First Preferred Stock and the 6.30% Redeemable First Preferred Stock will be entitled to receive an amount equal to all accumulated and unpaid dividends on such shares to and including May 31, 2005. </P>
<B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="CENTER"><A NAME="item_2_management"></A>ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND<BR>
RESULTS OF OPERATIONS<BR>
</P>
<P ALIGN="JUSTIFY"><A NAME="_OVERVIEW__[Corp."></A>OVERVIEW  </P>
</B><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation, incorporated in California in 1995, is an energy-based holding company that conducts its business principally through Pacific Gas and Electric Company, or the Utility, a public utility operating in northern and central California.  The Utility engages primarily in the businesses of electricity and natural gas distribution, electricity generation, electricity transmission, and natural gas procurement, transportation and storage.  PG&amp;E Corporation became the holding company of the Utility and its subsidiaries on January 1, 1997.  The Utility, incorporated in California in 1905, is the predecessor of PG&amp;E Corporation.  Both PG&amp;E Corporation and the Utility are headquartered in San Francisco, California.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This is a combined quarterly report of PG&amp;E Corporation and the Utility and includes separate Condensed Consolidated Financial Statements for each of these two entities.  PG&amp;E Corporation's Condensed Consolidated Financial Statements include the accounts of PG&amp;E Corporation, the Utility and other wholly owned and controlled subsidiaries.  The Utility's Condensed Consolidated Financial Statements include the accounts of the Utility and its wholly owned and controlled subsidiaries and a variable interest entity for which it is subject to a majority of the risk of loss or entitled to receive a majority of the entity's residual returns.  This combined Management's Discussion and Analysis of Financial Condition and Results of Operations, or MD&amp;A, of PG&amp;E Corporation and the Utility should be read in conjunction with these Condensed Consolidated Financial Statements and Notes to the Condensed Consolidated Financial Statements, as well as the MD&amp;A, Consolidated Financial Statements and Notes to the Consolidated Financial Statements included in their combined 2004 Annual Report on Form 10-K, or 2004 Annual Report, filed with the Securities and Exchange Commission, or SEC.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility served approximately 5.0 million electricity distribution customers and approximately 4.1 million natural gas distribution customers at March 31, 2005.  The Utility had approximately $34.1 billion in assets at March 31, 2005 and generated revenues of approximately $2.7 billion in the three months ended March 31, 2005.  Its revenues are generated mainly through the sale and delivery of electricity and natural gas at regulated rates.  The Utility is regulated primarily by the California Public Utilities Commission, or the CPUC, and the Federal Energy Regulatory Commission, or the FERC.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the first quarter 2005, the Utility continued to build momentum to implement its strategy to achieve cost and operating efficiencies and operational excellence.  The Utility is in the process of identifying specific initiatives to provide better, faster and more cost-effective service to its customers and invest the savings in the business.</P>

<B><P ALIGN="JUSTIFY">Factors Affecting First Quarter 2005 Results of Operation and Financial Condition</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the first quarter 2005, several factors had a significant impact on PG&amp;E Corporation's and the Utility's results of operation and financial condition, including: </P>
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<FONT SIZE=2><P>The issuance of approximately $1.9 billion of Energy Recovery Bonds, or ERBs, as described below;</FONT></TD>
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<FONT SIZE=2><P>Achievement of a 52% equity ratio on which the Utility is entitled to earn its authorized return;</FONT></TD>
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<FONT SIZE=2><P>The reinstatement of quarterly dividends, repayment of debt, and the repurchase of common stock; and</FONT></TD>
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<FONT SIZE=2><P>Upgraded credit ratings.</FONT></TD>
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<B><FONT SIZE=2><P>Issuance of Energy Recovery Bonds</P>
</B><I>
</I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code, or Chapter 11, incorporated the terms of the Settlement Agreement approved by the CPUC on December 18, 2003, and entered into among the CPUC, the Utility, and PG&amp;E Corporation on December 19, 2003, to resolve the Utility's Chapter 11 proceeding, or the Settlement Agreement.  In connection with the Settlement Agreement, PG&amp;E Corporation and the Utility agreed to seek to refinance the remaining unamortized balance of the $2.2 billion, after-tax ($3.7 billion, pre-tax) regulatory asset provided under the Settlement Agreement, or the Settlement Regulatory Asset, and related federal income and state franchise taxes, in an aggregate principal amount of up to $3.0 billion in two separate series up to one year apart, to be secured by a dedicated rate component, or DRC, to be collected from electricity customers as a nonbypassable charge.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February 10, 2005, PG&amp;E Energy Recovery Funding LLC, or PERF, a limited liability company that is wholly owned and consolidated by the Utility (but legally separate from the Utility), issued approximately $1.9 billion of ERBs.  The Utility, as servicer, collects and remits DRC charges to PERF to enable PERF to pay the principal and interest on the ERBs.  The proceeds of the ERBs were used by the Utility to refinance the remaining unamortized after-tax balance of the Settlement Regulatory Asset as follows:</P>
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<FONT SIZE=2><P>The repayment of $300 million borrowed by the Utility in December 2004, in anticipation of the receipt of ERB proceeds, under the Utility's $850 million working capital facility to partially redeem Floating Rate First Mortgage Bonds on January 3, 2005 in the aggregate principal amount of $300 million; </P>
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<FONT SIZE=2><P>The defeasance of $600 million of Floating Rate First Mortgage Bonds on February 24, 2005 followed by a redemption of the defeased bonds on April 3, 2005; and  </P>
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<FONT SIZE=2><P>The repurchase of 22,023,283 shares of the Utility's common stock at $43.59 per share from PG&amp;E Corporation for an aggregate purchase price of $960 million.</P>
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</TABLE>
</CENTER></P>

<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the Settlement Agreement, the Utility is authorized to earn a rate of return on equity, or ROE, of no less than 11.22% per year on the equity component of its rate base, including the Settlement Regulatory Asset.  The Settlement Regulatory Asset was eliminated from rate base when it was refinanced with the proceeds of the issuance of the ERBs.  Therefore the Utility no longer earns an 11.22% ROE on the Settlement Regulatory Asset.  As a result, the Utility's first quarter 2005 net income was reduced by approximately $18 million, compared to the same period in 2004, when the Utility earned the 11.22% ROE on the Settlement Regulatory Asset.  Net income for 2005 is estimated to be reduced by approximately $100 million, compared to 2004, due to the elimination of the 11.22% ROE on the Settlement Regulatory Asset.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The proceeds of the second series of ERBs, anticipated to be issued in November 2005 in an aggregate amount of up to $1.1 billion, will be paid by PERF to the Utility to pre-fund the Utility's recovery through rates of the tax payments that will be due as the Utility collects the DRC over the term of the first series of ERBs to pay principal.  Until taxes are fully paid, the Utility will compensate customers, computed at the Utility's authorized rate of return on rate base, for the use of the proceeds.  It is estimated that this carrying cost credit associated with the second series of ERBs would be approximately $60 million (based on an approximate aggregate amount of $1 billion) for the first full year that the second series of ERBs is outstanding.  The actual amount will depend on the principal amount of the second series of ERBs.  The carrying cost credit and the resulting reduction to net income will decline as the taxes are paid, reaching zero in 2012 when the ERBs and related taxes are paid in full.</P>
<B><P>Achievement of 52% Equity Ratio</P>

</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Settlement Agreement provides that the CPUC will set the Utility's capital structure and authorized ROE in the Utility's annual cost of capital proceedings in its usual manner; provided that, the authorized ROE shall not be less than 11.22% per year and the authorized equity ratio for ratemaking purposes shall not be less than 52%.  In January 2005, the equity component of the Utility's capital structure grew to 52%, as compared to about 48% during the first quarter of 2004.  As a result, the Utility's equity earnings in the three months ended March 31, 2005, increased by approximately $14 million compared to the same period in 2004.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the Settlement Agreement, the Utility is entitled to earn a ROE of 11.22% on an authorized 52% equity ratio until the Utility's long-term issuer credit ratings are at least A- from Standard &amp; Poor's Ratings Services (S&amp;P) or A3 from Moody's Investors Service (Moody's).  As described below, on February 16, 2005, S&amp;P announced that it had upgraded its corporate credit rating on the Utility to BBB from BBB- and on March 3, 2005, Moody's announced that it had upgraded the Utility's issuer credit rating to Baa1 from Baa3.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The currently authorized ROE of 11.22% will be in effect until the Utility's 2006 cost of capital application is approved by the CPUC.  The Utility plans to file its 2006 cost of capital application with the CPUC on May 9, 2005 for its electric utility generation and distribution operations and gas distribution operations.</P>
<B>
<P>Stock Repurchases and Dividends</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With the achievement of a 52% equity ratio, the Utility reinstated the payment of a regular quarterly dividend.  In addition, during the three months ended March 31, 2005, the Utility used cash (including the ERB proceeds) in excess of amounts needed for operations, debt service and repayment, base capital expenditures, and the quarterly dividend, to repurchase common stock.  In turn, PG&amp;E Corporation used the cash received from the Utility in the form of dividends and share repurchases to recommence the payment of a regular quarterly dividend and repurchase common stock from shareholders.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March 4, 2005, PG&amp;E Corporation entered into a new accelerated share repurchase arrangement with Goldman Sachs &amp; Co., or GS&amp;Co, under which PG&amp;E Corporation repurchased 29,489,400 shares of its common stock for an aggregate amount of approximately $1.05 billion, subject to a price adjustment based on the daily volume weighted average market price of PG&amp;E Corporation common stock over the term of the arrangement.  The repurchase of common stock under this agreement, increased both basic and diluted earnings per share by approximately $0.01 for the three months ended March 31, 2005 and partially offset the negative earnings impact of the refinancing of the Settlement Regulatory Asset as described above.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Weighted average shares outstanding for basic and diluted earnings per share for the three months ended March 31, 2005 reflect the March 4, 2005 retirement of shares repurchased under the accelerated share repurchase arrangement.  At March 31, 2005, PG&amp;E Corporation does not have any obligation to GS&amp;Co. related to the price adjustment or any additional payments.  Accordingly, no additional shares attributable to the accelerated share repurchase arrangement were treated as outstanding for purposes of calculating diluted earnings per share (see "Liquidity and Financial Resources" below).</P>

<B><P>Credit Rating Upgrades</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February 16, 2005, S&amp;P announced that it had upgraded the Utility's corporate credit rating to BBB from BBB-.  On March 3, 2005, Moody's announced that it had upgraded the Utility's issuer credit rating to Baa1 from Baa3 and upgraded its rating on the Utility's outstanding preferred stock to Baa3 from Ba2.  Moody's also assigned a Baa3 issuer rating to PG&amp;E Corporation and a rating of Baa3 to PG&amp;E Corporation's $200 million unsecured bank revolving credit facility.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April 22, 2005, the lien of the mortgage securing the Utility's First Mortgage Bonds was released after satisfaction of several conditions, and following confirmation from S&amp;P and Moody's that the First Mortgage Bonds (now referred to as Senior Notes) would have unsecured long-term debt ratings of BBB by S&amp;P and Baa1 by Moody's after the lien was released. </P>

<B><P ALIGN="JUSTIFY">Forward-Looking Statements  </P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This combined Quarterly Report on Form 10-Q, including the Management's Discussion and Analysis of Financial Condition and Results of Operations, or the MD&amp;A, contains forward-looking statements that are necessarily subject to various risks and uncertainties the realization or resolution of which are outside of management's control.  These statements are based on current expectations and projections about future events, and assumptions regarding these events and management's knowledge of facts at the time the statements were made.  These forward-looking statements are identified by words such as "assume," "expect," "intend," "plan," "project," "believe," "estimate," "predict," "anticipate," "may," "might," "will," "should," "would," "could," "goal," "potential" and similar expressions.  Although PG&amp;E Corporation and the Utility are not able to predict all the factors that may affect future results, some of the factors that could cause future results to differ materially from those expressed or implied by the forward-looking statements, or from historical results, include:</P>

<B><P ALIGN="JUSTIFY">Appeals of the Utility's Plan of Reorganization and Settlement Agreement</P>
</B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=561>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>The timing and resolution of the petitions for review that were filed in the California Court of Appeal for the First Appellate District, seeking review of the CPUC's approval of the Settlement Agreement; and</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>The timing and resolution of the pending appeals of the confirmation order.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<B><P ALIGN="JUSTIFY">Operating Environment</P>
</B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=561>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Unanticipated changes in operating expenses or capital expenditures, which may affect the Utility's ability to earn its authorized rate of return;</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><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></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Weather, storms, earthquakes, fires, floods, other natural disasters, explosions, accidents, mechanical breakdowns and other events or hazards that affect demand, result in power outages, reduce generating output, or cause damage to the Utility's assets or operations or those of third parties on which the Utility relies, and the extent to which the Utility is able to timely recover costs related to such events;</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Unanticipated population growth or decline, changes in market demand and demographic patterns, and general economic and financial market conditions, including unanticipated changes in interest or inflation rates, and the extent to which the Utility is able to timely recover its costs in the face of such events;</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>The operation of the Utility's Diablo Canyon nuclear power plant, or Diablo Canyon, which exposes the Utility to potentially significant environmental costs 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, and the extent to which the Utility is able to timely recover related costs and expenses;</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Actions of credit rating agencies;</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Significant changes in the Utility's relationship with its employees, the availability of qualified personnel and the potential adverse effects if labor disputes were to occur; and</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Acts of terrorism.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<B><P ALIGN="JUSTIFY">Legislative and Regulatory Environment and Pending Litigation </P>
</B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=561>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><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></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Whether the assumptions and forecasts underlying the Utility's CPUC-approved long-term electricity procurement plan prove to be accurate, the terms and conditions of the generation or procurement commitments the Utility enters into in connection with its plan, the extent to which the Utility is able to recover the costs it incurs in connection with these commitments and the extent to which a failure to perform by any of the counterparties to the Utility's electricity purchase contracts or the California Department of Water Resources, or DWR, contracts allocated to the Utility's customers affects the Utility's ability to meet its obligations or to recover its costs;</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Prevailing governmental policies and legislative or regulatory actions generally, including those of the California legislature, the U.S. Congress, the CPUC, the FERC, and the Nuclear Regulatory Commission, or the NRC, with regard to the Utility's allowed rates of return, industry and rate structure, recovery of investments and costs, acquisitions and disposal of assets and facilities, treatment of affiliate contracts and relationships, and operation and construction of facilities;</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>The extent to which the CPUC or the FERC delays or denies recovery of the Utility's costs, including electricity purchase 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></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><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 the California investor-owned electric utilities;</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=51>
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP" HEIGHT=51>
<FONT SIZE=2><P>The terms and conditions under which the CPUC authorizes the Utility to issue debt and equity in the future, and the extent to which the terms and conditions limit the Utility's ability to issue debt in the future;</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Whether the Utility is determined to be in compliance with all applicable rules, tariffs and orders relating to electricity and natural gas utility operations, and the extent to which a finding of non-compliance could result in customer refunds, penalties or other non-recoverable expenses;</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Whether the Utility is required to incur material costs or capital expenditures or curtail or cease operations at affected facilities to comply with existing and future environmental laws, regulations and policies; and</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=24>
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP" HEIGHT=24>
<FONT SIZE=2><P>The outcome of pending litigation.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2><P ALIGN="JUSTIFY">Competition and Bypass</P>
</B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=561>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Increased competition as a result of the takeover by condemnation of the Utility's distribution assets, duplication of the Utility's distribution assets or service by local public utilities, and other forms of competition that may result in stranded investment capital, decreased customer growth, loss of customer load and additional barriers to cost recovery; and</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=89>
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP" HEIGHT=89>
<FONT SIZE=2><P>The extent to which the Utility's distribution customers switch between purchasing electricity from the Utility and from alternate energy service providers as direct access customers, the extent to which cities, counties and others in the Utility's service territory begin directly serving the Utility's customers, and the extent to which the Utility's customers become self-generators, results in stranded generating asset costs and non-recoverable procurement costs.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See the section entitled "Risk Factors" in PG&amp;E Corporation's and the Utility's combined 2004 Annual Report for further discussion of the more significant risks that could affect the outcome of these forward-looking statements and PG&amp;E Corporation's and the Utility's future results of operations and financial condition. </P>

<P>&nbsp;</P>
<B><P><A NAME="_RESULTS_OF_OPERATIONS"></A></P>
<P><A NAME="results_of_operations"></A>RESULTS OF OPERATIONS</P>

</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below details certain items from the accompanying Consolidated Statements of Income for the three-month period ended March 31, 2005 and 2004.  </P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=1 WIDTH=556>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<B><FONT SIZE=2><P>Utility</B></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Electric operating revenues </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,660&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,791&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>Natural gas operating revenues</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,009&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">931&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Total operating revenues</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,669&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,722&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>Cost of electricity</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">396&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">561&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Cost of natural gas</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">620&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">578&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>Operating and maintenance</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">773&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">808&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Recognition of regulatory assets</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(4,900)</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>Depreciation, amortization and decommissioning</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">385&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">311&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Reorganization professional fees and expenses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Total operating (gain) expenses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,174&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(2,640)</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Operating income </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">495&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">5,362&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>Interest income <SUP>(1)</SUP></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">20&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">11&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Interest expense</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(154)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(213)</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>Other income, net <SUP>(2)</SUP></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">5&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Income before income taxes</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">361&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">5,165&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>Income tax provision</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">142&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,099&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Income available for common stock</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">219&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">3,066&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<B><FONT SIZE=2><P>PG&amp;E Corporation, Eliminations and Other </B><SUP>(3)</SUP></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>Operating revenues </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Operating expenses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(6)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">9&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>Operating income (loss)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">6&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(9)</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Interest income</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">3&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>Interest expense</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(7)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(18)</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Other income (expense), net <SUP>(2)</SUP></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(1)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(32)</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>Income (loss) before income taxes</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(1)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(56)</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Income tax benefit</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(23)</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>Net loss </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(1)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(33)</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="JUSTIFY">Consolidated Total </B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Operating revenues </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,669&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,722&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>Operating (gain) expenses</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,168&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(2,631)</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Operating income </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">501&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">5,353&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>Interest income <SUP>(1)</SUP></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">21&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">14&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Interest expense</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(161)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(231)</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>Other expenses, net <SUP>(2)</SUP></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(1)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(27)&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Income before income taxes</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">360&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">5,109&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>Income tax provision </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">142&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,076&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Net income </FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">218&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">3,033&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="95%" VALIGN="MIDDLE" COLSPAN=7 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="44%" VALIGN="MIDDLE" COLSPAN=6 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="95%" VALIGN="MIDDLE" COLSPAN=7 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" HEIGHT=22>
<SUP><FONT SIZE=1><P ALIGN="JUSTIFY">(1)</SUP></FONT></TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=7 HEIGHT=22>
<FONT SIZE=1><P>Includes reorganization interest income.</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" HEIGHT=22>
<SUP><FONT SIZE=1><P ALIGN="JUSTIFY">(2)</SUP></FONT></TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=7 HEIGHT=22>
<FONT SIZE=1><P>Includes preferred dividend requirement as other expense.</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP" HEIGHT=22>
<SUP><FONT SIZE=1><P ALIGN="JUSTIFY">(3)</SUP></FONT></TD>
<TD WIDTH="95%" VALIGN="TOP" COLSPAN=7 HEIGHT=22>
<FONT SIZE=1><P>PG&amp;E Corporation eliminates all intercompany transactions in consolidation.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2>
<P>&nbsp;</P>
<P>Utility </P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under cost of service ratemaking, the Utility's rates are determined based on its costs of service and are adjusted periodically to reflect changes in sales or demand compared to forecasted sales or demand used in setting rates.  The Utility's electricity and natural gas distribution rates reflect the sum of individual revenue requirement components.  Changes in any individual revenue requirement affect customers' rates and could affect the Utility's revenues.  Pending regulatory proceedings that could result in rate changes and affect the Utility's revenues are discussed in PG&amp;E Corporation's and the Utility's combined 2004 Annual Report and below under "Regulatory Matters."</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility currently faces price and volumetric risk for the portion of intrastate natural gas transportation capacity that is not contracted under fixed reservation charges used by core customers (see further discussion in the Transportation and Storage section under Risk Management Activities of this Management's Discussion and Analysis).  The Utility is also at risk for costs associated with meeting demand and maintaining electric transmission system sufficiency and reliability in the Utility's service area in excess of amounts allowed in its FERC-authorized transmission owner rates.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenues collected on behalf of the DWR and the DWR's related costs are not included in the Utility's Consolidated Statements of Operations, reflecting the Utility's role as a billing and collection agent for the DWR's sales to the Utility's customers.</P>

<B><I><P ALIGN="JUSTIFY">Electric Operating Revenues  </P>
<P ALIGN="JUSTIFY"></P>
</B></I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility records its electric distribution and generation revenues under cost-of-service revenue requirements approved by the CPUC in the Utility's 2003 General Rate Case, or GRC.  Differences between the authorized revenue requirements and amounts collected by the Utility from customers in rates are tracked in regulatory balancing accounts and are reflected in miscellaneous revenues in the table below.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility is required to dispatch, or schedule, all of the electricity resources within its portfolio, including electricity provided under the DWR allocated contracts, in the most cost-effective way.  This requirement, in certain cases, requires the Utility to schedule more electricity than is necessary to meet its retail load and to sell this additional electricity on the open market.  The Utility typically schedules excess electricity when the expected sales proceeds exceed the variable costs to operate a generation facility or buy electricity under an optional contract.  Proceeds from the sale of surplus electricity are allocated between the Utility and the DWR based on the percentage of volume supplied by each entity to the Utility's total load.  The Utility's net proceeds from the sale of surplus electricity after deducting the portion allocated to the DWR are recorded as a reduction to the cost of electricity.</P>
<P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows a breakdown of the Utility's electric operating revenues.</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=480>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="33%" VALIGN="BOTTOM" COLSPAN=7>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="33%" VALIGN="BOTTOM" COLSPAN=7>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" COLSPAN=7 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Electric revenues</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,084&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,169&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=14>
<FONT SIZE=2><P>DWR pass-through revenue</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(446)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(470)</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Subtotal</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,638&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,699&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=14>
<FONT SIZE=2><P>Miscellaneous</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">22&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">92&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#c0c0c0" HEIGHT=14>
<B><FONT SIZE=2><P>&nbsp;&nbsp;Total electric operating revenues</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,660&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,791&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=14>
<FONT SIZE=2><P>Total electricity sales (in Gwh) <SUP>(1)</SUP></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">19,034&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">18,870&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" HEIGHT=14>
<SUP><FONT SIZE=1><P>(1)</SUP></FONT></TD>
<TD WIDTH="98%" VALIGN="TOP" COLSPAN=12 HEIGHT=14>
<FONT SIZE=1><P>Includes DWR electricity sales.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's electric operating revenues decreased during the three months ended March 31, 2005, by approximately $131 million, or 7%, compared to the same period in 2004, primarily as a result of the following factors:</P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=561>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Electric revenues decreased approximately $175 million during the three months ended March 31, 2005, as compared to the same period in 2004 due to lower electricity procurement and transmission costs which are passed through to customers; and</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=97>
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP" HEIGHT=97>
<FONT SIZE=2><P>Electric operating revenues decreased $76 million as a result of a decrease in the revenue requirement associated with the Settlement Regulatory Asset.  As a result of the refinancing of the Settlement Regulatory Asset on February 10, 2005 through issuance of the ERBs, the Utility was no longer authorized to collect this revenue requirement (see further discussion in the Overview to this MD&amp;A and Note 4 of the Notes to the Condensed Consolidated Financial Statements);</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The above decreases were partially offset by the following increases to electric operating revenues:</P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=561>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=81>
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP" HEIGHT=81>
<FONT SIZE=2><P>The Utility is authorized to collect and remit a DRC from its electricity customers to repay the ERBs until they are fully retired.  This DRC charge resulted in an approximately $23 million electric operating revenue increase in the three months ended March 31, 2005, with no similar amount in the same period in 2004; and</P>
</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=81>
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP" HEIGHT=81>
<FONT SIZE=2><P>The approval of the Utility's 2003 GRC in May 2004 and the final decision in the 2005 cost of capital proceeding in December 2004 resulted in an increase of approximately $105 million in electric operating revenues in the three months ended March 31, 2005, as compared to the same period in 2004.  </FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><I><FONT SIZE=2><P>Cost of Electricity  </P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's cost of electricity includes electricity purchase costs and the cost of fuel used by its owned generation facilities, but it excludes costs to operate its owned generation facilities, which are included in operating and maintenance expense.  Electricity purchase costs and the cost of fuel used by owned generation facilities are passed through in rates to customers.  The following table shows a breakdown of the Utility's cost of electricity and the total amount and average cost of purchased power, excluding in each case both the cost and volume of electricity provided by the DWR to the Utility's customers: </P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=540>
<TR><TD WIDTH="56%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="29%" VALIGN="BOTTOM" COLSPAN=5>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="29%" VALIGN="BOTTOM" COLSPAN=5>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="29%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="JUSTIFY">(in millions)</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="JUSTIFY">Cost of purchased power</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">452&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">582&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="JUSTIFY">Proceeds from surplus sales allocated to the Utility</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(100)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(64)</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="JUSTIFY">Fuel used in own generation</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">44&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">43&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp;<B>Total net cost of electricity</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">396&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">561&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Average cost of purchased power per kWh</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">0.065&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">0.083&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="JUSTIFY">Total purchased power (GWh)</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">6,985&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">6,997&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the three months ended March 31, 2005, the Utility's cost of electricity decreased approximately $165 million, or 29%, compared to 2004, mainly due to the following factors:</P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=561>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>The decrease in the average cost of purchased power of $0.018 per kWh in 2005 as compared to 2004 resulted in a decrease of approximately $130 million in the cost of purchased power; and</P>
</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>The increase in proceeds from surplus sales allocated to the Utility of $36 million in the three months ended March 31, 2005, as compared to the same period in 2004 resulted in a corresponding decrease in the cost of electricity.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<B><I><P>Natural Gas Operating Revenues  </P>
</B></I>
<B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>The Utility sells natural gas and provides natural gas transportation services to its customers.  The Utility's natural gas customers consist of two categories: core and noncore customers.  The core customer class is comprised mainly of residential and smaller commercial natural gas customers.  The noncore customer class is comprised of industrial and larger commercial natural gas customers.  The Utility provides natural gas delivery services to all core and noncore customers connected to the Utility's system in its service territory.  Core customers can purchase natural gas from alternate energy service providers or can elect to have the Utility provide both delivery service and natural gas supply.  While the Utility provides non-core customers with delivery service, it does not provide non-core customers with natural gas supply.  When the Utility provides both supply and delivery, the Utility refers to the service as natural gas bundled service.  In 2004, core customers represented over 99% of the Utility's total customers and approximately 35% of its total natural gas deliveries, while noncore customers comprised less than 1% of the Utility's total customers and approximately 65% of its total natural gas deliveries.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's transportation system transports gas throughout California to the Utility's distribution system, which, in turn, delivers gas to end-use customers.  Utility transportation and distribution services for all customers have historically been bundled or sold together at a combined rate.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows a breakdown of the Utility's natural gas operating revenues: </P>
<P> </P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=510>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="26%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="26%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="26%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="JUSTIFY">(in millions)</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Bundled natural gas revenues</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">944&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">867&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>Transportation service-only revenues</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">65&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">64&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;<B>Total natural gas operating revenues</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,009&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">931&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>Average bundled revenue per Mcf of natural gas sold </FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">8.77&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">7.74&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Total bundled natural gas sales (in millions of Mcf)</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">108&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">112&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>The Utility's natural gas operating revenues increased approximately $78 million, or 8%, during the three months ended March 31, 2005, compared to the same period in 2004.  The increase in natural gas operating revenues was primarily due to the following factors:</P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=561>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Bundled natural gas revenues (excluding the effects of the 2003 GRC decision discussed below) increased by approximately $57 million, or 7%, in the three months ended March 31, 2005, as compared to the same period in 2004, mainly resulting from a higher cost of natural gas which the Utility is permitted by the CPUC to pass on to its customers through higher rates.  The average bundled revenue per thousand cubic feet, or Mcf, of natural gas sold in 2005 (excluding the effects of the GRC decision) increased by approximately $0.85, or 11%, as compared to 2004; and</P>
</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=56>
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP" HEIGHT=56>
<FONT SIZE=2><P>The approval of the 2003 GRC resulted in an increase to natural gas revenues of approximately $20 million in the three months ended March 31, 2005, as compared to the same period in 2004. </P>
</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><I><FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">Cost of Natural Gas</P>
</I><P ALIGN="JUSTIFY"></P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's cost of natural gas includes the purchase cost of natural gas and transportation costs on interstate pipelines, but excludes the costs associated with the Utility's intrastate pipeline, which are included in operating and maintenance expense.  The following table shows a breakdown of the Utility's cost of natural gas: </P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=540>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="24%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="24%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="24%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="JUSTIFY">(in millions)</B></FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="JUSTIFY">Cost of natural gas sold</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">584&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">542&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="JUSTIFY">Cost of natural gas transportation</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">36&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">36&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<B><FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp;Total cost of natural gas</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">620&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">578&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="JUSTIFY">Average cost per Mcf of natural gas sold </FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">5.41&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">4.84&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="JUSTIFY">Total natural gas sold (in millions of Mcf)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">108&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">112&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the three months ended March 31, 2005, the Utility's total cost of natural gas increased approximately $42 million, or 7%, compared to the same period in 2004 primarily due to an increase in the average market price of natural gas purchased of approximately $0.57 per Mcf. </P>
<P ALIGN="JUSTIFY"></P>
<B><I><P>Operating and Maintenance </P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating and maintenance expenses consist mainly of the Utility's costs to operate and maintain its electricity and natural gas facilities, customer accounts and service expenses, public purpose program expenses, and administrative and general expenses. </P>

<B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>During the three months ended March 31, 2005, the Utility's operating and maintenance expenses decreased by approximately $35 million, or 4%, compared to the same period in 2004, mainly due to the following factors:</P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=561>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Operating and maintenance expenses decreased approximately $30 million related to the various provisions of the Settlement Agreement, including obligations to invest in clean energy technology and the donation of land, in the first quarter of 2004 with no similar amounts for the same period in 2005;</P>
</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Operating and maintenance expenses decreased approximately $10 million at Diablo Canyon in the three months ended March 31, 2005, as compared to the same period in 2004 reflecting the scheduled refueling outage in the first quarter of 2004 with no similar refueling outage in the same period in 2005;</P>
</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Employee benefit plan-related expenses decreased approximately $20 million in the three months ended March 31, 2005, as compared to the same period in 2004, due to lower interest cost, higher than expected returns on trust assets and the impact of Diablo Canyon reapplying SFAS No. 71 in April 2004.  Prior to the reapplication of SFAS No. 71, Diablo Canyon's expenses impacted net income; there was no similar impact in the three months ended March 31, 2005.</P>
</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>These decreases were partially offset by an increase of approximately $30 million in the three months ended March 31, 2005, as compared to the same period in 2004, for environmental matters resulting from reassessments of the estimated liability for various sites.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><I><FONT SIZE=2>
<P>Recognition of Regulatory Assets  </P>

</B></I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times" SIZE=2>In light of the satisfaction of various conditions to the implementation of the Utility's plan of reorganization, the Utility recorded the regulatory assets provided for under the Settlement Agreement in the first quarter of 2004.  </FONT><FONT SIZE=2>This resulted in the recognition of a one-time non-cash, pre-tax gain of $3.7&nbsp;billion for the Settlement Regulatory Asset and $1.2&nbsp;billion for the Utility retained generation regulatory assets, for a total after-tax gain of $2.9&nbsp;billion</FONT><B> </P>
<I><FONT SIZE=2>
<P>Depreciation, Amortization and Decommissioning  </P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the three months ended March 31, 2005, the Utility's depreciation, amortization and decommissioning expenses increased by approximately $74 million, or 24%, compared to the same period in 2004, primarily as a result of the amortization of the Settlement Regulatory Asset and Energy Recovery Bond Regulatory Asset and an increase in the Utility's plant assets.</P>

<B><I><P>Interest Income  </P>

</B></I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the three months ended March 31, 2005, interest income, including reorganization interest income, increased by approximately $9&nbsp;million, or 82%, compared to the same period in 2004, primarily due to interest earned on the $1.7 billion disputed escrow cash account in the three months ended March 31, 2005, and higher average interest rates on the Utility's short-term investments in the three months ended March 31, 2005, compared to the same period in 2004.  The Utility discontinued reporting in accordance with SOP 90-7 upon its emergence from Chapter 11 on April 12, 2004.  Prior to that date, the Utility reported reorganization interest income separately on its Consolidated Statements of Income.  Reorganization interest income reported in 2004 mainly included interest earned on cash accumulated during the Utility's Chapter 11 proceedings. </P>

<B><I><P>Interest Expense  </P>

</B></I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the three months ended March 31, 2005, the Utility's interest expense decreased by approximately $59&nbsp;million, or 28%, compared to the same period in 2004, mainly due to a lower average amount of outstanding debt and a lower weighted average interest rate during the three months ended March 31, 2005, as compared to the same period in 2004.</P>
<P ALIGN="JUSTIFY"></P>
<B><I><P>Income Tax Expense  </P>

</B></I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times" SIZE=2>In the </FONT><FONT SIZE=2>three months ended March 31, 2005</FONT><FONT FACE="Times" SIZE=2>, the Utility's tax expense decreased approximately $2.0 billion, or 93%, compared to the same period 2004, mainly due to a decrease in pre-tax income of $4.8 billion for the </FONT><FONT SIZE=2>three months ended March 31, 2005</FONT><FONT FACE="Times" SIZE=2>.  This decrease is primarily the result of the recognition of regulatory assets associated with the Settlement Agreement for the first quarter of 2004, with no similar amount recognized in the same period in 2005.  The effective tax rate for the </FONT><FONT SIZE=2>three months ended March 31, 2005,</FONT><FONT FACE="Times" SIZE=2> decreased by 1.7 percentage points compared to the same period in 2004.  This decrease is due mainly to the effect of regulatory treatment of depreciation differences and state income taxes. </P>
</FONT><FONT SIZE=2>
<B><P ALIGN="JUSTIFY">PG&amp;E Corporation, Eliminations and Others </P>
</B><P ALIGN="JUSTIFY"></P>
<B><I><P>Operating Revenues and Expenses</P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation's revenues consist mainly of billings to the Utility and its other affiliates for services rendered, all of which are eliminated in consolidation.  PG&amp;E Corporation's operating expenses consist mainly of employee compensation and payments to third parties for goods and services.  Generally, PG&amp;E Corporation's operating expenses are allocated to affiliates.  These allocations are made without mark-up.  Operating expenses allocated to affiliates are eliminated in consolidation.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The decrease in operating expenses of approximately $15 million was primarily due to the receipt of insurance proceeds for legal costs and a reduction in general and administrative expenses retained at PG&amp;E Corporation in the first quarter 2005, compared to the same period in 2004.</P>

<B><I><P>Interest Expense</P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation's interest expense is not allocated to its affiliates.  In the three months ended March 31, 2005, PG&amp;E Corporation's interest expense decreased by approximately $11 million, or 61%, compared to the same period in 2004, due to a reduction in the amount of outstanding debt.  During the first quarter 2004, PG&amp;E Corporation incurred $11 million in interest expense related to its $600 million of 6&#8542;% Senior Secured Notes due 2008, which were redeemed on November 15, 2004.  Interest expense in the first quarter 2005 was primarily due to PG&amp;E Corporation's $280 million of 9.50% Convertible Subordinated Notes due 2010, or Convertible Subordinated Notes. </P>
<B><I>
<P>Other Income (Expense)</P>

</B></I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation's other expense decreased by approximately $31 million, or 97%, in the three months ended March 31, 2005, compared to the same period in 2004, primarily due to a reduction in the pre-tax charge to earnings, related to the $32 million change in market value of non-cumulative dividend participation rights included within PG&amp;E Corporation's Convertible Subordinated Notes in the first quarter of 2004.  The change in market value in 2005 was immaterial. </P>

<B><P ALIGN="JUSTIFY"><A NAME="liquidity_and_financial_resources"></A>LIQUIDITY AND FINANCIAL RESOURCES</P>
</B><P ALIGN="JUSTIFY"></P>
<B><P ALIGN="JUSTIFY">Overview</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The level of PG&amp;E Corporation's and the Utility's current assets and current liabilities is subject to fluctuation as a result of seasonal demand for electricity and natural gas, energy commodity costs, and the timing and effect of regulatory decisions and financings, among other factors.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With the achievement of a 52% equity ratio in January 2005, the Utility reinstated the payment of a regular quarterly dividend.  In addition, during the three months ended March 31, 2005, the Utility used cash (including the ERB proceeds) in excess of amounts needed for operations, debt service and repayment, base capital expenditures, and the payment of a quarterly dividend, to repurchase common stock.  In turn, PG&amp;E Corporation used the cash received from the Utility in the form of dividends and share repurchases to recommence the payment of a regular quarterly dividend and repurchase common stock from shareholders.  </P>

<B><P>Liquidity</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation and the Utility intend to retain sufficient cash for operating needs and to manage debt levels to maintain access to credit.  PG&amp;E Corporation and the Utility target cash balances, which, together with credit facilities, accommodate normal and unforeseen demands on its liquidity.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At March 31, 2005, PG&amp;E Corporation and its subsidiaries had consolidated cash and cash equivalents of approximately $1.4 billion, and restricted cash of approximately $1.9 billion.  PG&amp;E Corporation and the Utility maintain separate bank accounts.  At March 31, 2005, PG&amp;E Corporation on a stand-alone basis had cash and cash equivalents of approximately $319 million.  At March 31, 2005, the Utility had cash and cash equivalents of approximately $1.1 billion, and restricted cash of approximately $1.9 billion.  The Utility's restricted cash includes amounts deposited in escrow related to the remaining disputed Chapter 11 claims, collateral required by the ISO and deposits under certain third party agreements.</P>
<P>PG&amp;E Corporation and the Utility primarily invest their cash in money market funds and in short-term obligations of the U.S. Government and its agencies.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility seeks to maintain or strengthen its credit ratings to provide efficient access to financial and trade credit and to ensure adequate liquidity.  On February 16, 2005, S&amp;P, upgraded its corporate credit rating on the Utility to BBB from BBB- and affirmed its BBB senior secured rating on the Utility's First Mortgage Bonds.   S&amp;P has not assigned a rating to PG&amp;E Corporation.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March 3, 2005, Moody's announced that it had upgraded its corporate credit rating on the Utility to Baa1 from Baa3 and upgraded the Utility's other debt ratings as follows: </P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=551>
<TR><TD WIDTH="6%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="94%" VALIGN="TOP">
<FONT SIZE=2><P>First Mortgage Bonds, secured pollution control bonds, and secured bank loan agreement to Baa1 from Baa2;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="94%" VALIGN="TOP">
<FONT SIZE=2><P>Preferred stock to Baa3 from Ba2;</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="94%" VALIGN="TOP">
<FONT SIZE=2><P>Shelf registration for the issuance of First Mortgage Bonds to (P)Baa1 from (P)Baa2; and</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="94%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>The issuance of senior unsecured debt to (P)Baa1 from (P)Baa3.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Moody's also assigned a rating of Baa3 to PG&amp;E Corporation's $200 million unsecured bank revolving credit facility. Moody's stated that its rating outlook is stable for the Utility and PG&amp;E Corporation. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As discussed in Note 3 in the Notes to the Condensed Consolidated Financial Statements, on April 22, 2005, the lien of the indenture securing the First Mortgage Bonds was released following confirmation by Moody's and S&amp;P that the Utility's unsecured debt would be rated BBB by S&amp;P and Baa1 by Moody's after the release of the lien.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation and the Utility have taken advantage of recent favorable market conditions by completing the following post-March 31 transactions:</P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=561>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>On April 8, 2005, the Utility refinanced its existing $850 million working capital facility with a $1 billion working capital facility that has a term of 5 years, reduced fees and applicable margins, and less restrictive covenants;</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>On April 22, 2005, the Utility entered into an amendment to four reimbursement agreements totaling $620 million related to letters of credit aggregating $614 million that had been issued to support certain pollution control bonds issued on behalf of the Utility.  In addition to containing more favorable provisions, the term of the amended agreements has been extended from three years to five years until April 22, 2010; and </FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>On April 8, 2005, PG&amp;E Corporation's unsecured $200 million credit facility was amended to include an extended 5-year term and to conform the provisions regarding covenants, representations and events of default to those contained in the Utility's $1 billion working capital facility.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Currently, PG&amp;E Corporation and the Utility have available credit facilities totaling $200 million and $1.65 billion, respectively.</P>

<B><P>Dividends  </P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February 16, 2005, the Board of Directors of the Utility declared a dividend of $117 million that was paid on February 17, 2005, to PG&amp;E Corporation and PG&amp;E Holdings LLC, a wholly owned subsidiary of the Utility that held approximately 6% of the Utility's common stock.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Also, on February 16, 2005, the Board of Directors of PG&amp;E Corporation declared a quarterly common stock dividend of $0.30 per share to shareholders of record on March 31, 2005.  On April 15, 2005, PG&amp;E Corporation paid this dividend totaling approximately $118 million, of which approximately $7 million was paid to Elm Power Corporation, a wholly owned subsidiary of PG&amp;E Corporation.  In addition, PG&amp;E Corporation paid approximately $6 million in dividend equivalent payments to Convertible Subordinated Note holders of record on March 31, 2005.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation charged dividends declared to Accumulated Earnings and the Utility charged dividends declared to Reinvested Earnings.</P>
</FONT><FONT FACE="Times" SIZE=2>
<B><P>Stock Repurchases</P>
</B>
</FONT><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February 22, 2005, under an accelerated share repurchase arrangement entered into on December 15, 2004, PG&amp;E Corporation paid Goldman Sachs &amp; Co., or GS&amp;Co., approximately $14 million as a price adjustment based on the daily volume weighted average market price of PG&amp;E Corporation common stock over the term of the arrangement.  PG&amp;E Corporation charged the payment to Common Stock within Common Shareholders' Equity.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March 4, 2005, PG&amp;E Corporation entered into a new accelerated share repurchase arrangement with GS&amp;Co. under which PG&amp;E Corporation repurchased 29,489,400 shares of its common stock at an initial price of $35.60 per share (for an aggregate amount of approximately $1.05 billion).  The repurchase was funded from available cash on hand and the repurchased shares were retired.  PG&amp;E Corporation charged approximately $460 million to Common Stock and approximately $591 million to Accumulated Earnings within Common Shareholders' Equity in respect of these transactions.  Under the accelerated share repurchase arrangement, PG&amp;E Corporation may receive from, or be required to pay to, GS&amp;Co. a price adjustment based on the daily volume weighted average market price of PG&amp;E Corporation common stock over the term of the arrangement (approximately six months). Because the price adjustment and any additional payments that PG&amp;E Corporation may be required to make can be settled at PG&amp;E Corporation's option, in cash or in shares of its common stock, or a combination of the two, PG&amp;E Corporation accounts for its payment obligations as equity. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until the transaction is completed or terminated, GAAP requires PG&amp;E Corporation to assume that it will issue shares to settle its obligations (up to a maximum of two times the number of shares repurchased or 58,978,800 shares). PG&amp;E Corporation must calculate the number of shares that would be required to satisfy its obligations upon completion of the transaction based on the market price of PG&amp;E Corporation's common stock at the end of a reporting period.  The number of shares that would be required to satisfy the obligations must be treated as outstanding for purposes of calculating diluted earnings per share.  At March 31, 2005, PG&amp;E Corporation did not have any net payment obligations to GS&amp;Co. Accordingly, no additional shares of PG&amp;E Corporation common stock attributable to the accelerated share repurchase arrangement were treated as outstanding for purposes of calculating diluted earnings per share.  Based upon the average price of PG&amp;E Corporation stock from March 4, 2005 to March 31, 2005, and additional payments, GS&amp;Co. had a net payment obligation to PG&amp;E Corporation of approximately $1 million at March 31, 2005. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March 8, 2005, the Utility used proceeds from the issuance of ERBs (discussed in Note 4 of the Notes to the Condensed Consolidated Financial Statements) to repay debt and to repurchase 22,023,283 shares of its common stock from PG&amp;E Corporation for an aggregate purchase price of approximately $960 million.  The Utility recognized charges of approximately $141 million to Additional Paid-in Capital, approximately $110 million to Common Stock, and approximately $709 million to Reinvested Earnings within Shareholders' Equity in respect of this transaction.</P>
<B><P ALIGN="JUSTIFY"><A NAME="_Overview"></A></P>
<P ALIGN="JUSTIFY">Utility</P>
<I><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Operating Activities</P>
</B></I><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's cash flows from operating activities consist of sales to its customers and payments of operating expenses, other than expenses such as depreciation that do not require the use of cash.  Cash flows from operating activities are also impacted by collections of accounts receivable and payments of liabilities previously recorded.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's cash flows from operating activities for the three months ended March 31, 2005 and 2004 were as follows: </P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=600>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="28%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="28%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="28%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Net income</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">223&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3,074&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Non-cash (income) expenses:</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;Depreciation, amortization and decommissioning</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">385&nbsp;</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">311&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;Gain on establishment of regulatory asset, net</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(2,904)</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Change in accounts receivable</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">169&nbsp;</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">353&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Change in accrued taxes</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">220&nbsp;</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">98&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Other uses of cash:</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P>&nbsp;&nbsp;Payments authorized by the bankruptcy court on amounts<BR>
&nbsp;&nbsp;&nbsp;&nbsp;classified as liabilities subject to compromise</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(20)</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Other changes in operating assets and liabilities</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">38</FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">97&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Net cash provided by operating activities</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,035&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,009&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities increased by approximately $26 million during the three months ended March 31, 2005 compared to the same period in 2004, mainly due to the increase in net income of approximately $53 million, excluding the one-time non-cash gain, after tax, of approximately $2.9 billion related to the recognition of the regulatory assets established under the Settlement Agreement in the first quarter of 2004.<BR>
</P>
<B><I><P>Investing Activities</P>
</B></I><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's investing activities consist of construction of new and replacement facilities necessary to deliver safe and reliable electricity and natural gas services to its customers.  Cash flows from operating activities have been sufficient to fund the Utility's capital expenditure requirements during the three month periods ended March 31, 2005 and 2004.  Year to year variances depend upon the amount and type of construction activities, which can be influenced by storm and other factors. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's cash flows from investing activities for the three month periods ended March 31, 2005 and 2004 were as follows: </P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=491>
<TR><TD WIDTH="54%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="35%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=15>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" HEIGHT=15><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="35%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=15>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="35%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" HEIGHT=15>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=15>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=15>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P>Capital expenditures</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(349)</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">(342)</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" HEIGHT=10>
<FONT SIZE=2><P>Net proceeds from sale of assets</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=10><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=10><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=10>
<FONT SIZE=2><P ALIGN="RIGHT">11&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=10><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=10>
<FONT SIZE=2><P ALIGN="RIGHT">18&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=7>
<FONT SIZE=2><P>Decrease (increase) in restricted cash</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=7><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=7><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=7>
<FONT SIZE=2><P ALIGN="RIGHT">26&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=7><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=7>
<FONT SIZE=2><P ALIGN="RIGHT">(6,917)</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" BGCOLOR="#ffffff" HEIGHT=7>
<FONT SIZE=2><P>Other investing activities, net</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#ffffff" HEIGHT=7><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#ffffff" HEIGHT=7><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#ffffff" HEIGHT=7>
<FONT SIZE=2><P ALIGN="RIGHT">26&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" BGCOLOR="#ffffff" HEIGHT=7><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#ffffff" HEIGHT=7>
<FONT SIZE=2><P ALIGN="RIGHT">(65)</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=7>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;<B>Net cash used in investing activities</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=7><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=7><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=7><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=7>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=7>
<FONT SIZE=2><P ALIGN="RIGHT">(286)</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=7><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=7>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=7>
<FONT SIZE=2><P ALIGN="RIGHT">(7,306)</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used by investing activities decreased by approximately $7.0 billion primarily due to an increase in restricted cash of approximately $7.0 billion for the three months ended March 31, 2004 with no similar change for the same period in 2005.  In March 2004, the Utility consummated a public offering of $6.7 billion of first mortgage bonds.  Proceeds from this offering and redemption premiums and interest of $217 million were deposited into escrow for payment of claims upon emergence from Chapter 11.  On April 12, 2004, the effective date of the Utility's plan or reorganization, this cash was paid out of the escrow account.</P>

<B><I><P ALIGN="JUSTIFY">Financing Activities</P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2005, the Utility used the $1.9 billion proceeds of the ERBs to refinance the Settlement Regulatory Asset through the repayment of debt and repurchase of equity.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's cash flows from financing activities for the three month period ended March 31, 2005 and 2004 were as follows: </P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=636>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=8><P></P></TD>
<TD WIDTH="29%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=8>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=8><P></P></TD>
<TD WIDTH="29%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=8>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="29%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=8>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=8><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=8>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=8><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=8>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Net proceeds from long-term debt issued</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,547&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P>Net proceeds from energy recovery bonds issued</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,874&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Net repayments under credit facilities and short-term borrowings</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(300)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P>Rate reduction bonds matured</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(74)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(74)</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Long-term debt, matured, redeemed or repurchased</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(900)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(310)</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=11>
<FONT SIZE=2><P>Common stock dividends paid</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11>
<FONT SIZE=2><P ALIGN="RIGHT">(110)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11>
<FONT SIZE=2><P ALIGN="RIGHT">&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=11>
<FONT SIZE=2><P>Preferred dividends paid</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=11><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=11><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=11>
<FONT SIZE=2><P ALIGN="RIGHT">(4)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=11><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=11>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=11>
<FONT SIZE=2><P>Preferred stock with mandatory redemption provisions redeemed</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11>
<FONT SIZE=2><P ALIGN="RIGHT">(2)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=11>
<FONT SIZE=2><P>Common stock repurchased</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=11><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=11><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=11>
<FONT SIZE=2><P ALIGN="RIGHT">(960)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=11><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=11>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=11>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Net cash provided by (used in) financing activities</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=11>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=11>
<FONT SIZE=2><P ALIGN="RIGHT">(476)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=11>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=11>
<FONT SIZE=2><P ALIGN="RIGHT">6,163&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the three months ended March 31, 2005, net cash used in financing activities decreased by approximately $6.6 billion compared to the same period in 2004, due to the following factors:</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=561>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>In March 2004, in connection with the Utility's plan of reorganization, the Utility issued approximately $6.5 billion, net of issuance costs, in long-term debt with no comparable amount in the three months ended March 31, 2005;</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=21>
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP" HEIGHT=21>
<FONT SIZE=2><P>In February 2005, PERF issued approximately $1.9 billion of ERBs with no similar issuance in 2004  (see Note 4 of the Notes to the Condensed Consolidated Financial Statements for further discussion);</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>During the quarter, the Utility repaid $300 million it borrowed under its $850 million working capital facility; </FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=43>
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP" HEIGHT=43>
<FONT SIZE=2><P>In January 2005, the Utility partially redeemed Floating Rate First Mortgage Bonds due in 2006 in the aggregate principal amount of $300 million and on February 24, 2005, the Utility used a portion of the ERBs proceeds to defease $600 million of Floating Rate First Mortgage Bonds.  During the first quarter 2004, repayments on long-term debt totaled $310 million.  As a result, repayments on long-term debt increased approximately $590 million in the three months ended March 31, 2005, as compared to the same period in 2004; </FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>In February 2005, the Utility paid $110 million in common stock dividends to PG&amp;E Corporation and $7 million to PG&amp;E Holdings LLC, a wholly owned subsidiary of the Utility;</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Approximately $4 million of preferred stock dividends were paid during the three months ended March 31, 2005; and</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>In March 2005, the Utility used proceeds from the issuance of ERBs to repurchase $960 million of its common stock from PG&amp;E Corporation.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<B><P ALIGN="JUSTIFY">PG&amp;E Corporation</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of March 31, 2005, PG&amp;E Corporation had stand-alone cash and cash equivalents of approximately $319 million.  PG&amp;E Corporation's sources of funds are dividends and share repurchases from the Utility, issuance of its common stock and external financing.  The Utility paid a cash dividend of $117 million to PG&amp;E Corporation and PG&amp;E Holdings LLC on February 17, 2005.  The Utility did not pay any dividends to, nor repurchase shares from, PG&amp;E Corporation during 2004.</P>
<P ALIGN="JUSTIFY"></P>
<B><I><P ALIGN="JUSTIFY">Operating Activities</P>
</B></I><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation's consolidated cash flows from operating activities consist mainly of billings to the Utility and other affiliates for services rendered and payments for employee compensation and goods and services provided by others to PG&amp;E Corporation.  PG&amp;E Corporation also incurs interest costs associated with its debt.</P>
<B>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation's consolidated cash flows from operating activities for the three months ended March 31, 2005 and 2004 were as follows:</P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=495>
<TR><TD WIDTH="65%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="27%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="27%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="27%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" HEIGHT=16>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Net income </FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">218&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3,033&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Non-cash (income) expenses:</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Depreciation, amortization and decommissioning</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">385&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">312&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Deferred income taxes and tax credits, net</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(63)</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(70)</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Recognition of regulatory asset, net of tax</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(2,904)</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Other deferred charges and noncurrent liabilities</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(45)</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">237&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Tax benefit from employee stock plans</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">25&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Other changes in operating assets and liabilities</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">528&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">279&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities </B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,048&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">887&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities increased by $161 million during the three months ended March 31, 2005, compared to the same period in 2004.  This increase was primarily related to the recognition of tax benefits on the exercise of employee stock options during the three months ended March 31, 2005, with no similar amount in 2004 and the payment of approximately $84 million to participating individuals in the senior executive retention program in January 2004, with no similar payment in 2005.</P>

<B><I><P ALIGN="JUSTIFY">Investing Activities  </P>
<P ALIGN="JUSTIFY"></P>
</B></I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March 8, 2005, PG&amp;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&amp;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.</P>
<P ALIGN="JUSTIFY"></P>
<B><I><P ALIGN="JUSTIFY">Financing Activities</P>
</B></I><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation's consolidated cash flows from financing activities consist mainly of cash generated from debt refinancing and the issuance of common stock.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation's consolidated cash flows from financing activities for the three months ended March 31, 2005 and 2004 were as follows: </P>
<P> </P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=553>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="33%" VALIGN="BOTTOM" COLSPAN=5 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=16>
<B><FONT SIZE=2><P>(in millions)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Net repayments under credit facilities and short-term borrowings</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(300)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P>Net proceeds from issuance of energy recovery bonds</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,874&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Net proceeds from issuance of long-term debt</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,547&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P>Long-term debt matured, redeemed or repurchased</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(901)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(310)</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Rate reduction bonds matured</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(74)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(74)</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P>Preferred stock with mandatory redemption provisions redeemed</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(2)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Common stock issued</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">120&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">58&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P>Common stock repurchased</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(1,065)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P>Preferred dividends paid</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(4)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=16>
<FONT SIZE=2><P>Other, net</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(1)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Net cash (used in) provided by financing activities </B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="0%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(353)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,221&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="0%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation's net cash used by financing activities decreased by $6.6 billion for the three months ended March 31, 2005, compared to the same period in 2004.  The decrease was primarily related to the Utility's financing activities as discussed above, PG&amp;E Corporation's repurchase of approximately 29.5 million shares of common stock under an accelerated share repurchase agreement in March 2005 at an initial purchase price of $1.05 billion, and increased proceeds from common stock issuances due to increased employee stock option exercises in the three months ended March 31, 2005, compared to the same period in 2004.  As discussed above, the Utility's repurchase of its common stock from PG&amp;E Corporation totaling $960 million in March 2005 was eliminated in consolidation.</P>

<B><P><A NAME="cap_exp_comm_mda"><A NAME="contractual_commitments"></A></A>CONTRACTUAL COMMITMENTS</P>

</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation and the Utility enter into contractual obligations and commitments in connection with business activities.  These obligations need to be funded in the future and primarily relate to financing arrangements (such as long-term debt, preferred stock and certain forms of regulatory financing), purchases of transportation capacity, natural gas and electricity to support customer demand and the purchase of fuel and transportation to support the Utility's generation activities. Refer to Note 7 in the Notes to the Condensed Consolidated Financial Statements and PG&amp;E Corporation's and the Utility's combined 2004 Annual Report for further discussion. </P>
<B><P> </P>
<P>Utility</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's contractual commitments include power purchase agreements (including agreements with qualifying facilities, irrigation districts and water agencies, and renewable energy providers), natural gas supply and transportation agreements, nuclear fuel agreements, operating leases, and other commitments.  </P>

<B><P><A NAME="capital_expenditures"></A>Capital Expenditures  </P>

</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's investment in plant and equipment is necessary to replace aging and obsolete equipment and accommodate anticipated electricity and natural gas load growth.  It is estimated that the Utility's base capital expenditures will approximate $1.9 billion in each of 2005 and 2006 (excluding potential investments in an advanced metering infrastructure, as discussed below).</P>
<P> </P>
<B><I><P>Advanced Metering Infrastructure  </P>

</B></I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The CPUC is assessing the viability of implementing an advanced metering infrastructure for residential and small commercial customers. This infrastructure would enable California investor-owned electric utilities to measure usage of electricity on a time-of-use basis and to charge demand responsive rates. The goal of demand responsive rates is to encourage customers to reduce energy consumption during peak demand periods and to reduce peak period procurement costs. Advanced meters can record usage in time intervals and be read remotely. The Utility is implementing demand responsive tariffs for large industrial customers who already have advanced metering systems in place, and a statewide pilot program was recently completed to test whether and how much residential and small commercial customers will respond to demand responsive rates.  If the CPUC determines that it would be cost effective to install advanced metering on a large scale and authorizes the Utility to proceed with large scale development of advanced metering for residential and small commercial customers, the Utility expects that it would incur substantial costs to convert its meters, build the meter reading network, and build the data storage and processing facilities to bill its customers. On March 15, 2005, the Utility filed an application with the CPUC to spend up to $49 million on pre-deployment activities for advanced metering.  This application has not yet been approved.  The Utility expects to file an application for deployment of the full advanced metering project in the summer of 2005.  The Utility would expect to recover through rates the capital investments and any ongoing operating costs net of operating savings associated with implementing the advanced metering project. The total deployment of an advanced metering infrastructure to all of the Utility's electricity and natural gas customers using equipment and technology currently available may cost more than $1.0 billion, based on a five-year installation schedule starting in 2006.</P>
<B><P ALIGN="JUSTIFY"></P>
<P><A NAME="off_balance_sheet"></A>Off-Balance Sheet Arrangements  </P>

</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For financing and other business purposes, PG&amp;E Corporation and the Utility utilize certain arrangements that are not reflected in their Consolidated Balance Sheets.  Such arrangements do not represent a significant part of either PG&amp;E Corporation's or the Utility's activities or a significant ongoing source of financing.  These arrangements are used to enable PG&amp;E Corporation or the Utility to obtain financing or execute commercial transactions on favorable terms, and amounts due under these contracts are contingent upon terms contained in these arrangements.  For further information related to letter of credit agreements, the credit facilities, aspects of PG&amp;E Corporation's accelerated share repurchase program, and PG&amp;E Corporation's guarantee related to certain NEGT indemnity obligations and the Utility's workers' compensation obligations, see Notes 3, 5, and 7 of the Notes to the Condensed Consolidated Financial Statements.</P>
<P ALIGN="JUSTIFY"></P>
<B><P ALIGN="JUSTIFY"><A NAME="contingencies"></A>Contingencies</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation and the Utility have significant contingencies that are discussed below. Also, refer to Note 7 in the Notes to the Condensed Consolidated Financial Statements for further discussion.</P>

<B><P ALIGN="JUSTIFY"><A NAME="_REGULATORY_MATTERS_"></A>Regulatory Matters  </P>
</B><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Times" SIZE=2>This section of the MD&amp;A discusses significant regulatory issues pending before the CPUC, the FERC, or the NRC, the resolution of which may affect the Utility's and PG&amp;E Corporation's results of operations or financial condition.  The information presented below should be read in conjunction with PG&amp;E Corporation's and the Utility's combined 2004 Annual Report.</P>
</FONT><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<B><I><P>Electricity Generation Resources</P>
</B></I><P ALIGN="JUSTIFY"></P>
<I><P>Procurement Cost Balancing Account and Mandatory Rate Adjustments</P>

</I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;California law allows the Utility to recover its reasonably incurred wholesale electricity procurement costs.  The Utility has established a balancing account, the Energy Resource Recovery Account, or ERRA, to track the difference between the authorized revenue requirement and the actual costs incurred under the Utility's authorized electricity resource procurement plans, excluding the costs associated with the DWR allocated contracts and certain other items.  The CPUC must review the revenues and costs recorded in the ERRA at least semi-annually and adjust retail electricity rates or order refunds, as appropriate, when the forecast aggregate over-collections or under-collections exceed 5% of the Utility's prior year electricity procurement revenues, excluding amounts collected for the DWR.  For 2005, 5% of the Utility's 2004 electricity procurement revenues, excluding amounts collected for the DWR, is approximately $164.4 million.  As of March 31, 2005, the ERRA had an over-collected balance of approximately $82 million, below the amount that would trigger the mandatory adjustment of rates.  The CPUC approved an ERRA revenue requirement of $2.14 billion for 2005 based on forecast costs and has authorized the Utility to amortize routine over- and under-collections in the ERRA annually to coincide with January 1 rate changes.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The CPUC performs periodic compliance reviews of the procurement activities recorded in the ERRA to ensure that the Utility's procurement activities are in compliance with its approved procurement plans.  The cost of procurement activities related to the DWR's allocated contracts could be disallowed up to a maximum of two times the Utility's administration costs associated with procurement each year.  For 2005, this amount is $36 million.  On April 21, 2005, the CPUC approved the Utility's application related to its procurement activities recorded in the ERRA for the period of January 1, 2003 through May 31, 2003, finding that the Utility's contract administration, least cost dispatch, procurement activities, and generation fuel costs were in compliance with its 2003 updated procurement plan.  The Utility expects to receive a draft decision on the remainder of the record period (i.e., June 1, 2003 to December 31, 2003) in the second quarter of 2005.  On February 15, 2005, the Utility filed an ERRA compliance review application for the January 1 - December 31, 2004 record period.  Final action on the 2004 record period application is expected before the end of 2005.  PG&amp;E Corporation and the Utility are unable to predict whether a disallowance will result or the size of any potential disallowance.  In addition, it is uncertain whether the CPUC will modify or eliminate the maximum disallowance for future years.</P>

<I><P>New Long-Term Generation Resource Commitments</P>
</I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with the Utility's CPUC-approved long-term electricity procurement plan, the Utility has requested offers from providers of all potential sources of new generation (e.g., conventional or renewable resources to be provided under utility-owned projects or turnkey developments, or buyouts, or under third party power purchase agreements) for approximately 1,200 megawatts, or MW, of peaking resources by 2008 and an additional 1,000 MW of load-following resources by 2010.</P>
</FONT>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initial bids were submitted in late April 2005. It is anticipated that contracts for the winning bidders will be submitted to the CPUC for approval in the second half of 2005.</P>

<B><I><P>DWR Allocated Contracts  </P>
</B>
</I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility acts as a billing agent for the collection of the DWR's revenue requirements from the Utility's customers. The DWR's revenue requirements consist of a power charge to pay for the DWR's costs of purchasing electricity under its contracts and a bond charge to pay for the DWR's costs associated with its $11.3 billion bond offering completed in November 2002. In December 2004, the CPUC issued a decision on the permanent cost allocation methodology for the DWR's power charge revenue requirements in 2004 and subsequent years, among the three California investor-owned electric utilities.  In January 2005, the CPUC granted limited rehearing of its permanent cost allocation decision to address how to calculate the above-market costs of the DWR power contracts.  A final decision on DWR permanent cost allocation is expected in the second quarter of 2005. The Utility cannot predict the final outcome of this matter. As a result of the transition from frozen rates and the electricity procurement recovery mechanism described below, the collection of DWR revenue requirements, or any adjustments thereto, should not affect the Utility's results of operations.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The CPUC is also considering reallocation of certain DWR contracts for operation and dispatch purposes.  The Utility is unable to predict the outcome of this proceeding, nor the potential financial impact.</P>
<I>
<B><P>Diablo Canyon Steam Generator Replacement Projects</P>
<P ALIGN="JUSTIFY"></P>
</B></I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February 24, 2005 the CPUC issued an interim decision on the Utility's Diablo Canyon Steam Generator Replacement Project, or SGRP, application.  The interim decision concluded that the SGRP is cost-effective and $706 million, as adjusted for actual inflation and cost of capital, is a reasonable estimate of the SGRP cost.  The interim decision also concluded that an after-the-fact reasonableness review of the SGRP cost is not required, but not precluded either.  It adopts a maximum allowable SGRP cost cap of $815 million as adjusted for actual inflation and cost of capital, and the Utility will not be allowed to recover SGRP costs in excess of this amount.  The Utility will file an advice letter to request authority to implement a rate increase, subject to refund, for each unit at the time each unit begins commercial operations.  After installation is complete, and both units are operational, the Utility will be required to file an application to include the costs permanently in rates.  The interim decision does not approve or disapprove the SGRP, guarantee or approve the recovery of any expenditures related thereto, or dictate the outcome of the environmental review of the SGRP pursuant to the California Environmental Quality Act, or CEQA.  A final decision, which will include the results of the CEQA review, is expected in September 2005.  As of March 31, 2005, expenditures on the project of approximately $26.7 million have been incurred.  These expenditures are expected to increase to approximately $65 million by September 2005 when the CPUC's final decision approving the project is expected.  If the CPUC approves the project, the Utility estimates it would spend an additional $14.5 million in the last quarter of 2005.  If the CPUC does not approve the projects, then the Utility will terminate the contracts and seek to recover the project costs that it incurred before termination from customers through the abandoned project process.</P>
</FONT>
<B><I><FONT SIZE=2><P>Annual Earnings Assessment Proceeding for Energy Efficiency Program Activities and Public Purpose Programs</P>
</I>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April 4, 2005, the Utility filed a motion with the CPUC seeking approval of a settlement agreement entered into on April 4, 2005 between the Utility and the CPUC's Office of Ratepayer Advocates, or the ORA.  The settlement agreement proposes the resolution of the Utility's claims that have been pending for several years for shareholder incentives earned by the Utility for the successful implementation of demand-side management, energy efficiency, and low-income energy efficiency programs for past program years 1994 through 2001.  The Utility's claims for shareholder incentives are addressed in the Utility's Annual Earnings Assessment Proceeding, or AEAP.  In addition to resolving claims made in the pending AEAPs, the settlement agreement proposes to resolve all future claims for shareholder incentives relating to past program years that the Utility would otherwise have made in future AEAPs through 2010.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's total current and future shareholder incentive claims aggregate to approximately $207 million.  Under the settlement agreement, the parties have agreed that the results to date show that the energy savings anticipated in the Utility's shareholder incentive claims are being realized.  The parties have proposed that the Utility receive shareholder incentives of approximately $186 million to resolve the Utility's claims in the pending and future AEAPs.   The parties have proposed that approximately $160 million be collected from electric customers and approximately $26 million be collected from gas customers, in proportion to the relative allocations of the original claims.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation and the Utility cannot predict whether or when the CPUC will approve the settlement agreement.  Assuming the CPUC approves the settlement agreement, the Utility would record pre-tax income of approximately $186 million during the quarter in which the settlement agreement is approved by the CPUC.  </P>

<B><I><P ALIGN="JUSTIFY">Pending CPUC Investigations </P>
<P ALIGN="JUSTIFY"></P>
</B></I><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March 17, 2005, the CPUC issued an order that institutes an investigation into the circumstances surrounding a fire that occurred at the Utility's Mission Street substation in San Francisco in December 2003 and the ensuing power outage.</FONT>  <FONT SIZE=2>Approximately 100,000 of the Utility's customers were affected by the outage, which began in the early evening of December 20, 2003.  While most customers had their power restored by the next morning, the outage lasted more than 24 hours for some customers.</FONT>  <FONT SIZE=2>The CPUC's order notes that the CPUC has authority to impose penalties in the amount of $500 to $20,000 per day per offense for violations of the Public Utilities Code.  The order states that the CPUC may consider a penalty for each customer that lost power, or for each day the outage was ongoing.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the CPUC issued a press release noting that CPUC staff also would investigate the causes of a fire and power outage that originated at the Mission Street substation on March 26, 2005, that affected approximately 23,500 of the Utility's customers.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The CPUC's Consumer Protection and Safety Division, or CPSD, will make a penalty recommendation in July 2005.  A final decision on the investigation is expected during the fourth quarter of 2005.  PG&amp;E Corporation and the Utility are unable to predict whether the outcome of this matter will have a material adverse effect on their results of operation or financial condition.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The CPUC also is conducting an investigation into the Utility's billing and collection practices that has been opened at the request of The Utility Reform Network, or TURN.  Although a definitive schedule has not yet been set, on March 22, 2005, the CPUC administrative law judge presiding over the investigation considered a schedule that contemplated the following:</P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=576>
<TR><TD WIDTH="37%" VALIGN="TOP">
<FONT SIZE=2><P>September 22, 2005</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P>Reports due from the CPSD, TURN, and other parties</FONT></TD>
</TR>
<TR><TD WIDTH="37%" VALIGN="TOP" HEIGHT=24>
<FONT SIZE=2><P>December 20, 2005</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=24><P></P></TD>
<TD WIDTH="60%" VALIGN="TOP" HEIGHT=24>
<FONT SIZE=2><P>Utility's response to reports due</FONT></TD>
</TR>
<TR><TD WIDTH="37%" VALIGN="TOP" HEIGHT=24>
<FONT SIZE=2><P>Late January - early February 2006</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=24><P></P></TD>
<TD WIDTH="60%" VALIGN="TOP" HEIGHT=24>
<FONT SIZE=2><P>Parties file reply comments to the Utility's response</FONT></TD>
</TR>
<TR><TD WIDTH="37%" VALIGN="TOP">
<FONT SIZE=2><P>April - May 2006</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P>Hearings</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the CPUC finds that the Utility violated applicable tariffs or the CPUC's orders or rules, the CPUC may impose penalties on the Utility or order the Utility to refund any amounts collected in violation of tariffs, plus interest, to customers who paid such amounts.  PG&amp;E Corporation and the Utility continue to believe that the ultimate outcome of this matter will not have a material adverse effect on PG&amp;E Corporation's or the Utility's results of operations or financial condition.</P>

<B><P ALIGN="JUSTIFY"><A NAME="_RISK_MANAGEMENT_ACTIVITIES"></A>RISK MANAGEMENT ACTIVITIES  </P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility and PG&amp;E Corporation, mainly through its ownership of the Utility, are exposed to market risk, which is the risk that changes in market conditions will adversely affect net income or cash flows.  PG&amp;E Corporation and the Utility face market risk associated with their operations, financing arrangements, the marketplace for electricity, natural gas, electricity transmission, natural gas transportation and storage, other goods and services, and other aspects of their business.  PG&amp;E Corporation and the Utility categorize market risks as price risk, interest rate risk and credit risk.  The Utility actively manages market risks through risk management programs that are designed to support business objectives, reduce costs, discourage unauthorized risk-taking, reduce earnings volatility and manage cash flows.  The Utility uses derivative instruments only for non-trading purposes (i.e., risk mitigation) and not for speculative purposes.  The Utility's risk management activities include the use of energy and financial instruments, including forward contracts, futures, swaps, options, and other instruments and agreements, most of which are accounted for as derivative instruments.  Some contracts are accounted for as leases.</P>
<U>
</U><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility estimates fair value of derivative instruments using the midpoint of quoted bid and asked forward prices, including quotes from customers, brokers, electronic exchanges and public indices, supplemented by online price information from news services.  When market data is not available, the Utility uses models to estimate fair value.</P>
<B>
<P>Price Risk  </P>
<I>
<P>Convertible Subordinated Notes</P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation currently has outstanding $280 million of 9.50% Convertible Subordinated Notes that are scheduled to mature on June 30, 2010.  These Convertible Subordinated Notes may be converted (at the option of the holder) at any time prior to maturity into 18,558,655 shares of common stock of PG&amp;E Corporation, at a conversion price of approximately $15.09 per share.  The conversion price is subject to adjustment should a significant change occur in the number of PG&amp;E Corporation's outstanding common shares.  To date, the conversion price has not required adjustment.  In addition, holders of the Convertible Subordinated Notes are entitled to receive pass-through dividends at the same payout as common stockholders with the number of shares determined by dividing the principal amount of the Convertible Subordinated Notes by the conversion price.  On April 15, 2005, PG&amp;E Corporation paid approximately $6 million of pass-through dividends to holders of the Convertible Subordinated Notes.  The holders have a one-time right to require PG&amp;E Corporation to repurchase the Convertible Subordinated Notes on June 30, 2007, at a purchase price equal to the principal amount plus accrued and unpaid interest (including liquidated damages and pass-through dividends, if any).</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with SFAS No. 133. "Accounting for Derivative Instruments and Hedging Activities," or SFAS No. 133, the dividend participation rights component is considered to be an embedded derivative instrument and, therefore, must be bifurcated from the Convertible Subordinated Notes and marked to market on PG&amp;E Corporation's Consolidated Statements of Income as a non-operating expense (in Other expense, net), and reflected at fair value on PG&amp;E Corporation's Consolidated Balance Sheet at March 31, 2005.  At March 31, 2005, the total estimated fair value of the dividend participation rights component, on a pre-tax basis, was approximately $92 million of which $20 million is classified as a current liability (in Current liabilities-Other) and $72 million is classified as a noncurrent liability (in Noncurrent liabilities-Other).  The change in mark to market fair value for the quarter ended March 31, 2005, was immaterial, and approximately $32 million, pre-tax, for the quarter ended March 31, 2004.</P>
<B><I>
<P>Electricity  </P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility relies on electricity from a diverse mix of resources, including third-party contracts, amounts allocated under DWR contracts and its own electricity generation facilities.  In addition, the Utility purchases and sells electricity on the spot market and the short-term forward market (contracts with delivery times ranging from one hour ahead to one year ahead).</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is estimated that the residual net open position (the amount of electricity needed to meet the demands of customers, plus applicable reserve margins, that is not satisfied from the Utility's own generation facilities, purchase contracts or DWR contracts allocated to the Utility's customers) will change over time for a number of reasons, including:</P>
</FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=561>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Periodic expirations of existing electricity purchase contracts, or entering into new electricity purchase contracts;</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Fluctuation in the output of hydroelectric and other renewable power facilities owned or under contract;</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Changes in the Utility's customers' electricity demands due to customer and economic growth and weather, and implementation of new energy efficiency and demand response programs, community choice aggregation, and a core/noncore retail market structure;</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>Planning reserve and operating requirements;</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>The reallocation of the DWR power purchase contracts among California investor-owned electric utilities; and</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"><FONT FACE="Symbol">&#183;</FONT>
</FONT></TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=2><P>The acquisition, retirement or closure of Utility generation facilities.</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, unexpected outages at the Utility's generation facilities, or a failure to perform by any of the counterparties to electricity purchase contracts or the DWR allocated contracts, would immediately increase the Utility's residual net open position.  The Utility expects to satisfy at least some of the residual net open position through new contracts.  In December 2004, the CPUC approved, with certain modifications, the Utility's long-term electricity procurement plan, or LTPP, for the 2005 through 2014 period.  The LTPP is detailed in the "Regulatory Matters" section of the MD&amp;A in PG&amp;E Corporation's and the Utility's combined 2004 Annual Report.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Settlement Agreement provides that the Utility will recover its reasonable costs of providing utility service, including power procurement costs.  In addition, California law requires that the CPUC review revenues and expenses associated with a CPUC-approved procurement plan at least semi-annually through 2006 and adjust retail electricity rates, or order refunds when there is an under or over-collection exceeding 5% of the Utility's prior year electricity procurement revenues, excluding the revenue collected on behalf of the DWR.  In addition, the CPUC has established a maximum procurement disallowance of approximately $36 million for the Utility's administration of the DWR contracts and least-cost dispatch.  Adverse market price changes are not expected to impact the Utility's net income while these cost recovery regulatory mechanisms remain in place.  However, the Utility is at risk to the extent that the CPUC may in the future disallow transactions.  Additionally, market price changes could impact the timing of the Utility's cash flows.</P>

<B><I><P>Nuclear Fuel  </P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility purchases nuclear fuel for Diablo Canyon through contracts with terms ranging from two to five years.  These long-term nuclear fuel agreements are with large, well-established international producers in order to diversify its commitments and provide security of supply.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nuclear fuel purchases are subject to tariffs of up to 8% on imports from certain countries.  In the past, the Utility's long-term nuclear fuel contracts were not subject to these tariffs.  However, these contracts expired at the end of 2004, and prices under existing and future contracts may be higher as a result of such tariffs.  In addition, because of an increase in U.S. demand for uranium compared with the domestic supply, uranium prices have been trending higher in 2005.  During the quarter ended March 31, 2005, the Utility did not enter into any nuclear fuel purchase agreements.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As the Utility replaces contracts that expired at the end of 2004 with new higher priced uranium contracts, nuclear fuel costs will rise.  The Utility is expected to partially offset these higher prices by executing a portfolio of near- and long-term contracts for nuclear fuel components.  These costs are recovered in ERRA (see the "Electricity Generation Resources" section of this MD&amp;A), therefore, the changes in nuclear fuel prices are not expected to materially impact net income.</P>
<B><I>
<P>Natural Gas</P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility generally enters into physical and financial natural gas commodity contracts from one to 30 months in length to fulfill the needs of its retail core customers.  Changes in temperature cause natural gas demand to vary daily, monthly and seasonally.  Consequently, significant volumes of gas may be purchased in the monthly and, to a lesser extent, daily spot market.  The Utility's cost of natural gas purchased for its core customers includes the commodity cost, the cost of Canadian and interstate transportation and gas storage costs.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the Core Procurement Incentive Mechanism, or CPIM, the Utility's purchase costs for a fixed twelve-month period are compared to an aggregate market-based benchmark based on a weighted average of published monthly and daily natural gas price indices at the points where the Utility typically purchases natural gas.  Costs that fall within a tolerance band, which is 99% to 102% of the benchmark, are considered reasonable and are fully recovered in customers' rates.  One-half of the costs above 102% of the benchmark are recoverable in customers' rates, and the Utility's customers receive, in their rates, three-fourths of any savings resulting from the Utility's cost of natural gas that is less than 99% of the benchmark.  The shareholder award is capped at the lower of 1.5% of total natural gas commodity costs or $25 million.  While this cost recovery mechanism remains in place, changes in the price of natural gas are not expected to materially impact net income.</P>
<B><I>
<P>Transportation and Storage </P>
</B></I>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility currently faces price and volumetric risk for the portion of intrastate natural gas transportation capacity that is not contracted under fixed reservation charges used by core customers.  Non-core customers contract with the Utility for natural gas transportation and storage, along with natural gas parking and lending (market center) services.  The Utility is at risk for any natural gas transportation and storage revenue volatility.  Transportation is sold at competitive market-based rates within a cost-of-service tariff framework.  There are significant seasonal and annual variations in the demand for natural gas transportation and storage services.  The Utility sells most of its pipeline capacity based on the volume of natural gas that is transported by its customers.  As a result, the Utility's natural gas transportation revenues fluctuate.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility uses value-at-risk to measure the Utility's exposure to market conditions that could impact transportation and storage revenues based on changes in market prices and demand for pipeline and storage services over a rolling 12-month holding period.  This calculation is based on a 99% confidence level, which means that there is a 1% probability that the impact to revenues will be at least as large as the reported value-at-risk.  The Utility's value-at-risk calculated under this methodology was approximately $35 million at March 31, 2005.  The Utility's high, low, and average value-at-risk during the three months ended March 31, 2005 were approximately $43 million, $34 million and $38 million, respectively. Value-at-risk has several limitations as a measure of portfolio risk, including, but not limited to, inadequate indication of the exposure of a portfolio to extreme price movements and not capturing the intra-day risk related to position changes.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning January 1, 2005, the Utility began calculating value-at-risk using the methodology described above on a prospective basis only.  For comparative purposes in 2005, the Utility will continue to report value-at-risk for the transportation and storage portfolio under the methodology formerly used in addition to value-at-risk calculated under the enhanced methodology.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to January 1, 2005, the Utility used value-at-risk to measure the expected maximum change over a one-day period in the rolling 18-month forward value of its transportation and storage portfolio.  This calculation is based on a 95% confidence level, which means that there is a 5% probability that the portfolio will incur a loss in value in one day at least as large as the reported value-at-risk.  For example, if the value-at-risk is calculated at $5 million, there is a 95% probability that the value of the portfolio resulting from a one-day price movement would not decline by more than $5 million.  This value-at-risk methodology provides an indication of the Utility's exposure to potential market conditions that could impact revenues based on one-day price changes.  It is also a way to measure the effectiveness of hedge strategies on a portfolio.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's value-at-risk for its transportation and storage portfolio calculated under the methodology used prior to January 1, 2005 was approximately $2 million at March 31, 2005 and approximately $3 million at March 31, 2004.  A comparison of daily values-at-risk is included in order to provide context around the one-day amounts.  The Utility's high, low and average transportation and storage value-at-risk during the three months ended March 31, 2005 were approximately $4 million, $2 million and $2 million, respectively.  The Utility's high, low and average transportation and storage value-at-risk during the three months ended March 31, 2004 were approximately $6 million, $3 million and $4 million, respectively.</P>
<B>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Value-at-risk calculated under the methodology used prior to January 1, 2005 has several limitations as a measure of portfolio risk, including, but not limited to, underestimation of the risk of a portfolio with significant options exposure, mismatch of one-day liquidation period assumed in the value-at-risk methodology as compared to the longer term holding period of the storage and transportation portfolio, and inadequate indication of the exposure of a portfolio to extreme price movements.  In addition, this value-at-risk methodology does not measure intra-day risk from position changes nor does it measure volumetric uncertainty in the demand for pipeline services.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to the limitations of this value-at-risk methodology, the Utility enhanced the calculation methodology as described above to 1) capture uncertainty with respect to demand (volumetric uncertainty) for pipeline services, 2) reflect the market conditions in which the pipeline operates by increasing the holding period to 12 months, and 3) include the uncertainty associated with the option exposure in the pipeline portfolio. </P>
<B>
<P>Interest Rate Risk</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest rate risk is the risk that changes in interest rates could adversely affect earnings or cash flows.  Specific interest rate risks for PG&amp;E Corporation and the Utility include the risk of increasing interest rates on variable rate obligations.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest rate risk sensitivity analysis is used to measure interest rate risk by computing estimated changes in cash flows as a result of assumed changes in market interest rates.  At March 31, 2005, if interest rates changed by 1% for all current variable rate debt issued by PG&amp;E Corporation and the Utility, the change would affect net income by an immaterial amount, based on net variable rate debt and other interest rate-sensitive instruments outstanding.</P>
<B>
<P>Credit Risk  </P>

</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit risk is the risk of loss that PG&amp;E Corporation and the Utility would incur if customers or counterparties failed to perform their contractual obligations.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation had gross accounts receivable of approximately $2.0 billion at March 31, 2005 and approximately $2.2 billion at December 31, 2004.  The majority of the accounts receivable were associated with the Utility's residential and small commercial customers.  Based upon historical experience and evaluation of then-current factors, allowances for doubtful accounts of approximately $88 million at March 31, 2005 and approximately $93 million at December 31, 2004 were recorded against those accounts receivable.  In accordance with tariffs, credit risk exposure is limited by requiring deposits from new customers and from those customers whose past payment practices are below standard.  The Utility has a regional concentration of credit risk associated with its receivables from residential and small commercial customers in northern and central California.  However, material loss due to non-performance from these customers is not considered likely.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility manages credit risk for its wholesale customers and counterparties by assigning credit limits based on an evaluation of their financial condition, net worth, credit rating and other credit criteria as deemed appropriate.  Credit limits and credit quality are monitored frequently and a detailed credit analysis is performed at least annually.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit exposure for the Utility's wholesale customers and counterparties is calculated daily.  If exposure exceeds the established limits, the Utility takes immediate action to reduce the exposure or obtain additional collateral, or both.  Further, the Utility relies heavily on master agreements that require security, referred to as credit collateral, in the form of cash, letters of credit, corporate guarantees of acceptable credit quality, or eligible securities if current net receivables and replacement cost exposure exceed contractually specified limits.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility calculates gross credit exposure for each of its wholesale customers and counterparties as the current mark-to-market value of the contract (<I>i.e.</I>, the amount that would be lost if the counterparty defaulted today), plus or minus any outstanding net receivables or payables, before the application of credit collateral.  During the three months ended March 31, 2005, the Utility recognized no material losses due to contract defaults or bankruptcies.  At March 31, 2005, there were two counterparties that represented greater than 10% of the Utility's net wholesale credit exposure.  Both of these counterparties were investment grade, representing a total of approximately 47% of the Utility's net wholesale credit exposure.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility conducts business with wholesale counterparties mainly in the energy industry, including other California investor-owned electric utilities, municipal utilities, energy trading companies, financial institutions, and oil and natural gas production companies located in the United States and Canada.  This concentration of counterparties may impact the Utility's overall exposure to credit risk because counterparties may be similarly affected by economic or regulatory changes, or other changes in conditions.  Credit losses experienced as a result of electrical and gas procurement activities are expected to be recoverable from customers and are therefore, not expected to have a material impact on earnings.</P>

<B><P ALIGN="JUSTIFY"><A NAME="critical_acctg_mda"></A>CRITICAL ACCOUNTING POLICIES</P>
</B><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preparation of Consolidated Financial Statements in accordance with GAAP involves the use of estimates and assumptions that affect the recorded amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  The accounting policies described below are considered to be critical accounting policies, due, in part, to their complexity and because their application is relevant and material to the financial position and results of operations of PG&amp;E Corporation and the Utility, and because these policies require the use of material judgments and estimates.  Actual results may differ substantially from these estimates.  These policies and their key characteristics are outlined below.</P>
<B>
<P>Regulatory Assets and Liabilities </P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation and the Utility account for the financial effects of regulation in accordance with SFAS No. 71.  SFAS No. 71 applies to regulated entities whose rates are designed to recover the cost of providing service.  SFAS No. 71 applies to all of the Utility's operations except for the operations of a natural gas pipeline.  During the first quarter of 2004, the Utility began reapplying SFAS No. 71 to its generation operations.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under SFAS No. 71, regulatory assets represent capitalized costs that otherwise would be charged to expense under GAAP.  These costs are later recovered through regulated rates.  Regulatory liabilities are created by rate actions of a regulator that will later be credited to customers through the ratemaking process.  Regulatory assets and liabilities are recorded when it is probable, as defined in SFAS No. 5, "Accounting for Contingencies," or SFAS No. 5, that these items will be recovered or reflected in future rates.  Determining probability requires significant judgment on the part of management and includes, but is not limited to, consideration of testimony presented in regulatory hearings, CPUC and FERC administrative law judge proposed decisions, final regulatory orders and the strength or status of applications for regulatory rehearings or state court appeals.  The Utility also maintains regulatory balancing accounts, which are comprised of sales and cost balancing accounts.  These balancing accounts are used to record the differences between revenues and costs that can be recovered through rates.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Utility determined that it could not apply SFAS No. 71 to its operations or, if under SFAS No. 71 it could not conclude that it is probable that revenues or costs would be recovered or reflected in future rates, the revenues or costs would be charged to income in the period in which they were incurred.  If it is determined that a regulatory asset is no longer probable of recovery in rates, then SFAS No. 71 requires that it be written off at that time.  At March 31, 2005, PG&amp;E Corporation and the Utility reported regulatory assets (including current regulatory balancing accounts receivable) of approximately $7.4 billion and regulatory liabilities (including current balancing accounts payable) of approximately $4.5 billion.</P>
</FONT>
<B><FONT SIZE=2><P>Unbilled Revenues </P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility records revenue as electricity and natural gas are delivered.  A portion of the revenue recognized has not yet been billed.  Unbilled revenues are determined by factoring an estimate of the electricity and natural gas load delivered with recent historical usage and rate patterns.  At March 31, 2005, the Utility had recorded approximately $500 million in unbilled revenues.</P>
</FONT>
<B><FONT SIZE=2><P>Environmental Remediation Liabilities </P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Given the complexities of the legal and regulatory environment regarding environmental laws, the process of estimating environmental remediation liabilities is a subjective one.  The Utility records a liability associated with environmental remediation activities when it is determined that remediation is probable, as defined in SFAS No. 5, and the cost can be estimated in a reasonable manner.  The liability can be based on many factors, including site investigations, remediation, operations, maintenance, monitoring and closure.  This liability is recorded at the lower range of estimated costs, unless a more objective estimate can be achieved.  The recorded liability is re-examined every quarter.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At March 31, 2005, the Utility's accrual for undiscounted environmental liability was approximately $408 million.  The Utility's undiscounted future costs could increase to as much as $571 million if other potentially responsible parties are not able to contribute to the settlement of these costs or the extent of contamination or necessary remediation is greater than anticipated.</P>

<B><P>Asset Retirement Obligations</P>

</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility accounts for its nuclear generation and certain fossil generation facilities under SFAS No. 143, "Accounting for Asset Retirement Obligations," or SFAS No. 143.  SFAS No. 143 requires that an asset retirement obligation be recorded at fair value in the period in which it is incurred if a reasonable estimate of fair value can be made.  In the same period, the associated asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset.  Rate-regulated entities may recognize regulatory assets or liabilities as a result of timing differences between the recognition of costs as recorded in accordance with SFAS No. 143 and costs recovered through the ratemaking process.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are uncertainties regarding the ultimate cost associated with retiring the assets the Utility has accounted for in accordance with SFAS No. 143.  These include, but are not limited to changes in assumed dates of decommissioning, regulatory requirements, technology, cost of labor, materials, and equipment.  At March 31, 2005, the Utility's estimated cost of retiring these assets was approximately $1.3 billion.</P>

<B><P>Pension and Other Postretirement Plans</P>

</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain employees and retirees of PG&amp;E Corporation and its subsidiaries participate in qualified and non-qualified non-contributory defined benefit pension plans.  Certain retired employees and their eligible dependents of PG&amp;E Corporation and its subsidiaries also participate in contributory medical plans, and certain retired employees participate in life insurance plans (referred to collectively as other benefits).  Amounts that PG&amp;E Corporation and the Utility recognize as costs and obligations to provide pension benefits under SFAS No.&nbsp;87, "Employers' Accounting for Pensions," and other benefits under SFAS&nbsp;No.&nbsp;106, "Employers Accounting for Postretirement Benefits other than Pensions," are based on a variety of factors.  These factors include the provisions of the plans, employee demographics and various actuarial calculations, assumptions and accounting mechanisms.  Because of the complexity of these calculations, the long-term nature of these obligations and the importance of the assumptions utilized, PG&amp;E Corporation's and the Utility's estimate of these costs and obligations is a critical accounting estimate.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with accounting rules, changes in benefit obligations associated with these assumptions may not be recognized as costs on the income statement.  Differences between actuarial assumptions and actual plan results are deferred and are amortized into cost only when the accumulated differences exceed 10% of the greater of the projected benefit obligation or the market-value of the related plan assets.  If necessary, the excess is amortized over the average remaining service period of active employees.  As such, significant portions of benefit costs recorded in any period may not reflect the actual level of cash benefits provided to plan participants.  Under SFAS No. 71, regulatory adjustments have been recorded in the Consolidated Statements of Income and Consolidated Balance Sheets of the Utility to reflect the difference between Utility pension expense or income for accounting purposes and Utility pension expense or income for ratemaking, which is based on a funding approach.  The CPUC has authorized the Utility to recover the costs associated with its other benefits for 1993 and beyond.  Recovery is based on the lesser of the amounts collected in rates or the annual contributions on a tax-deductible basis to the appropriate trusts.</P>

<B><P><A NAME="_ACCOUNTING_PRONOUNCEMENTS_ISSUED"></A>ACCOUNTING PRONOUNCEMENTS ISSUED BUT NOT YET ADOPTED</P>

</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Refer to Note 1 in the Notes to the Condensed Consolidated Financial Statements for further discussion.</P>
<B>
<P ALIGN="JUSTIFY"><A NAME="_TAXATION_MATTERS"></A>TAXATION MATTERS  </P>

</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Internal Revenue Service, or IRS, has completed its audit of PG&amp;E Corporation's 1997 and 1998 consolidated federal income tax returns and has assessed additional federal income taxes of approximately $81 million (including interest).  PG&amp;E Corporation has filed protests contesting certain adjustments made by the IRS in that audit and currently is discussing these adjustments with the IRS' Appeals Office.  PG&amp;E Corporation does not expect final resolution of these appeals to have a material impact on its financial position or results of operations.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the fourth quarter of 2003, PG&amp;E Corporation made an advance payment to the IRS of $75 million relating to the 1999 and 2000 audit.  The IRS completed its audit of PG&amp;E Corporation's 1999 and 2000 consolidated federal income tax returns during the third quarter of 2004.  As a result of the completion of this audit, PG&amp;E Corporation received a refund from the IRS of $14 million in January of 2005.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The IRS is auditing PG&amp;E Corporation's 2001 and 2002 consolidated federal income tax returns.  They have indicated that they plan to complete their audit and issue a Revenue Agent Report in the second or third quarter of 2005.  During their examination, the IRS has issued several proposed adjustments that PG&amp;E Corporation is currently disputing.  The IRS adjustments include disallowance of synthetic fuel credits claimed on these tax returns.  In addition, the IRS has proposed to disallow a number of deductions, the largest of which is abandonment losses/worthless deductions claimed on the 2002 tax return related to certain NEGT assets.  These assets were ultimately transferred to NEGT lenders in the third quarter of 2004.  If the IRS includes all of its proposed adjustments in the final Revenue Agent Report, the alleged tax deficiency would approximate $400 million.  Of this deficiency, approximately $104 million relates to the synthetic fuel credits.  The remaining $296 million is timing in nature and would reverse in future periods, generally in tax years 2003-2004.  PG&amp;E Corporation believes that it properly reported these transactions in its tax returns and will contest any IRS assessment.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation has accrued $52 million associated with NEGT related tax liabilities.  In addition, PG&amp;E Corporation has accrued a $49 million liability to cover potential tax obligations relating to non-NEGT issues on outstanding tax audits.  The Utility has accrued $63 million to cover potential tax obligations for outstanding tax audits.  Considering these reserves, PG&amp;E Corporation does not expect the resolution of these matters to have a material impact on its financial position or results of operations.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, based on preliminary information provided by NEGT, PG&amp;E Corporation anticipates paying approximately $86 million of federal income taxes on NEGT activities through the effective date of NEGT's plan of reorganization.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All IRS audits of PG&amp;E Corporation's federal income tax returns prior to 1997 have been closed.</P>
<B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><A NAME="_DV_M623"><A NAME="_DV_M624"><A NAME="_DV_M625"><A NAME="_DV_M626"><A NAME="_DV_M627"><A NAME="_DV_M628"><A NAME="_DV_M629"><A NAME="_DV_M631"><A NAME="_DV_M632"><A NAME="_DV_M635"><A NAME="add_security_mda"></A></A></A></A></A></A></A></A></A></A></A>ADDITIONAL SECURITY MEASURES</P>
<P ALIGN="JUSTIFY"></P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Various federal regulatory agencies have issued guidance and the NRC has issued orders regarding additional security measures to be taken at various facilities, including generation facilities, transmission substations and natural gas transportation facilities.  The guidance and the orders require additional capital investment and increased operating costs.  However, neither PG&amp;E Corporation nor the Utility believes that these costs will have a material impact on its respective consolidated financial position or results of operations.</P>

<B><P ALIGN="JUSTIFY"><A NAME="environmental_and_legal_matters"></A>ENVIRONMENTAL AND LEGAL MATTERS</P>
<P ALIGN="JUSTIFY"></P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation and the Utility are subject to laws and regulations established both to maintain and improve the quality of the environment.  Where PG&amp;E Corporation's and the Utility's properties contain hazardous substances, these laws and regulations may require PG&amp;E Corporation and the Utility to remove those substances or to remedy effects on the environment.  Also, in the normal course of business, PG&amp;E Corporation and the Utility are named as parties in a number of claims and lawsuits.  See Note 7 of the Notes to the Condensed Consolidated Financial Statements for further discussion.</P>

<B><P><A NAME="_Risks_Related_to"></A></P>
<P ALIGN="JUSTIFY"><A NAME="_ITEM_3:_"></A>ITEM 3:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</P>
</B></FONT>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PG&amp;E Corporation's and Pacific Gas and Electric Company's, or the Utility's, primary market risk results from changes in energy prices.  PG&amp;E Corporation and the Utility engage in price risk management, or PRM, activities for non-trading purposes only.  Both PG&amp;E Corporation and the Utility may engage in these PRM activities using forward contracts, futures, options, and swaps to hedge the impact of market fluctuations on energy commodity prices, interest rates, and foreign currencies.  (See the "Risk Management Activities" section included in Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations.)</P>
<B>
<P ALIGN="JUSTIFY"><A NAME="_ITEM_4._"></A>ITEM 4.  CONTROLS AND PROCEDURES</P>

</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Dutch801BT-Roman" SIZE=2>Based on an evaluation of PG&amp;E Corporation's and Pacific Gas and Electric Company's, or the Utility's, disclosure controls and procedures as of March 31, 2005, PG&amp;E Corporation's and the Utility's respective principal executive officers and principal financial officers have concluded that such controls and procedures are effective to ensure that information required to be disclosed by PG&amp;E Corporation and the Utility in reports the companies file or submit under the Securities and Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission rules and forms.</P>

</FONT><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT FACE="Dutch801BT-Roman" SIZE=2>As of January 1, 2004, PG&amp;E Corporation and the Utility adopted Financial Accounting Standards Board, or FASB, revision to FASB Interpretation No. 46, ''Consolidation of Variable Interest Entities,'' or FIN 46R. In accordance with FIN 46R, the Utility consolidated the assets, liabilities and non-controlling interests of low-income housing partnerships that were determined to be variable interest entities, or VIEs, under FIN 46R. PG&amp;E Corporation and the Utility do not have the legal right or authority to assess the internal controls of VIEs. Therefore, PG&amp;E Corporation's and the Utility's evaluation of disclosure controls and procedures performed as of March 31, 2005 did not include these entities in that evaluation. PG&amp;E Corporation and the Utility have not designed, established, or maintained disclosure controls and procedures for consolidated VIEs.</P>

</FONT><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There were no changes in internal controls over financial reporting that occurred during the quarter ended March 31, 2005, that have materially affected, or are reasonably likely to materially affect, PG&amp;E Corporation's or the Utility's internal controls over financial reporting.</P>
<B>
<P>&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">PART II.  OTHER INFORMATION</P>
</FONT>
<FONT SIZE=2><P ALIGN="CENTER"><A NAME="item_1_legal_proceedings"></A>ITEM 1.  LEGAL PROCEEDINGS</P>
</B></FONT>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For additional information regarding certain of the legal proceedings presented below, see Note 7 of the Notes to the Condensed Consolidated Financial Statements.</P>

<B><P>Pacific Gas and Electric Company Chapter 11 Filing</P>

</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The petitions for review of the CPUC's orders approving the Settlement Agreement that were filed by the City and County of San Francisco, or CCSF, and Aglet Consumer Alliance, or Aglet, remain pending at the California Court of Appeal.  Three California state senators have filed a brief in support of the CCSF and Aglet petitions. The California Court of Appeal has not yet acted on the petitions.  </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, two former CPUC commissioners who did not vote to approve the Settlement Agreement filed an appeal of the bankruptcy court's confirmation order with the U.S. District Court for the Northern District of California, or the District Court.  On July 15, 2004, the District Court dismissed their appeal.  The former commissioners have appealed the District Court's order with the U.S. Court of Appeals for the Ninth Circuit, or Ninth Circuit.  After briefing is complete, the Ninth Circuit will consider arguments by the Utility and the CPUC to dismiss the appeal.  On April 12, 2005, the District Court entered an order dismissing a second appeal of the confirmation order that had been filed by the City of Palo Alto, but which the City of Palo Alto subsequently had agreed to dismiss voluntarily.</P>
<P> </P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the bankruptcy court's confirmation order or the Settlement Agreement is overturned or modified on appeal, PG&amp;E Corporation's and the Utility's financial condition and results of operations, and the Utility's ability to pay dividends or otherwise make distributions to PG&amp;E Corporation, could be materially adversely affected.  </P>
</FONT><FONT FACE="Arial" SIZE=2>
</FONT><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Utility's Chapter 11 proceeding has been previously disclosed in PG&amp;E Corporation's and the Utility's combined 2004 Annual Report on Form 10-K in "Part I, Item 3: Legal Proceedings."  For additional information, see Note 2 of the Notes to the Condensed Consolidated Financial Statements.</P>

<B><P>Pacific Gas and Electric Company v. Michael Peevey, et al.</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For information regarding this matter, see "Part I, Item 3: Legal Proceedings" in PG&amp;E Corporation's and the Utility's combined 2004 Annual Report on Form 10-K.</P>

<B><P>In re: Natural Gas Royalties Qui Tam Litigation</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For information regarding this matter, see "Part I, Item 3: Legal Proceedings" in PG&amp;E Corporation's and the Utility's combined 2004 Annual Report on Form 10-K.</P>

<B><P>Diablo Canyon Power Plant</P>
</B><P ALIGN="JUSTIFY"></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For information regarding matters relating to the Diablo Canyon Power Plant, see PG&amp;E Corporation's and the Utility's combined 2004 Annual Report on Form 10-K.</P>

<B><P>Compressor Station Chromium Litigation</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As previously disclosed, the Utility has filed 14 summary judgment motions or motions in limine, which challenge plaintiffs' lack of admissible scientific evidence that chromium caused the injuries alleged by the test plaintiffs.  The Superior Court for the County of Los Angeles, or Superior Court, began hearing arguments on two of these motions in February 2004.  In February 2005, the Superior Court denied these two motions for summary judgment.  The Utility has filed motions for reconsideration of these orders with the Superior Court and also filed a request with the appellate court seeking to overturn or modify the orders because they are inconsistent with recent California appellate decisions concerning the admissibility of expert testimony and the requirements for proving medical causation.  After the motions for reconsideration and the request were filed, the California Supreme Court granted review of one of these recent appellate decisions.  On April 26, 2005, the Superior Court heard argument on the motions for reconsideration, but has not yet issued a decision.  For more information regarding the chromium litigation, see "Part I, Item 3: Legal Proceedings - Compressor Station Chromium Litigation" in PG&amp;E Corporation's and the Utility's combined 2004 Annual Report on Form 10-K and Note 7 to the Notes to the Condensed Consolidated Financial Statements.</P>

<B><P>Complaints Filed by the California Attorney General and the City and County of San Francisco</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At a case management conference held on March 18, 2005, the San Francisco Superior Court, or Superior Court, issued its final ruling on rejecting the "per victim" and "per [customer] bill" standards advocated by the plaintiffs to be applied in calculating the number of alleged violations of California Business and Professions Code Section 17200, or Section 17200.  The Superior Court found that the appropriate standard to be applied was the "per act" test, and that the acts alleged to violate Section 17200 are "transfers of assets to [PG&amp;E Corporation] from its utility subsidiary."  Such asset transfers were effected primarily through the Utility's payment of dividends to PG&amp;E Corporation and through share repurchases from the date of PG&amp;E Corporation's formation on January 1, 1997, through the end of 2000, when dividends were last paid.  </P>
</FONT><P ALIGN="JUSTIFY"></P>
<FONT FACE="Times" SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Also on March 18, the Superior Court ordered plaintiffs to provide a list of the transfers that they claim are unlawful, as well as the basis for their claim with respect to each transfer, at the next case management conference scheduled for May 10, 2005. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For more information regarding these cases, see "Part I, Item 3: Legal Proceedings" of PG&amp;E Corporation's and the Utility's combined 2004 Annual Report on Form 10-K.</P>
<B>
<P>&nbsp;</P>
<P ALIGN="CENTER"><A NAME="item_2_changes_in_securities"></A>ITEM 2.  CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES</P>

</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As previously disclosed, in connection with its entry into certain credit agreements, in June&nbsp;2002 and October&nbsp;2002, PG&amp;E Corporation issued warrants to purchase 5,066,931 shares of common stock of PG&amp;E Corporation at an exercise price of $0.01 per share.  During the quarter ended March 31, 2005, warrant holders exercised, on a net exercise basis, warrants to purchase 77,857 shares, and received 77,833 shares of PG&amp;E Corporation common stock.  As of March 31, 2005, warrant holders had exercised, on a net exercise basis, warrants to purchase 4,796,876 shares, and had received 4,795,123 shares of PG&amp;E Corporation common stock since the warrants were issued.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pacific Gas and Electric Company did not make any sales of unregistered equity securities during the quarter ended March 31, 2005, the period covered by this report.</P>

<B><I><P>Issuer Purchases of Equity Securities</P>
</B></I></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=727>
<TR><TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=1><P>Period</B></FONT></TD>
<TD WIDTH="21%" VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=1><P ALIGN="CENTER">Total Number of Shares Purchased</B></FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=1><P ALIGN="CENTER">Average Price Paid Per Share</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=1><P ALIGN="CENTER">Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs</B><SUP>(2)(3)</SUP></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="22%" VALIGN="BOTTOM" COLSPAN=3>
<B><FONT SIZE=1><P ALIGN="CENTER">Approximate Dollar Value of Shares that may yet be Purchased Under the Plans or Programs</B></FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="21%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#808080" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="19%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="CENTER">Preferred Stock</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="CENTER">Common Stock</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="CENTER">Preferred Stock</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="CENTER">Common Stock</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="CENTER">Preferred Stock</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="9%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="CENTER">Common Stock</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="CENTER">Preferred Stock</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="CENTER">Common<BR>
Stock</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0">
<FONT SIZE=1><P>January&nbsp;1 through January&nbsp;31, 2005</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">125,000 </FONT><SUP><FONT FACE="Times" SIZE=1>(1)</SUP></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="CENTER">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">25.39375</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">975,000,000</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=1><P>February&nbsp;1 through February 28, 2005</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="9%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="9%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="RIGHT">1,050,000,000</FONT></TD>
</TR>
<TR><TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#c0c0c0">
<FONT SIZE=1><P>March&nbsp;1 through March&nbsp;31, 2005</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">29,489,400&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">35.60&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">29,489,400</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=3>
<B><FONT SIZE=1><P>Total</B></FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="RIGHT">125,000&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="10%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="RIGHT">29,489,400&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="CENTER">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="RIGHT">25.39375</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="RIGHT">35.60&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="9%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="RIGHT">29,489,400</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="11%" VALIGN="BOTTOM">
<FONT SIZE=1><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=8>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2>&nbsp;</TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=8 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=8>&nbsp;</TD>
<TD WIDTH="11%" VALIGN="BOTTOM" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="2%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="8%" VALIGN="BOTTOM">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="BOTTOM" COLSPAN=2>&nbsp;</TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP">
<SUP><FONT FACE="Times" SIZE=2><P>(1)</SUP></FONT></TD>
<TD WIDTH="96%" VALIGN="TOP" COLSPAN=17>
<FONT SIZE=1><P>On January 31, 2005, pursuant to a mandatory sinking fund redemption provision, the Utility redeemed 125,000 shares of its 6.30% Series of First Preferred Stock.  The redemption price includes any accumulated and unpaid dividends existing as of the redemption date.</P>
<P ALIGN="JUSTIFY"></FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP">
<SUP><FONT FACE="Times" SIZE=2><P>(2)</SUP></FONT></TD>
<TD WIDTH="96%" VALIGN="TOP" COLSPAN=17>
<FONT SIZE=1><P>On September&nbsp;15, 2004, the PG&amp;E Corporation Board of Directors authorized the Corporation and its subsidiaries to repurchase shares of PG&amp;E Corporation's common stock with an aggregate purchase price not to exceed PG&amp;E Corporation's net cash proceeds from sales of PG&amp;E Corporation's common stock upon exercise of options granted under PG&amp;E Corporation's Stock Option Plan. The program was publicly announced in a Form&nbsp;8-K filed by PG&amp;E Corporation on October&nbsp;14, 2004. Repurchases may be made from time until the program expires on December&nbsp;31, 2005. Amounts remaining under this program are not determinable as PG&amp;E Corporation cannot predict how many options will be exercised before December&nbsp;31, 2005.</P>
<P ALIGN="JUSTIFY"></FONT></TD>
</TR>
<TR><TD WIDTH="4%" VALIGN="TOP">
<SUP><FONT FACE="Times" SIZE=2><P>(3)&nbsp;</SUP></FONT></TD>
<TD WIDTH="96%" VALIGN="TOP" COLSPAN=17>
<FONT SIZE=1><P>On December&nbsp;15, 2004, PG&amp;E Corporation's Board of Directors authorized the repurchase of up to $975&nbsp;million of its outstanding common stock.  The program was publicly announced in a Form&nbsp;8-K filed by PG&amp;E Corporation on December&nbsp;16, 2004.  On February&nbsp;16, 2005, the Board of Directors of PG&amp;E Corporation increased the repurchase authorization to $1.05&nbsp;billion with such repurchases to be effected from time to time, but no later than June&nbsp;30, 2006.  As disclosed in a Form&nbsp;8-K filed on March 4, 2005, PG&amp;E Corporation entered into accelerated share repurchase arrangements with a broker on March 4, 2005, under which PG&amp;E Corporation repurchased 29,489,400 shares for an aggregate purchase price of approximately $1.05 billion.  For further information, see the "Liquidity and Financial Resources" section included in Part I, Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations. </FONT></TD>
</TR>
</TABLE>

<B><FONT SIZE=2>
<P>&nbsp;</P>
<P ALIGN="CENTER"><A NAME="item_4_submission_of_matters"></A>ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</P>

<P ALIGN="JUSTIFY">PG&amp;E Corporation: </P>
</B><P><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April 20, 2005, PG&amp;E Corporation held its annual meeting of shareholders.  At the meeting, the shareholders voted as indicated below on the following matters: </P>
<P ALIGN="JUSTIFY"></P>
<P>1.&nbsp;&nbsp;Election of the following directors to serve until the next annual meeting of shareholders or until their successors are elected and qualified (included as Item 1 in the proxy statement): <BR>
</P></FONT>
<P ALIGN="LEFT"><TABLE CELLSPACING=0 BORDER=0 WIDTH=436>
<TR><TD WIDTH="56%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">For</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Withheld</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP">
<FONT SIZE=2><P>David R. Andrews</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">299,848,011</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">7,547,101</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP">
<FONT SIZE=2><P>Leslie S. Biller </FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">299,930,742</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">7,464,370</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP">
<FONT SIZE=2><P>David A. Coulter</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">230,734,940</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">76,660,172</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP">
<FONT SIZE=2><P>C. Lee Cox</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">298,746,220</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">8,648,892</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP">
<FONT SIZE=2><P>Peter A. Darbee</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">299,920,605</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">7,474,507</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP">
<FONT SIZE=2><P>Robert D. Glynn, Jr.</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">297,333,005</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">10,062,107</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP">
<FONT SIZE=2><P>Mary S. Metz</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">299,595,454</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">7,799,658</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP">
<FONT SIZE=2><P>Barbara L. Rambo</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">298,729,457</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">8,665,655</FONT></TD>
</TR>
<TR><TD WIDTH="56%" VALIGN="TOP">
<FONT SIZE=2><P>Barry Lawson Williams</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">297,680,081</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">9,715,031</FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2>
<P>2.&nbsp;&nbsp;Ratification of the appointment of Deloitte &amp; Touche LLP as independent public accountants for 2005 (included as Item 2 in the proxy statement): </P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="LEFT"><TABLE CELLSPACING=0 BORDER=0 WIDTH=264>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=2><P>For:</FONT></TD>
<TD WIDTH="45%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">301,591,184</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=2><P>Against:</FONT></TD>
<TD WIDTH="45%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">2,895,809</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=2><P>Abstain:</FONT></TD>
<TD WIDTH="45%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">2,908,119</FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P><BR>
This proposal was approved by a majority of the shares represented and voting (including abstentions) with respect to this proposal, which shares voting affirmatively also constituted a majority of the required quorum. </P>

<P>3.&nbsp;&nbsp;Consideration of management's proposal regarding the adoption of a new long-term incentive plan (included as Item 3 in the proxy statement): </P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="LEFT"><TABLE CELLSPACING=0 BORDER=0 WIDTH=360>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>For:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">222,208,088</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Against:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">33,828,404</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Abstain:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">4,284,940</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Broker non-vote <SUP>(1)</SUP>:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">47,073,680</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P><BR>
This management proposal was approved by a majority of the shares represented and voting (including abstentions but excluding broker non-votes) with respect to the proposal, which shares voting affirmatively also constituted a majority of the required quorum. </P>
<P ALIGN="JUSTIFY"></P>
<P>4.&nbsp;&nbsp;Consideration of a shareholder proposal regarding the expensing of stock options (included as Item 4 in the proxy statement): </P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="LEFT"><TABLE CELLSPACING=0 BORDER=0 WIDTH=360>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>For:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">114,642,888</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Against:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">138,186,945</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Abstain:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">7,491,599</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Broker non-vote <SUP>(1)</SUP>:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">47,073,680</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2>
<P>This shareholder proposal was not approved, as the number of shares voting affirmatively on the proposal constituted less than a majority of the shares represented and voting (including abstentions but excluding broker non-votes) with respect to the proposal.</P>
<P ALIGN="JUSTIFY"></P>
<P>5.&nbsp;&nbsp;Consideration of a shareholder proposal regarding radioactive wastes (included as Item 5 in the proxy statement): </P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="LEFT"><TABLE CELLSPACING=0 BORDER=0 WIDTH=360>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>For:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">9,194,928</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Against:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">225,080,468</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Abstain:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">26,046,036</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Broker non-vote <SUP>(1)</SUP>:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">47,073,680</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2>
<P>This shareholder proposal was not approved, as the number of shares voting affirmatively on the proposal constituted less than a majority of the shares represented and voting (including abstentions but excluding broker non-votes) with respect to the proposal.</P>
<P ALIGN="JUSTIFY"></P>
<P>6.&nbsp;&nbsp;Consideration of a shareholder proposal regarding poison pills (included as Item 6 in the proxy statement): </P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="LEFT"><TABLE CELLSPACING=0 BORDER=0 WIDTH=360>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>For:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">73,493,699</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Against:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">180,191,178</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Abstain:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">6,636,555</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Broker non-vote <SUP>(1)</SUP>:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">47,073,680</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P>This shareholder proposal was not approved, as the number of shares voting affirmatively on the proposal constituted less than a majority of the shares represented and voting (including abstentions but excluding broker non-votes) with respect to the proposal.</P>
<P ALIGN="JUSTIFY"></P>
<P>7.&nbsp;&nbsp;Consideration of a shareholder proposal regarding performance-based options (included as Item 7 in the proxy statement): </P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="LEFT"><TABLE CELLSPACING=0 BORDER=0 WIDTH=360>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>For:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">99,406,293</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Against:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">154,791,718</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Abstain:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">6,123,421</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Broker non-vote <SUP>(1)</SUP>:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">47,073,680</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P>This shareholder proposal was not approved, as the number of shares voting affirmatively on the proposal constituted less than a majority of the shares represented and voting (including abstentions but excluding broker non-votes) with respect to the proposal.</P>
<P ALIGN="JUSTIFY"></P>
<P>8.&nbsp;&nbsp;Consideration of a shareholder proposal regarding future golden parachutes (included as Item 8 in the proxy statement): </P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="LEFT"><TABLE CELLSPACING=0 BORDER=0 WIDTH=360>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>For:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">142,467,316</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Against:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">113,113,566</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Abstain:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">4,740,550</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>Broker non-vote <SUP>(1)</SUP>:</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">47,073,680</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP">&nbsp;</TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P>This shareholder proposal was approved by a majority of the shares represented and voting (including abstentions but excluding broker non-votes) with respect to the proposal, which shares voting affirmatively also constituted a majority of the required quorum. </P>
<DIR>

</FONT><SUP><FONT FACE="Times" SIZE=2><P>(1)</SUP></FONT><FONT SIZE=2> A non-vote occurs when brokers or nominees have voted on some of the matters to be acted on at a meeting, but do not vote on certain other matters because, under the rules of the New York Stock Exchange, they are not allowed to vote on those other matters without instructions from the beneficial owner of the shares.  Broker non-votes are counted when determining whether the necessary quorum of shareholders is present or represented at each annual meeting.  </P>
<B></DIR>

<P>Pacific Gas and Electric Company:</P>

</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April 20, 2005, Pacific Gas and Electric Company, or the Utility, held its annual meeting of shareholders.  Shares of capital stock of Pacific Gas and Electric Company consist of shares of common stock and shares of first preferred stock.  As PG&amp;E Corporation and a subsidiary own all of the outstanding shares of common stock, they hold approximately 95% of the combined voting power of the outstanding capital stock of the Utility.  PG&amp;E Corporation and the subsidiary voted all of their respective shares of common stock for the nominees named in the 2005 joint proxy statement and for the ratification of the appointment of Deloitte &amp; Touche LLP as independent public accountants for 2005.  The balance of the votes shown below was cast by holders of shares of first preferred stock.  At the annual meeting, the shareholders voted as indicated below on the following matters: </P>

<P>1.&nbsp;&nbsp;Election of the following directors to serve until the next annual meeting of shareholders or until their successors are elected and qualified (included as Item 1 in the proxy statement): </P>
</FONT>
<P ALIGN="LEFT"><TABLE CELLSPACING=0 BORDER=0 WIDTH=424>
<TR><TD WIDTH="58%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">For</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Withheld</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<FONT SIZE=2><P>David R. Andrews</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">335,101,496</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">134,171</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<FONT SIZE=2><P>Leslie S. Biller</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">335,093,610</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">142,057</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<FONT SIZE=2><P>David A. Coulter</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">334,812,805</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">422,862</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<FONT SIZE=2><P>C. Lee Cox</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">335,097,258</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">138,409</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<FONT SIZE=2><P>Peter A. Darbee</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">335,098,109</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">137,558</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<FONT SIZE=2><P>Robert D. Glynn, Jr.</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">335,092,033</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">143,634</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<FONT SIZE=2><P>Mary S. Metz</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">335,086,883</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">148,784</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<FONT SIZE=2><P>Barbara L. Rambo</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">335,087,579</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">148,088</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<FONT SIZE=2><P>Gordon R. Smith</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">335,098,589</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">137,078</FONT></TD>
</TR>
<TR><TD WIDTH="58%" VALIGN="TOP">
<FONT SIZE=2><P>Barry Lawson Williams</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">335,090,698</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">144,969</FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2>
<P>2.&nbsp;&nbsp;Ratification of the appointment of Deloitte &amp; Touche LLP as independent public accountants for 2005 (included as Item 2 in the proxy statement): </P>
<P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="LEFT"><TABLE CELLSPACING=0 BORDER=0 WIDTH=360>
<TR><TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P>For:</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">335,126,354</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P>Against:</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">43,606</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P>Abstain:</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">65,707</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">&nbsp;</TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P><BR>
This proposal was approved by a majority of the shares represented and voting (including abstentions) with respect to this proposal, which shares voting affirmatively also constituted a majority of the required quorum. </P>
<B>
<P>&nbsp;</P>
<P ALIGN="CENTER"><A NAME="other_information"></A>ITEM 5.  OTHER INFORMATION</P>

</B><P>Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pacific Gas and Electric Company, or the Utility's, earnings to fixed charges ratio for the three months ended March 31, 2005, was 3.27.  The Utility's earnings to combined fixed charges and preferred stock dividends ratio for the three months ended March 31, 2005, was 3.09.  The statement of the foregoing ratios, together with the statements of the computation of the foregoing ratios filed as Exhibits 12.1 and 12.2 hereto, are included herein for the purpose of incorporating such information and exhibits into the Utility's Registration Statement Nos. 33-62488 and 333-109994 relating to various series of the Utility's first preferred stock and its senior secured bonds, respectively.</P>
<B>
<P>&nbsp;</P>
<P ALIGN="CENTER"><A NAME="item_6_exhibits"></A>ITEM 6.  EXHIBITS</P>
</B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=658>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">4.1</FONT></TD>
<TD WIDTH="89%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Indenture, dated as of April 22, 2005, supplementing, amending and restating the Indenture of Mortgage, dated as of March 11, 2004, as supplemented by a First Supplemental Indenture, dated as of March 23, 2004, and a Second Supplemental Indenture, dated as of April 12, 2004, between Pacific Gas and Electric Company and The Bank of New York Trust Company, N.A. </P>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.1</FONT></TD>
<TD WIDTH="89%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Master Confirmation dated March 4, 2005, for accelerated share repurchase arrangements between PG&amp;E Corporation and Goldman, Sachs &amp; Co.</P>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.2</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>First Amendment, dated as of April 8, 2005, to the Credit Agreement dated as of December 10, 2004 (previously filed with PG&amp;E Corporation's and Pacific Gas and Electric Company's Form 8-K filed December&nbsp;15, 2004 (File No.&nbsp;1-12609 and File No.&nbsp;1-2348), Exhibit&nbsp;99), among PG&amp;E Corporation, BNP Paribas, as administrative agent and a lender, Deutsche Bank Securities Inc., as syndication agent and a lender, ABN Amro Bank, N.V., Goldman Sachs Credit Partners L.P., and Union Bank of California, N.A., as documentation agents and lenders, and the following other lenders: Barclays Bank PLC, Citicorp USA, Inc., Deutsche Bank AG New York Branch, JP Morgan Chase Bank, N.A., Lehman Brothers Bank, FSB, Morgan Stanley Bank, Royal Bank of Canada, The Bank of Nova Scotia, KBC Bank N.V., and The Bank of New York</P>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.3</FONT></TD>
<TD WIDTH="89%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Credit Agreement dated as of April 8, 2005, among Pacific Gas and Electric Company, Citicorp North America, Inc., as administrative agent and a lender, JP Morgan Chase Bank, N.A., as syndication agent and a lender, Barclays Bank PLC, BNP Paribas and Deutsche Bank Securities Inc., as documentation agents and lenders, ABN Amro Bank N.V., Lehman Brothers Bank, FSB, Mellon Bank, N.A., Royal Bank of Canada, The Bank of New York, The Bank of Nova Scotia, UBS Loan Finance LLC, and Union Bank of California, N.A., as senior managing agents, and KBC Bank, NV, Morgan Stanley Bank and William Street Commitment Corporation, as lenders </P>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.4*</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>PG&amp;E Corporation 2006 Long-Term Incentive Plan, effective as of January 1, 2006 (incorporated by reference to PG&amp;E Corporation's and Pacific Gas and Electric Company's Form 8-K filed April 25, 2005 (File No. 1-12609 and File No.&nbsp;1-2348), Exhibit 99)</P>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">11</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Computation of Earnings Per Common Share<BR>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">12.1</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Computation of Ratios of Earnings to Fixed Charges for Pacific Gas and Electric Company<BR>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">12.2</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Computation of Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends for Pacific Gas and Electric Company<BR>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=43>
<FONT SIZE=2><P ALIGN="CENTER">31.1</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP" HEIGHT=43>
<FONT SIZE=2><P>Certifications of the Chief Executive Officer and the Chief Financial Officer of PG&amp;E Corporation required by Section 302 of the Sarbanes-Oxley Act of 2002<BR>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">31.2</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Certifications of the Chief Executive Officer and the Chief Financial Officer of Pacific Gas and Electric Company required by Section 302 of the Sarbanes-Oxley Act of 2002<BR>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=9>
<FONT SIZE=2><P ALIGN="CENTER">32.1**</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP" HEIGHT=9>
<FONT SIZE=2><P>Certifications of the Chief Executive Officer and the Chief Financial Officer of PG&amp;E Corporation required by Section 906 of the Sarbanes-Oxley Act of 2002<BR>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">32.2**</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Certifications of the Chief Executive Officer and the Chief Financial Officer of Pacific Gas and Electric Company required by Section 906 of the Sarbanes-Oxley Act of 2002<BR>
</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>* Management contract or compensatory agreement</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>** Pursuant to Item 601(b)(32) of SEC Regulation S-K, these exhibits are furnished rather than filed with this report.   </FONT></TD>
</TR>
</TABLE>


<FONT SIZE=2><P ALIGN="CENTER"><A NAME="_ITEM_1._"><A NAME="_ITEM_2._"><A NAME="_ITEM_3._"><A NAME="_ITEM_4.__1"><A NAME="_ITEM_5._"><A NAME="_ITEM_6._"></A></A></A></A></A></A></P>
<B><P ALIGN="CENTER"><A NAME="_SIGNATURES"></A>SIGNATURES</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this Quarterly Report on Form 10-Q to be signed on their behalf by the undersigned thereunto duly authorized.</P>

<P>&nbsp;</P></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 WIDTH=331>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P>PG&amp;E CORPORATION</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P>CHRISTOPHER P. JOHNS</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" HEIGHT=46>
<FONT SIZE=2><P>Christopher P. Johns<BR>
Senior Vice President and Controller<BR>
(duly authorized officer and principal accounting officer)</FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2>
<P>&nbsp;</P></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 WIDTH=331>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P>PACIFIC GAS AND ELECTRIC COMPANY</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P>DINYAR B. MISTRY</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" HEIGHT=42>
<FONT SIZE=2><P>Dinyar B. Mistry<BR>
Vice President and Controller<BR>
(duly authorized officer and principal accounting officer)</FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>Dated:  May 4, 2005</P>
<B><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">EXHIBIT INDEX</P>
</B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=658>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">4.1</FONT></TD>
<TD WIDTH="89%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Indenture, dated as of April 22, 2005, supplementing, amending and restating the Indenture of Mortgage, dated as of March 11, 2004, as supplemented by a First Supplemental Indenture, dated as of March 23, 2004, and a Second Supplemental Indenture, dated as of April 12, 2004, between Pacific Gas and Electric Company and The Bank of New York Trust Company, N.A.</P>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.1</FONT></TD>
<TD WIDTH="89%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Master Confirmation dated March 4, 2005, for accelerated share repurchase arrangements between PG&amp;E Corporation and Goldman, Sachs &amp; Co.</P>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.2</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>First Amendment, dated as of April 8, 2005, to the Credit Agreement dated as of December 10, 2004 (previously filed with PG&amp;E Corporation's and Pacific Gas and Electric Company's Form 8-K filed December&nbsp;15, 2004 (File No.&nbsp;1-12609 and File No.&nbsp;1-2348), Exhibit&nbsp;99), among PG&amp;E Corporation, BNP Paribas, as administrative agent and a lender, Deutsche Bank Securities Inc., as syndication agent and a lender, ABN Amro Bank, N.V., Goldman Sachs Credit Partners L.P., and Union Bank of California, N.A., as documentation agents and lenders, and the following other lenders: Barclays Bank PLC, Citicorp USA, Inc., Deutsche Bank AG New York Branch, JP Morgan Chase Bank, N.A., Lehman Brothers Bank, FSB, Morgan Stanley Bank, Royal Bank of Canada, The Bank of Nova Scotia, KBC Bank N.V., and The Bank of New York</P>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.3</FONT></TD>
<TD WIDTH="89%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Credit Agreement dated as of April 8, 2005, among Pacific Gas and Electric Company, Citicorp North America, Inc., as administrative agent and a lender, JP Morgan Chase Bank, N.A., as syndication agent and a lender, Barclays Bank PLC, BNP Paribas and Deutsche Bank Securities Inc., as documentation agents and lenders, ABN Amro Bank N.V., Lehman Brothers Bank, FSB, Mellon Bank, N.A., Royal Bank of Canada, The Bank of New York, The Bank of Nova Scotia, UBS Loan Finance LLC, and Union Bank of California, N.A., as senior managing agents, and KBC Bank, NV, Morgan Stanley Bank and William Street Commitment Corporation, as lenders </P>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">10.4*</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>PG&amp;E Corporation 2006 Long-Term Incentive Plan, effective as of January 1, 2006 (incorporated by reference to PG&amp;E Corporation's and Pacific Gas and Electric Company's Form 8-K filed April 25, 2005 (File No. 1-12609 and File No.&nbsp;1-2348), Exhibit 99)</P>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">11</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Computation of Earnings Per Common Share<BR>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">12.1</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Computation of Ratios of Earnings to Fixed Charges for Pacific Gas and Electric Company<BR>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">12.2</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Computation of Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends for Pacific Gas and Electric Company<BR>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=43>
<FONT SIZE=2><P ALIGN="CENTER">31.1</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP" HEIGHT=43>
<FONT SIZE=2><P>Certifications of the Chief Executive Officer and the Chief Financial Officer of PG&amp;E Corporation required by Section 302 of the Sarbanes-Oxley Act of 2002<BR>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">31.2</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Certifications of the Chief Executive Officer and the Chief Financial Officer of Pacific Gas and Electric Company required by Section 302 of the Sarbanes-Oxley Act of 2002<BR>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=9>
<FONT SIZE=2><P ALIGN="CENTER">32.1**</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP" HEIGHT=9>
<FONT SIZE=2><P>Certifications of the Chief Executive Officer and the Chief Financial Officer of PG&amp;E Corporation required by Section 906 of the Sarbanes-Oxley Act of 2002<BR>
</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">32.2**</FONT></TD>
<TD WIDTH="89%" VALIGN="TOP">
<FONT SIZE=2><P>Certifications of the Chief Executive Officer and the Chief Financial Officer of Pacific Gas and Electric Company required by Section 906 of the Sarbanes-Oxley Act of 2002<BR>
</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>* Management contract or compensatory agreement</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>** Pursuant to Item 601(b)(32) of SEC Regulation S-K, these exhibits are furnished rather than filed with this report.   </FONT></TD>
</TR>
</TABLE>

<B><FONT SIZE=2></B></FONT></BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>2
<FILENAME>q105_ex4-1.htm
<DESCRIPTION>EXHIBIT 4.1
<TEXT>
<html>
<head>
<title>AMENDED AND RESTATED INDENTURE OF MORTGAGE (this "Restated
Indenture"), dated as of April 22, 2005 (the "execution
Date)</title>
</head>
<body link="blue" vlink="purple">
<div>
<p align="right"><b>Exhibit 4.1</b></p>

<p align="center"><font size="3" face=
"Times New Roman">________________________________________________________</font></p>

<p align="center"><b><font size="3" face=
"Times New Roman">INDENTURE</font></b></p>

<p align="center"><b><font size="3" face="Times New Roman">Dated as
of April 22, 2005</font></b></p>

<p align="center"><b><font size="3" face=
"Times New Roman">Supplementing, Amending and Restating<br />
the Indenture of Mortgage, dated as of March 11, 2004, as
supplemented<br />
by a First Supplemental Indenture, dated as of March 23, 2004, and
a Second<br />
Supplemental Indenture, dated as of April 12, 2004</font></b></p>

<p align="center"><b><font size="3" face="Times New Roman">PACIFIC
GAS AND ELECTRIC COMPANY,<br />
Issuer</font></b></p>

<p align="center"><b><font size="3" face=
"Times New Roman">and</font></b></p>

<p align="center"><b><font size="3" face="Times New Roman">THE BANK
OF NEW YORK TRUST COMPANY, N.A.,<br />
Trustee</font></b></p>

<p align="center"><b><font size="3" face=
"Times New Roman">_______________________</font></b></p>

<p align="center"><b><font size="3" face=
"Times New Roman">________________________________________________________</font></b></p>

<div align="center"><font size="3" face="Times New Roman"></font>
<hr size="2" width="100%" align="center" />
</div>

<p align="center"><b><font size="3" face="Times New Roman">TABLE OF
CONTENTS<br clear="all" />
</font></b></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p align="right"><b><u><font size="3" face=
"Times New Roman">Page</font></u></b></p>
</td>
</tr>

<tr>
<td valign="top">
<p><a name="mpTableOfContents"><font size="3" face=
"Times New Roman">ARTICLE I.</font></a></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">DEFINITIONS AND OTHER
PROVISIONS OF GENERAL<br />
 APPLICATION..................................................................................................</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face="Times New Roman"><br />
 2</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 1.01</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">General
Definitions.......................................................................................</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face="Times New Roman">2</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 1.02</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Compliance Certificates
and
Opinions...........................................................</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">17</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 1.03</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Content and Form of
Documents Delivered to
Trustee..................................</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">18</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 1.04</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Acts of
Holders............................................................................................</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">19</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 1.05</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Notices, Etc. to Trustee
and
Company.........................................................</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">21</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 1.06</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Notice to Holders of
Bonds;
Waiver.............................................................</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">22</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 1.07</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Conflict With Trust
Indenture
Act.................................................................</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">22</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 1.08</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Effect of Headings and
Table of
Contents.....................................................</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">22</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 1.09</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Successors and
Assigns................................................................................</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">22</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 1.10</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Separability
Clause.......................................................................................</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">23</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 1.11.</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Benefits of
Indenture....................................................................................</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">23</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 1.12</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Governing
Law............................................................................................</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">23</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 1.13</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Legal
Holidays.............................................................................................</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">23</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 1.14</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Investment of Cash Held by
Trustee.............................................................</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">23</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">ARTICLE II.</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">BOND
FORMS..................................................................................................</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">24</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="668">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 2.01</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Forms
Generally..........................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">24</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 2.02</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Form of Trustee&rsquo;s
Certificate of
Authentication.............................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">24</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="667">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">&nbsp;ARTICLE
III.</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">THE
BONDS......................................................................................................</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">24</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="668">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 3.01</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Amount Unlimited; Issuable
in
Series............................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">25</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 3.02</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Denominations.............................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">28</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 3.03</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Execution, Dating,
Certificate of
Authentication.............................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">28</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 3.04</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Temporary
Bonds........................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">29</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 3.05</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Registration, Registration
of Transfer and
Exchange......................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">30</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 3.06</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Mutilated, Destroyed, Lost
and Stolen
Bonds...............................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">32</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 3.07</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Payment of Interest;
Interest Rights
Preserved..............................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">33</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 3.08</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Persons Deemed
Owners............................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">34</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 3.09</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Cancellation by Bond
Registrar....................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">34</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 3.10</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Computation of
Interest...............................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">34</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 3.11.</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Payment to Be in Proper
Currency...............................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">35</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 3.12.</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">CUSIP
Numbers.........................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">35</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 3.13.</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Global
Bonds..............................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">35</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">&nbsp;ARTICLE
IV</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">BONDS PREVIOUSLY
ISSUED.......................................................................</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">36</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 4.01</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Continuation of Certain
Series of Bonds Issued Under the Prior Indenture.....</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">36</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 4.02</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Bonds of the Initial
Series; Terms of Bonds of the Initial
Series......................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">36</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 4.03</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Redemption of Bonds of the
Initial
Series.....................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">39</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 4.04</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Bonds of the Eleventh
Series, Terms of Bonds of the Eleventh
Series............</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">40</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">&nbsp;ARTICLE V</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">ISSUANCE OF
BONDS....................................................................................</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">42</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 5.01</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">General.......................................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">42</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">&nbsp;ARTICLE
VI</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">REDEMPTION OF
BONDS..............................................................................</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">43</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 6.01</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Applicability of
Article.................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">43</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 6.02</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Election to Redeem; Notice
to
Trustee.........................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">44</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 6.03</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Selection of Bonds to Be
Redeemed............................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">44</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 6.04</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Notice of
Redemption..................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">44</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 6.05</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Bonds Payable on
Redemption
Date............................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">46</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 6.06</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Bonds Redeemed in
Part.............................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">46</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">&nbsp;ARTICLE
VII</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">COVENANTS....................................................................................................</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">46</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 7.01</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Payment of
Bonds.......................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">46</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 7.02</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Maintenance of Office or
Agency.................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">46</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 7.03</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Money for Bond Payments to
Be Held in
Trust.............................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">47</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 7.04</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Corporate
Existence....................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">48</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 7.05</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Waiver of Certain
Covenants.......................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">48</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 7.06</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Annual Officer&rsquo;s
Certificate as to
Compliance...............................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">49</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 7.07</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Limitation on
Liens.......................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">49</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">&nbsp;ARTICLE
VIII..</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">SATISFACTION AND
DISCHARGE...............................................................</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">51</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 8.01</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Satisfaction and Discharge
of
Bonds.............................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">51</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 8.02</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Satisfaction and Discharge
of
Indenture........................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">53</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 8.03</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Application of Trust
Money.........................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">54</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">&nbsp;ARTICLE
IX.</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">EVENTS OF DEFAULT;
REMEDIES................................................................</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">54</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 9.01</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Events of
Default.........................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">54</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 9.02</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Acceleration of Maturity;
Rescission and
Annulment.....................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">56</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 9.03</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Collection of Indebtedness
and Suits for Enforcement by Trustee..................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">57</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 9.04</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Application of Money
Collected...................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">57</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 9.05</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Trustee May File Proofs of
Claim.................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">58</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 9.06</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Trustee May Enforce Claims
Without Possession of Bonds...........................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">58</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 9.07</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Limitation on
Suits.......................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">59</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 9.08</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Unconditional Right of
Holders to Receive Principal, Premium and Interest....</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">59</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 9.09</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Restoration of Rights and
Remedies.............................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">59</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 9.10</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Rights and Remedies
Cumulative..................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">60</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 9.11</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Delay or Omission Not
Waiver....................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">60</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 9.12</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Control by Holders of
Bonds.......................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">60</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 9.13</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Waiver of Past
Defaults...............................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">60</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 9.14</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Undertaking for
Costs..................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">61</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 9.15</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Waiver of Stay and
Extension
Laws.............................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">61</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">&nbsp;ARTICLE X</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">THE
TRUSTEE...................................................................................................</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">61</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Section&nbsp;10.01</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Certain Duties and
Responsibilities...............................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">61</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Section&nbsp;10.02</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Notice of
Defaults........................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">62</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Section&nbsp;10.03</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Certain Rights of
Trustee..............................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">63</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Section&nbsp;10.04</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Not Responsible for
Recitals or Issuance of Bonds or Application of
Proceeds.....................................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman"><br />
 64</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Section&nbsp;10.05</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">May Hold
Bonds.........................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">64</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Section&nbsp;10.06</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Money Held in
Trust....................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">64</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Section&nbsp;10.07</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Compensation and
Reimbursement...............................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">64</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Section&nbsp;10.08</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Disqualification;
Conflicting
Interests.............................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">65</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Section&nbsp;10.09</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Corporate Trustee
Required;
Eligibility.........................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">65</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Section&nbsp;10.10</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Resignation and Removal;
Appointment of
Successor...................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">66</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Section&nbsp;10.11</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Acceptance of Appointment
by
Successor...................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">67</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Section&nbsp;10.12</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Merger, Conversion,
Consolidation or Succession to
Business......................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">68</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Section&nbsp;10.13</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Preferential Collection of
Claims Against
Company.......................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">68</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Section&nbsp;10.14</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Co-Trustees and Separate
Trustees.............................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">68</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Section&nbsp;10.15</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Appointment of
Authenticating
Agent...........................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">69</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Section&nbsp;10.16</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Further
Assurances......................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">71</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">ARTICLE XI</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">LISTS OF HOLDERS; REPORTS
BY TRUSTEE AND COMPANY...............</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">71</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 11.01</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Lists of
Holders...........................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">71</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 11.02</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Reports by Trustee and
Company................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">72</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">&nbsp;ARTICLE
XII....</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">CONSOLIDATION, MERGER,
CONVEYANCE OR OTHER TRANSFER...</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">72</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="668">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 12.01</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Company May Consolidate,
etc., Only on Certain Terms.............................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">72</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 12.02</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Successor Corporation
Substituted..............................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">73</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 12.03</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Property of Successor
Corporation..............................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">73</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 12.04</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Release of Company Upon
Conveyance or Other Transfer...........................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">74</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 12.05</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Merger Into
Company.................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">74</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">&nbsp;ARTICLE
XIII.</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">SUPPLEMENTAL
INDENTURES.....................................................................</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">74</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 13.01.</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Supplemental Indentures
Without Consent of
Holders...................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">74</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 13.02</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Supplemental Indentures
With Consent of
Holders.......................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">76</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 13.03</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Execution of Supplemental
Indentures..........................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">78</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 13.04</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Effect of Supplemental
Indentures................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">78</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 13.05</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Conformity With Trust
Indenture
Act...........................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">78</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 13.06</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Reference in Bonds to
Supplemental
Indentures............................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">78</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 13.07</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Modification Without
Supplemental
Indenture...............................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">78</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">ARTICLE XIV</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">MEETINGS OF HOLDERS;
ACTION WITHOUT MEETING.........................</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">79</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Section&nbsp;14.01</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Purposes for Which
Meetings May Be
Called..............................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">79</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 14.02</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Call, Notice and Place of
Meetings..............................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">79</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 14.03</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Persons Entitled to Vote
at
Meetings............................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">80</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 14.04</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Quorum;
Action.................................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">80</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 14.05</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Attendance at Meetings;
Determination of Voting Rights; Conduct and Adjournment of
Meetings...................................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">81</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 14.06</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Counting Votes and
Recording Action of
Meetings.......................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">82</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 14.07</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Action Without
Meeting...............................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">82</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">ARTICLE&nbsp;&nbsp;XV</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">IMMUNITY OF INCORPORATORS,
STOCKHOLDERS, OFFICERS AND
DIRECTORS......................................................................................................</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">82</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Section 15.01</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Liability Solely
Corporate............................................................................</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">82</font></p>
</td>
</tr>
</table>

<div align="center"><font size="3" face="Times New Roman"></font>
<hr size="2" width="100%" align="center" />
</div>

<p><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INDENTURE</font></b>
(this &ldquo;Indenture&rdquo;), dated as of April 22, 2005 between
<b>PACIFIC GAS AND ELECTRIC COMPANY</b>, a corporation duly
organized and existing under the laws of the State of California
(the &ldquo;Company&rdquo;), and <b>THE BANK OF NEW YORK TRUST
COMPANY, N.A.</b>, a national banking association organized under
the laws of the United States of America, successor in interest to
BNY Western Trust Company, as Trustee (the
&ldquo;Trustee&rdquo;).</p>

<p align="center"><font size="3" face=
"Times New Roman">RECITALS</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Company and BNY Western Trust Company, predecessor in interest
to the Trustee, executed and delivered an Indenture of Mortgage,
dated as of March 11, 2004 (the &ldquo;Mortgage&rdquo;), and
subsequently executed and delivered a First Supplemental Indenture,
dated as of March 23, 2004 (the &ldquo;First Supplemental
Mortgage&rdquo;), and a Second Supplemental Indenture, dated as of
April 12, 2004 (the &ldquo;Second Supplemental Mortgage&rdquo; and
together with the Mortgage and the First Supplemental Mortgage
collectively, the &ldquo;Prior Indenture&rdquo;);</font></p>

<p><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></b>
WHEREAS, the Prior Indenture provided for the issuance by the
Company from time to time of its bonds in one or more series or
tranches, and provided that the payment of the principal of and
premium, if any, and interest, if any, on bonds issued thereunder
was secured by a lien on and security interest in certain real,
personal and mixed property subject to the lien of the Prior
Indenture to the extent provided therein;</p>

<p><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></b>
WHEREAS, the Prior Indenture provided that upon satisfaction of the
conditions specified in Section 8.12 of the Prior Indenture and
upon an Order of the Company, the lien of the Prior Indenture would
be discharged, canceled, terminated and satisfied and the property
subject thereto would be released and that bonds issued and
outstanding under the Prior Indenture would thereupon constitute
unsecured obligations of the Company;</p>

<p><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></b>
WHEREAS, the Company has satisfied all of the conditions precedent
to the release of the lien of the Prior Indenture specified in
Section 8.12 of the Prior Indenture and has delivered an Order of
the Company to the Trustee for the release of the lien of the Prior
Indenture on the date hereof and requesting that the Trustee
execute this Indenture supplementing, amending and restating the
Prior Indenture;</p>

<p><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></b>
WHEREAS, pursuant to Section 14.01(l) of the Prior Indenture, the
Company and the Trustee may, without the consent of holders of
bonds issued under the Prior Indenture, enter into a supplemental
indenture to amend and restate the Prior Indenture to eliminate any
provisions related to the lien of the Prior Indenture, the
Mortgaged Property (as defined in the Prior Indenture) or Liens (as
defined in the Prior Indenture), other than Section 7.11 of the
Prior Indenture;</p>

<p><a name="OLE_LINK1"><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></a>
WHEREAS, pursuant to 14.01(j) of the Prior Indenture, the Company
and the Trustee may, without the consent of holders of bonds issued
under the Prior Indenture, enter into a supplemental indenture to
cure any ambiguity, to correct any provision of the Prior Indenture
which may be defective or inconsistent with any other provision of
the Prior Indenture, or to make any other additions to, deletions
from or other changes to the provisions of the Prior Indenture,
provided that such additions, deletions and/or other changes shall
not materially adversely affect the interests of the holders of
bonds of any series or tranche issued thereunder in any material
respect;</p>

<p><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></b>
WHEREAS, the Company and the Trustee are executing this Indenture
pursuant to Sections 14.01(l) and 14.01(j) of the Prior Indenture
and intend, pursuant to Section 14.04 of the Prior Indenture, that
this Indenture shall amend and restate the Prior Indenture in its
entirety and that this Indenture shall supersede the Prior
Indenture as heretofore in effect for all purposes;</p>

<p><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></b>
WHEREAS, the Company has issued twenty-one (21) series of bonds
under the Prior Indenture, of which six series remain outstanding
on the date hereof as further described in Article IV and shall be
subject to and governed by the provisions of this Indenture from
and after the date hereof, and the Company may issue additional
series of bonds hereunder after the date hereof;</p>

<p><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></b>
WHEREAS, all acts necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been
performed.&nbsp; For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms used herein shall have the meanings
assigned to them in Article I of this Indenture;</p>

<p><b><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></b>
NOW, THEREFORE, THIS INDENTURE WITNESSETH that, in consideration of
the premises and of the purchase of Bonds by the Holders thereof,
it is hereby covenanted and agreed by and between the Company and
the Trustee that all the Bonds are to be authenticated and
delivered subject to the further covenants, conditions and trusts
hereinafter set forth, and the Company hereby covenants and agrees
to and with the Trustee, for the equal and ratable benefit of all
Holders of the Bonds or of series or Tranches thereof (except as
otherwise contemplated herein), as follows:</p>

<p align="center"><a name="_Toc101868264"><b><font size="3" face=
"Times New Roman">ARTICLE I</font></b><br />
<br />
<b>DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION</b></a></p>

<p><a name="_Toc101868265"><b><font size="3" face=
"Times New Roman">SECTION 1.01.&nbsp;&nbsp;&nbsp;<u>General
Definitions</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the
singular;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;reference
to any gender shall include all other genders;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all
terms used herein without definition which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all
terms used herein without definition which are defined in the
California Commercial Code shall have the meanings assigned to them
therein;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all
accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles in the United States; and, except as otherwise herein
expressly provided, the term &ldquo;generally accepted accounting
principles&rdquo; with respect to any computation required or
permitted hereunder shall mean, at the election of the Company from
time to time, such accounting principles as are generally accepted
in the United States at the date of such computation or at the
Initial Issuance Date; provided, however, that in determining
generally accepted accounting principles applicable to the Company,
effect shall be given, to the extent required, to any order, rule
or regulation of any administrative agency, regulatory authority or
other governmental body having jurisdiction over the
Company;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
reference to an &ldquo;Article&rdquo;, a &ldquo;Section&rdquo; or
any other subdivision refers to an Article, a Section or other
subdivision, as the case may be, of this Indenture; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
words &ldquo;herein&rdquo;, &ldquo;hereof&rdquo; and
&ldquo;hereunder&rdquo; and other words of similar import refer to
this Indenture as a whole and not to any particular Article,
Section or other subdivision.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;3.60% Senior Notes&rdquo;</b> has the meaning set forth in
Section 4.02(a).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;4.20% Senior Notes&rdquo;</b> has the meaning set forth in
Section 4.02(b).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;4.80% Senior Notes&rdquo;</b> has the meaning set forth in
Section 4.02(c).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;6.05% Senior Notes&rdquo;</b> has the meaning set forth in
Section 4.02(d).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Accountant&rdquo;</b> means a Person engaged in the
accounting profession or otherwise qualified to pass on accounting
matters (including, but not limited to, a Person certified or
licensed as a public accountant, whether or not then engaged in the
public accounting profession), which Person, unless required under
the terms hereof to be Independent, may be an employee, an
Affiliate or an employee of an Affiliate of the Company.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Act&rdquo;</b>, when used with respect to any Holder of a
Bond, has the meaning specified in Section 1.04.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Adjusted Treasury Rate&rdquo;</b>, with respect to the Fixed
Rate Senior Notes, means, with respect to any Redemption Date on
which any Fixed Rate Senior Notes are being redeemed pursuant to
Section 4.03 hereof:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently
published statistical release designated &ldquo;H.15(519) Selected
Interest Rates&rdquo; or any successor publication that is
published weekly by the Board of Governors of the Federal Reserve
System and that establishes yields on actively traded United States
treasury securities adjusted to constant maturity under the caption
&ldquo;Treasury Constant Maturities&rdquo; for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after the Remaining Life, yields for
the two published maturities most closely corresponding to the
Comparable Treasury issue will be determined and the Adjusted
Treasury Rate will be interpolated or extrapolated from such yields
on a straight line basis, rounding to the nearest month);
or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
if such release (or any successor publication) is not published
during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Adjusted Treasury Rate will be calculated on the third Business Day
preceding the Redemption Date.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Affiliate&rdquo;</b> of any specified Person means any other
Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person.&nbsp;
For the purposes of this definition, &ldquo;control&rdquo; when
used with respect to any specified Person means the power to direct
generally the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms &ldquo;controlling&rdquo; and
&ldquo;controlled&rdquo; have meanings correlative to the
foregoing.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Attributable Debt&rdquo;</b> in respect of a sale and
leaseback transaction means, at the time of determination, the
present value of the obligation of the lessee for net rental
payments during the remaining term of the lease included in such
sale and leaseback transaction, including any period for which such
lease has been extended or may, at the option of the lessor, be
extended.&nbsp; Such present value shall be calculated using a
discount rate equal to the rate of interest implicit in such
transaction, determined in accordance with generally accepted
accounting principles.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Authenticating Agent&rdquo;</b> means any Person or Persons
(other than the Company or an Affiliate of the Company) authorized
by the Trustee to act on behalf of the Trustee to authenticate the
Bonds of one or more series.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Authorized Officer&rdquo;</b> means the Chairman of the
Board, the President, the Chief Executive Officer, any Vice
President, the Chief Financial Officer, the Treasurer or any other
duly authorized officer, agent or attorney-in-fact of the Company
named in an Officer&rsquo;s Certificate signed by any of such
officers.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Authorized Publication&rdquo;</b> means a newspaper or
financial journal of general circulation, printed in the English
language and customarily published on each Business Day, whether or
not published on Saturdays, Sundays or holidays; or, in the
alternative, shall mean such form of communication as may have come
into general use for the dissemination of information of import
similar to that of the information specified to be published by the
provisions hereof.&nbsp; In the event that successive weekly
publications in an Authorized Publication are required hereunder
they may be made (unless otherwise expressly provided herein) on
the same or different days of the week and in the same or in
different Authorized Publications.&nbsp; In case, by reason of the
suspension of publication of any Authorized Publication, or by
reason of any other cause, it shall be impractical without
unreasonable expense to make publication of any notice in an
Authorized Publication as required by this Indenture, then such
method of publication or notification as shall be made with the
approval of the Trustee shall be deemed the equivalent of the
required publication of such notice in an Authorized
Publication.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Board of Directors&rdquo;</b> means the board of directors
of the Company, any committee thereof duly authorized to act in
respect of matters relating to this Indenture or any other body
fulfilling the function of a board of directors of a corporation
authorized to act in respect of matters relating to this
Indenture.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Board Resolution&rdquo;</b> means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company
that has been duly adopted by the Board of Directors, that is in
full force and effect on the date of such certification and that
has been delivered to the Trustee.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Bond Register&rdquo;</b> and <b>&ldquo;Bond
Registrar&rdquo;</b> have the respective meanings specified in
Section 3.05.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Bonds&rdquo;</b> means the Fixed Rate Senior Notes, the
Floating Rate Senior Notes, the Bonds of the Eleventh Series and
any securities, including any bonds, notes and other evidences of
indebtedness, authenticated and delivered under this
Indenture.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Bonds of the First Series&rdquo;</b> means the series of
Bonds established as such under the Prior Indenture and hereafter
governed by and subject to this Indenture as set forth in Section
4.01.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Bonds of the Second Series&rdquo;</b> means the series of
Bonds established as such under the Prior Indenture and hereafter
governed by and subject to this Indenture as set forth in Section
4.01.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Bonds of the Third Series&rdquo;</b> means the series of
Bonds established as such under the Prior Indenture and hereafter
governed by and subject to this Indenture as set forth in Section
4.01.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Bonds of the Fourth Series&rdquo;</b> means the series of
Bonds established as such under the Prior Indenture and hereafter
governed by and subject to this Indenture as set forth in Section
4.01.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Bonds of the Fifth Series&rdquo;</b> means the series of
Bonds established as such under the Prior Indenture and hereafter
governed by and subject to this Indenture as set forth in Section
4.01.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Bonds of the Eleventh Series&rdquo;</b> means the series of
Bonds established as such under the Prior Indenture and hereafter
governed by and subject to this Indenture as set forth in Section
4.01.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Bonds of the Initial Series&rdquo;</b> has the meaning set
forth in Section 4.01.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Business Day&rdquo;</b> means any day, other than a Saturday
or Sunday, which is not a day on which banking institutions or
trust companies in (i) any Place of Payment or other location
specified in the Bonds or this Indenture or (ii) the location of
the Company&rsquo;s principal place of business or the Corporate
Trust Office of the Trustee, are generally authorized or required
by law, regulation or executive order to remain closed, except as
may be otherwise specified as contemplated by Section 3.01;
provided, however, that with respect to the Floating Rate Senior
Notes, &ldquo;Business Day&rdquo; shall have the meaning set forth
in such Floating Rate Senior Notes.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Calculation Agency Agreement&rdquo;</b> means the
Calculation Agency Agreement, dated as of March 23, 2004, by and
between the Calculation Agent and the Company, relating to the
Floating Rate Senior Notes, as such agreement may be amended,
modified or supplemented from time to time.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Calculation Agent&rdquo;</b>, with respect to the Floating
Rate Senior Notes, means The Bank of New York Trust Company, N.A.,
as successor in interest to BNY Western Trust Company, or such
other Person as the Company shall from time to time designate in
accordance with the Calculation Agency Agreement.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;California Commercial Code&rdquo;</b> means the California
Commercial Code as in effect from time to time, unless otherwise
specified in this Indenture.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Capital Lease Obligation&rdquo;</b> means, at the time any
determination is to be made, the amount of the liability in respect
of a capital lease that would at that time be required to be
capitalized on a balance sheet in accordance with generally
accepted accounting principles.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Commission&rdquo;</b> means the Securities and Exchange
Commission, as from time to time constituted, created under the
Exchange Act or, if at any time after the Initial Issuance Date,
such Commission is not existing and performing the duties assigned
to it at March 11, 2004 under the Trust Indenture Act, then the
body, if any, performing such duties at such time.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Company&rdquo;</b> means the Person named as the
&ldquo;Company&rdquo; in the first paragraph of this Indenture
until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter
&ldquo;Company&rdquo; shall mean such successor Person.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Company Order&rdquo;</b> or <b>&ldquo;Company
Request&rdquo;</b> means, respectively, a written order or request
signed in the name of the Company by an Authorized Officer and
delivered to the Trustee.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Comparable Treasury Issue&rdquo;</b>, with respect to the
Fixed Rate Senior Notes, means the United States Treasury security
selected by the Independent Investment Banker as having a maturity
comparable to the Remaining Life of the applicable series of Fixed
Rate Senior Notes to be redeemed pursuant to Section 4.03 that
would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the Remaining Life of the
applicable series of Fixed Rate Senior Notes to be redeemed
pursuant to Section 4.03.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Comparable Treasury Price&rdquo;</b>, with respect to the
Fixed Rate Senior Notes, means, with respect to any Redemption Date
on which any series of Fixed Rate Senior Notes is being redeemed
pursuant to Section 4.03 hereof, (a) the average of five (5)
Reference Treasury Dealer Quotations for such Redemption Date,
after excluding the highest and lowest Reference Treasury Dealer
Quotations, or (b) if the Independent Investment Banker obtains
fewer than five (5) such Reference Treasury Dealer Quotations, the
average of all quotations obtained.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Corporate Trust Office&rdquo;</b> means the office of the
Trustee, at which at any particular time its corporate trust
business shall be principally administered, which office, at the
Initial Issuance Date, was, and on the date hereof is, located at
550 Kearny Street, Suite 600, San Francisco, California, 94108,
Attention: Corporate Trust Administration, fax number (415)
399-1647.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;corporation&rdquo;</b> means a corporation, partnership,
limited liability company, association, company, joint stock
company or business trust, and references to
&ldquo;corporate&rdquo; and other derivations of
&ldquo;corporation&rdquo; herein shall be deemed to include
appropriate derivations of such entities.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;CPI Index&rdquo;</b> means the United States Department of
Labor, Bureau of Labor Statistics Consumer Price Index for All
Urban Consumers, U.S. City Average, &ldquo;All Items&rdquo;
(1982-84 = 100), or any successor index thereof as such successor
index may be appropriately adjusted to establish substantial
equivalence with the Consumer Price Index; provided that if the
Consumer Price Index ceases to be published and there is no
successor thereto, such other index as the Company and the Trustee
shall agree upon in writing shall be substituted for the Consumer
Price Index.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Dealer&rdquo;</b>, with respect to the Fixed Rate Senior
Notes, means a primary U.S. Government Securities dealer in the
United States.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Debt&rdquo;</b> means any debt of the Company for money
borrowed and guarantees by the Company of debt for money borrowed
but in each case excluding liabilities in respect of Capital Lease
Obligations or Swap Agreements.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Default&rdquo;</b> means any event that with the passage of
time or the giving of notice or both would be an Event of
Default.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Defaulted Interest&rdquo;</b> has the meaning specified in
Section 3.07.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Depositary&rdquo;</b> means, with respect to the Bonds of
any series, or Tranche thereof, issuable or issued in whole or in
part in the form of one or more Global Bonds, the Person designated
as Depositary by the Company pursuant to Sections 3.01(q) and 3.13
until a successor Depositary shall have become such pursuant to the
applicable provisions of this Indenture, and, thereafter,
&ldquo;Depositary&rdquo; shall mean or include each Person who is
then a Depositary hereunder, and if at any time there is more than
one such Person, &ldquo;Depositary&rdquo; as used with respect to
Bonds of any such series or Tranche shall mean the Depositary with
respect to the Bonds of that series or Tranche.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Diablo Canyon Lease&rdquo;</b> means that certain lease
dated September 17, 1966, between Eureka Energy Company, as lessor,
and the Company, as lessee, which lease was originally entered into
between Luigi Marre Land and Cattle Company, a California
corporation, as lessor, and San Luis Obispo Bay Properties, Inc., a
California corporation, as lessee, a memorandum of which Lease was
recorded September 21, 1966 in Volume 1410, Page 556, Official
Records, San Luis Obispo County, California, and any supplements,
assignments and modifications thereto.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Discount Bond&rdquo;</b> means any Bond which provides for
an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 9.02.&nbsp; &ldquo;Interest&rdquo; with respect
to a Discount Bond means interest, if any, borne by such Bond at a
Stated Interest Rate.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Dollar&rdquo;</b> or <b>&ldquo;$&rdquo;</b> means a dollar
or other equivalent unit in such coin or currency of the United
States as at the time shall be legal tender for the payment of
public and private debts.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;DTC&rdquo;</b> means The Depository Trust Company, New York,
New York.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Eligible Obligations&rdquo;</b> means:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
with respect to Bonds denominated in Dollars, Government
Obligations; or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
with respect to Bonds denominated in a currency other than Dollars
or in a composite currency, such other obligations or instruments
as shall be specified with respect to such Bonds as contemplated by
Section 3.01.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Event of Default&rdquo;</b> has the meaning specified in
Section 9.01.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Excepted Property&rdquo;</b> means any right, title or
interest of the Company or any Significant Subsidiary in, to or
under any of the following property, whether owned at March 11,
2004 or thereafter acquired:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a) all money, investment property and deposit accounts (as such
terms are defined in the California Commercial Code as in effect on
March&nbsp;11, 2004), and all cash on hand or on deposit in banks
or other financial institutions, shares of stock, interests in
general or limited partnerships or limited liability companies,
bonds, notes, other evidences of indebtedness and other securities,
of whatever kind and nature;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b) all accounts, chattel paper, commercial tort claims, documents,
general intangibles, instruments, letter-of-credit rights and
letters of credit (as such terms are defined in the California
Commercial Code as in effect on March&nbsp;11, 2004), other than
licenses and permits to use the real property of others, franchises
to use public roads, streets and other public properties, rights of
way and other rights or interests relating to the occupancy or use
of real property; and all contracts, leases (except the Diablo
Canyon Lease), operating agreements and other agreements of
whatever kind and nature; all contract rights, bills and notes
(except to the extent that any of the same constitute investment
property, in which case they are separately covered under clause
(a) above); all revenues, income and earnings, all accounts
receivable, rights to payment and unbilled revenues, all rents,
tolls, issues, products and profits, claims, credits, demands and
judgments, including any rights in or to rates, revenue components,
charges, tariffs or amounts arising therefrom, or in any amounts
that are accrued and recorded in a regulatory account for
collections by the Company or any Significant Subsidiary; all
governmental and other licenses, permits, franchises, consents and
allowances, including all emission allowances (or similar rights)
created under any similar existing or future law relating to
abatement or control of pollution of the atmosphere, water or soil,
other than licenses and permits to use the real property of others,
franchises to use public roads, streets and other public
properties, rights of way and other rights or interests relating to
the occupancy or use of real property; and all patents, patent
licenses and other patent rights, patent applications, trade names,
trademarks, copyrights and other intellectual property, including
computer software and software licenses; and all claims, credits,
choses in action and other intangible property;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c) all automobiles, buses, trucks, truck cranes, tractors,
trailers, motor vehicles and similar vehicles and movable
equipment; all rolling stock, rail cars and other railroad
equipment; all vessels, boats, barges and other marine equipment;
all airplanes, helicopters, aircraft engines and other flight
equipment; and all parts, accessories and supplies used in
connection with any of the foregoing;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d) all goods, stock in trade, wares, merchandise and inventory
held for the purpose of sale or lease in the ordinary course of
business; all materials, supplies, inventory and other items of
personal property which are consumable (otherwise than by ordinary
wear and tear) in their use in the operation of the Principal
Property; all fuel, whether or not any such fuel is in a form
consumable in the operation of the Principal Property, including
separate components of any fuel in the forms in which such
components exist at any time before, during or after the period of
the use thereof as fuel; all hand and other portable tools and
equipment; and all furniture and furnishings;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e) all personal property the perfection of a security interest in
which is not governed by the California Commercial Code;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f) all oil, gas and other minerals (as such terms are defined in
the California Commercial Code as in effect on March&nbsp;11,
2004); and all coal, ore, gas, oil and other minerals and all
timber, and all rights and interests in any of the foregoing,
whether or not such minerals or timber shall have been mined or
extracted or otherwise separated from the land; and all electric
energy and capacity, gas (natural or artificial), steam, water and
other products generated, produced, manufactured, purchased or
otherwise acquired by the Company or any Significant
Subsidiary;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g) all property which is the subject of a lease agreement, other
than a lease agreement that results from a sale and leaseback
transaction, designating the Company or any Significant Subsidiary
as lessee and all right, title and interest of the Company or any
Significant Subsidiary in and to such property and in, to and under
such lease agreement, whether or not such lease agreement is
intended as security; provided, however, that the Company&rsquo;s
right, title and interest in and to the property which is the
subject of the Diablo Canyon Lease, and in to and under the Diablo
Canyon Lease shall not be Excepted Property;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(h) all property, real, personal and mixed that is stated in
Sections 12.03 and 12.05 to not be Principal Property;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i) all proceeds (as such term is defined in the California
Commercial Code as in effect on March&nbsp;11, 2004) of the
foregoing.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Exchange Act&rdquo;</b> means the Securities Exchange Act of
1934, as amended.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Fair Value&rdquo;</b>, with respect to property, means the
fair value of such property as may be determined by reference to
(a) the amount which would be likely to be obtained in an
arm&rsquo;s-length transaction with respect to such property
between an informed and willing buyer and an informed and willing
seller, under no compulsion, respectively, to buy or sell, (b) the
amount of investment with respect to such property which, together
with a reasonable return thereon, would be likely to be recovered
through ordinary business operations or otherwise, (c) cost or
replacement or reproduction cost, in each case less depreciation
with respect to such property and/or (d) any other relevant
factors; provided, however, that the Fair Value of property shall
be determined without deduction for any senior liens on such
property.&nbsp; Fair Value of any property may be determined,
without physical inspection, by the use of accounting and
engineering records and other data maintained by the Company
(including on the basis of the cost of such property).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;First Supplemental Mortgage&rdquo;</b> has the meaning set
forth in the first recital hereof.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Fixed Rate Senior Notes&rdquo;</b> means, collectively, the
3.60% Senior Notes, the 4.20% Senior Notes, the 4.80% Senior Notes
and the 6.05% Senior Notes.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Floating Rate Senior Notes&rdquo;</b> has the meaning set
forth in Section 4.02(e).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Global Bond&rdquo;</b> means a Bond representing all or part
of a series of Bonds, or Tranche thereof, issued to the Depositary
for such series or Tranche in accordance with Section 3.13, and
bearing the legend prescribed in Section 3.13.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Governmental Authority&rdquo;</b> means the government of
the United States or of any state or territory thereof or of the
District of Columbia or of any county, municipality or other
political subdivision of any thereof, or any department, agency,
authority or other instrumentality of any of the
foregoing.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Government Obligations&rdquo;</b> means securities which are
(a) (i) direct obligations of the United States where the payment
or payments thereunder are supported by the full faith and credit
of the United States or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the
United States where the timely payment or payments thereunder are
unconditionally guaranteed as a full faith and credit obligation by
the United States or (b) depository receipts issued by a bank (as
defined in Section 3(a)(2) of the Securities Act of 1933, as
amended) as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of or
other amount with respect to any such Government Obligation held by
such custodian for the account of the holder of a depository
receipt; provided, that, (except as required by law) such custodian
is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by
the custodian in respect of the Government Obligation or the
specific payment of interest on or principal of or other amount
with respect to the Government Obligation evidenced by such
depository receipt.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Holder&rdquo;</b> means a Person in whose name a Bond is
registered in the Bond Register.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Indenture&rdquo;</b> means this instrument as originally
executed and as it may from time to time be supplemented or amended
by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof, including, for all purposes of
this instrument and any such supplemental indenture, the provisions
of the Trust Indenture Act that are deemed to be a part of and
govern this Indenture and any such supplemental indenture,
respectively.&nbsp; The term &ldquo;Indenture&rdquo; shall also
include the provisions or terms of particular series of Bonds
established in any Officer&rsquo;s Certificate, Board Resolution or
Company Order delivered pursuant to Sections 2.01, 3.01 and
13.07.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Independent&rdquo;</b>, when applied to any Accountant or
other specified Person, means such a Person who (a) does not have
any direct or indirect material financial interest in the Company
or in any other obligor upon the Bonds or in any Affiliate of the
Company or of such other obligor, (b) is not connected with the
Company, an Affiliate of the Company or such other obligor as an
officer, employee, promoter, underwriter, trustee, partner,
director or any person performing similar functions and (c) is
appointed or selected by the Company and approved by the Trustee in
the exercise of reasonable care.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Independent Investment Banker&rdquo;</b>, with respect to
the Fixed Rate Senior Notes, means a Dealer appointed by the
Company.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Initial Issuance Date&rdquo;</b> means March 23, 2004, the
date on which the Bonds of the Initial Series were originally
issued under the Prior Indenture.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Interest Payment Date&rdquo;</b>, when used with respect to
any Bond, means the Stated Maturity of an installment of interest
on such Bond.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Internal Revenue Code&rdquo;</b> means the Internal Revenue
Code of 1986, as amended, or any successor federal
statute.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Investment Securities&rdquo;</b> means any of the following
obligations or investment property on which neither the Company,
any other obligor on the Bonds nor any Affiliate of either is the
obligor: (a) Government Obligations; (b) interest bearing deposit
accounts (which may be represented by certificates of deposit) in
any national or state bank (which may include the Trustee or any
Paying Agent) or savings association which has outstanding
securities rated by a nationally recognized rating organization in
either of the two (2) highest rating categories (without regard to
modifiers) for short-term securities or in any of the three (3)
highest rating categories (without regard to modifiers) for
long-term securities; (c) bankers&rsquo; acceptances drawn on and
accepted by any commercial bank (which may include the Trustee or
any Paying Agent) which has outstanding securities rated by a
nationally recognized rating organization in either of the two (2)
highest rating categories (without regard to modifiers) for
short-term securities or in any of the three (3) highest rating
categories (without regard to modifiers) for long-term securities;
(d) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, any state or
territory of the United States or the District of Columbia, or any
political subdivision of any of the foregoing, which are rated by a
nationally recognized rating organization in either of the two (2)
highest rating categories (without regard to modifiers) for
short-term securities or in any of the three (3) highest rating
categories (without regard to modifiers) for long-term securities;
(e) bonds or other obligations of any agency or instrumentality of
the United States; (f) corporate debt securities which are rated by
a nationally recognized rating organization in either of the two
(2) highest rating categories (without regard to modifiers) for
short-term securities or in any of the three (3) highest rating
categories (without regard to modifiers) for long-term securities;
(g) repurchase agreements with respect to any of the foregoing
obligations or securities with any banking or financial institution
(which may include the Trustee or any Paying Agent) which has
outstanding securities rated by a nationally recognized rating
organization in either of the two (2) highest rating categories
(without regard to modifiers) for short-term securities or in any
of the three (3) highest rating categories (without regard to
modifiers) for long-term securities; (h) securities issued by any
regulated investment company (including any investment company for
which the Trustee or any Paying Agent is the advisor), as defined
in Section 851 of the Internal Revenue Code or any such successor
section of the Internal Revenue Code, provided that the portfolio
of such investment company is limited to obligations or securities
of the character and investment quality contemplated in clauses (a)
through (f) above and repurchase agreements which are fully
collateralized by any of such obligations or securities; and (i)
any other obligations or securities which may lawfully be purchased
by the Trustee in its capacity as such.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Lien&rdquo;</b> means any mortgage, deed of trust, pledge,
security interest, encumbrance, easement, lease, reservation,
restriction, servitude, charge or similar right and any other lien
of any kind, including, without limitation, any conditional sale or
other title retention agreement, any lease in the nature thereof,
and any defect, irregularity, exception or limitation in record
title or, when the context so requires, any lien, claim or interest
arising from any of the foregoing.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Maturity&rdquo;</b>, when used with respect to any Bond,
means the date on which the principal of such Bond or an
installment of principal or any sinking fund payment becomes due
and payable as provided in such Bond or in this Indenture, whether
at the Stated Maturity, by declaration of acceleration, upon call
for redemption or otherwise.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;MBIA&rdquo;</b> means MBIA Insurance Corporation.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;MBIA Reimbursement and Indemnity Agreement&rdquo;</b> means
the Amended and Restated Reimbursement and Indemnity Agreement,
dated as of March 5, 2004, between the Company and MBIA, as the
same may be amended, supplemented, restated or otherwise modified
from time to time.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Net Tangible Assets&rdquo;</b> means the total amount of the
Company&rsquo;s assets determined on a consolidated basis in
accordance with generally accepted accounting principles as of a
date determined pursuant to Section 7.07(b), <i>less</i> (a) the
sum of the Company&rsquo;s consolidated current liabilities
determined in accordance with generally accepted accounting
principles, and (b) the amount of the Company&rsquo;s consolidated
assets classified as intangible assets, determined in accordance
with generally accepted accounting principles, including, but not
limited to, such items as goodwill, trademarks, trade names,
patents, and unamortized debt discount and expense and regulatory
assets carried as an asset on the Company&rsquo;s consolidated
balance sheet.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Notice of Default&rdquo;</b> has the meaning specified in
Section 9.01(c).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Officer&rsquo;s Certificate&rdquo;</b> means a certificate
signed by an Authorized Officer and delivered to the
Trustee.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Opinion of Counsel&rdquo;</b> means a written opinion of
counsel, who may be counsel for the Company or other counsel
acceptable to the Trustee and who may be an employee, an Affiliate
or an employee of an Affiliate of the Company.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Outstanding&rdquo;</b>, when used with respect to Bonds,
means, as of the date of determination, all Bonds theretofore
authenticated and delivered under this Indenture,
except:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Bonds theretofore canceled or delivered to the Bond Registrar or
the Trustee for cancellation;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Bonds deemed to have been paid for all purposes of this Indenture
in accordance with Section 8.01 (whether or not the Company&rsquo;s
indebtedness in respect thereof shall be satisfied and discharged
for any other purpose); and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Bonds, the principal of, premium, if any, and interest, if any, on
which have been fully paid pursuant to the third paragraph of
Section 3.06 or in exchange for or in lieu of which other Bonds
have been authenticated and delivered pursuant to this Indenture,
other than any such Bonds in respect of which there shall have been
presented to the Trustee proof satisfactory to it and the Company
that such Bonds are held by a protected purchaser;</font></p>

<p><font size="3" face="Times New Roman">provided, however, that in
determining whether or not the Holders of the requisite principal
amount of the Bonds Outstanding under this Indenture, or the
Outstanding Bonds of any series or Tranche, have given any request,
demand, authorization, direction, notice, consent or waiver
hereunder or whether or not a quorum is present at a meeting of
Holders of Bonds,</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Bonds owned by the Company or any other obligor upon the Bonds or
any Affiliate of the Company or of such other obligor (unless the
Company, such obligor and/or such Affiliate owns all Bonds
Outstanding under this Indenture, or all Outstanding Bonds of each
such series and each such Tranche, as the case may be, determined
without regard to this clause (x)) shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver or upon
any such determination as to the presence of a quorum, only Bonds
which the Trustee actually knows to be so owned shall be so
disregarded; provided, however, that Bonds so owned which have been
pledged in good faith may be regarded as Outstanding if it is
established to the reasonable satisfaction of the Trustee that the
pledgee, and not the Company, any such other obligor or Affiliate
of either thereof, has the right so to act with respect to such
Bonds and that the pledgee is not the Company or any other obligor
upon the Bonds or any Affiliate of the Company or of such other
obligor; and provided, further, that in no event shall any Bond
which shall have been delivered to evidence, enhance or secure, in
whole or in part, the Company&rsquo;s obligations in respect of
other indebtedness be deemed to be owned by the Company if the
principal of such Bond is payable, whether at Stated Maturity or
upon mandatory redemption, at the same time as the principal of
such other indebtedness is payable, whether at Stated Maturity or
upon mandatory redemption or acceleration, but only to the extent
of such portion of the principal amount of such Bond as does not
exceed the principal amount of such other indebtedness;
and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(y)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the principal amount of a Discount Bond that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal
thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 9.02; and</font></p>

<p><font size="3" face="Times New Roman">provided, further, that,
in the case of any Bond the principal of which is payable from time
to time without presentment or surrender, the principal amount of
such Bond that shall be deemed to be Outstanding at any time for
all purposes of this Indenture shall be the original principal
amount thereof less the aggregate amount of principal thereof
theretofore paid, unless otherwise specified pursuant to
Section&nbsp;3.01.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Paying Agent&rdquo;</b> means any Person, including the
Company, authorized by the Company to pay the principal of and
premium, if any, or interest, if any, on any Bonds on behalf of the
Company.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Periodic Offering&rdquo;</b> means an offering of Bonds of a
series from time to time any or all of the specific terms of which
Bonds, including, without limitation, the rate or rates of
interest, if any, thereon, the Stated Maturity or Maturities
thereof and the redemption provisions, if any, with respect
thereto, are to be determined by the Company or its agents from
time to time subsequent to the initial request for the
authentication and delivery of such Bonds by the Trustee, all as
contemplated in Section 3.01 and Section 5.01(b).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Person&rdquo;</b> means any individual, corporation, limited
liability partnership, joint venture, trust or unincorporated
organization, or any other entity, whether or not a legal entity,
or any Governmental Authority.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Place of Payment&rdquo;</b>, when used with respect to Bonds
of any series, or any Tranche thereof, means the place or places,
specified as contemplated by Section 3.01, at which the principal
of and premium, if any, and interest, if any, on the Bonds of such
series or Tranche are payable, subject, in either case, to Section
7.02.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Predecessor Bond&rdquo;</b> of any particular Bond means
every previous Bond evidencing all or a portion of the same debt as
that evidenced by such particular Bond; and, for the purposes of
this definition, any Bond authenticated and delivered under Section
3.06 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Bond shall be deemed (to the extent lawful) to evidence the
same debt as the mutilated, destroyed, lost or stolen
Bond.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Principal Property&rdquo;</b> means any property of the
Company or any Significant Subsidiary, as applicable, other than
Excepted Property.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Prior Indenture&rdquo;</b> has the meaning set forth in the
first recital hereof.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Redemption Date&rdquo;</b>, when used with respect to any
Bond to be redeemed, means the date fixed for such redemption by or
pursuant to this Indenture.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Redemption Price&rdquo;</b>, when used with respect to any
Bond to be redeemed, means the price at which it is to be redeemed
pursuant to this Indenture which price shall include principal of
and premium, if any, payable on such Bond but shall not include any
accrued interest payable with respect to such Bond.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Reference Treasury Dealer&rdquo;</b>, with respect to the
Fixed Rate Senior Notes, means Lehman Brothers Inc., UBS Securities
LLC, the Independent Investment Banker and Dealers acceptable to
the Independent Investment Banker and their respective successors;
provided, however, that if any of the foregoing shall cease to be a
Dealer, the Company will select a substitute Dealer.&nbsp; However,
if the Company does not select a substitute Dealer within a
reasonable period of time, then the substitute Dealer will be
selected by the Trustee after consultation with the
Company.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Reference Treasury Dealer Quotations&rdquo;</b>, with
respect to the Fixed Rate Senior Notes and with respect to each
Reference Treasury Dealer and any Redemption Date related to Fixed
Rate Senior Notes, means the average, as determined by the
Independent Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Independent
Investment Banker at 5:00 p.m., New York City time, on the third
Business Day preceding such Redemption Date.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Regular Record Date&rdquo;</b> for the interest payable on
any Interest Payment Date on the Bonds of any series means the date
specified for that purpose as contemplated by Section
3.01.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Release Date</b>&rdquo; means April 22, 2005, being the date
on which the lien of the Prior Indenture was discharged, cancelled,
terminated and satisfied and the Mortgaged Property (as defined in
the Prior Indenture) was released to the Company free and clear of
any Lien, pursuant to Section 8.12 of the Prior
Indenture.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Remaining Life&rdquo;</b>, as of any date of calculation,
with respect to the Fixed Rate Senior Notes, means the remaining
term of the applicable series of Fixed Rate Senior
Notes.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Remaining Scheduled Payments&rdquo;</b> means, with respect
to each Fixed Rate Senior Note that the Company is redeeming
pursuant to Section 4.03, the remaining scheduled payments of
principal and interest that would be due after the applicable
Redemption Date if such Fixed Rate Senior Note were not
redeemed.&nbsp; However, if the Redemption Date is not a scheduled
Interest Payment Date with respect to that Fixed Rate Senior Note,
the amount of the next succeeding scheduled interest payment on
that Fixed Rate Senior Note will be reduced by the amount of
interest accrued on such Fixed Rate Senior Note to the Redemption
Date.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Required Currency&rdquo;</b> has the meaning specified in
Section 3.11.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Responsible Officer&rdquo;</b>, when used with respect to
the Trustee, means any officer of the Trustee with direct
responsibility for the administration of this Indenture and also
means, with respect to a particular corporate trust matter, any
other officer of the Trustee to whom such matter is referred
because of such officer&rsquo;s knowledge of and familiarity with
the particular subject.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Second Supplemental Mortgage&rdquo;</b> has the meaning set
forth in the first recital hereof.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Significant Subsidiary&rdquo;</b> shall have the meaning
specified in Rule 1-02(w) of Regulation S-X under the Securities
Act of 1933, as amended; provided that, Significant Subsidiary
shall not include any Person, substantially all the assets of which
are Excepted Property.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Special Record Date&rdquo;</b> for the payment of any
Defaulted Interest on the Bonds of any series means a date fixed by
the Trustee pursuant to Section 3.07.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Stated Interest Rate&rdquo;</b> means a rate (whether fixed
or variable) at which an obligation by its terms is stated to bear
simple interest.&nbsp; Any calculation or other determination to be
made under this Indenture by reference to the Stated Interest Rate
on an obligation shall be made (a) if the Company&rsquo;s
obligations in respect of any other indebtedness shall be
evidenced, enhanced or secured in whole or in part by such
obligation, by reference to the lower of the Stated Interest Rate
on such obligation and the Stated Interest Rate on such other
indebtedness and (b) without regard to the effective interest cost
to the Company of such obligation or of any such other
indebtedness.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Stated Maturity&rdquo;</b>, when used with respect to any
obligation (including any Bond of any series) or any installment of
principal thereof or interest thereon, means the date on which the
principal of such obligation or such installment of principal or
interest is stated to be due and payable (without regard to any
provisions for redemption, prepayment, acceleration, purchase or
extension).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Subsidiary&rdquo;</b> means (i) any corporation at least a
majority of the outstanding voting stock or interest of which is
owned, directly or indirectly, by the Company or by one or more
Subsidiaries, or by the Company and one or more Subsidiaries or
(ii) any other Person (other than a corporation) of which the
Company and/or one or more Subsidiaries has at least a majority
ownership and power to direct the policies, management and
affairs.&nbsp; For the purposes of this definition, &ldquo;voting
stock&rdquo; means stock having voting power for the election of
directors, whether at all times or only so long as no senior class
of stock has such voting power by reason of any
contingency.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Successor Corporation&rdquo;</b> has the meaning specified
in Section 12.01.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;supplemental indenture&rdquo;</b> or <b>&ldquo;indenture
supplemental hereto&rdquo;</b> means an instrument supplementing or
amending this Indenture executed and delivered pursuant to Article
XIII.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Swap Agreement&rdquo;</b> means any agreement with respect
to any swap, forward, future or derivative transaction or option or
similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Tranche&rdquo;</b> means a group of Bonds which (a) are of
the same series and (b) have identical terms except as to principal
amount and/or date of issuance.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Trust Indenture Act&rdquo;</b> means, as of any time, the
Trust Indenture Act of 1939 or any successor statute, as in effect
at such time.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;Trustee&rdquo;</b> means the Person named as the
&ldquo;Trustee&rdquo; in the first paragraph of this Indenture
until a successor trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter
&ldquo;Trustee&rdquo; shall mean the Person which shall have become
a successor trustee pursuant to the applicable provisions of this
Indenture, and, if at any time there is more than one Person acting
as trustee hereunder, &ldquo;Trustee&rdquo; shall mean each such
Person so acting.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;United States&rdquo;</b> means the United States of America,
its territories, its possessions and other areas subject to its
political jurisdiction.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>
&ldquo;U.S. Government Securities&rdquo;</b>, for purposes of the
Floating Rate Senior Notes, means securities which are (a) direct
obligations of the United States of America for the payment on
which its full faith and credit is pledged or (b) obligations of a
Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit
obligation of the United States of America, and which in the case
of (a) and (b) are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued
by a bank or trust company as custodian with respect to any such
U.S. Government Security or a specific payment of interest on or
principal of any such U.S. Government Security held by such
custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Security evidenced by
such depository receipt.</font></p>

<p><a name="_Toc101868266"><b><font size="3" face=
"Times New Roman">SECTION
1.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Compliance Certificates and
Opinions</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as otherwise expressly provided in this Indenture, upon any
application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall
furnish to the Trustee an Officer&rsquo;s Certificate stating that
all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with, it
being understood that in the case of any such application or
request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating
to such particular application or request, no additional
certificate or opinion need be furnished.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Every
certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than the
certificates provided pursuant to Section 7.06) shall
include:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
statement that each Person signing such certificate or opinion has
read such covenant or condition and the definitions herein relating
thereto;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in
such certificate or opinion are based;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
statement that, in the opinion of each such Person, such Person has
made such examination or investigation as is necessary to enable
such Person to express an informed opinion as to whether or not
such covenant or condition has been complied with; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
statement as to whether, in the opinion of each such Person, such
condition or covenant has been complied with.</font></p>

<p><a name="_Toc101868267"><b><font size="3" face=
"Times New Roman">SECTION
1.03.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Content and Form of Documents
Delivered to Trustee</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
Officer&rsquo;s Certificate may be based (without further
examination or investigation), insofar as it relates to or is
dependent upon legal matters, upon an opinion of, or
representations by, counsel, and, insofar as it relates to or is
dependent upon matters which are subject to verification by
Accountants, upon a certificate or opinion of, or representations
by, an Accountant, unless, in any case, such officer has actual
knowledge that the certificate or opinion or representations with
respect to the matters upon which such Officer&rsquo;s Certificate
may be based as aforesaid are erroneous.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
certificate of an Accountant may be based (without further
examination or investigation), insofar as it relates to or is
dependent upon legal matters, upon an opinion of, or
representations by, counsel, and insofar as it relates to or is
dependent upon factual matters, information with respect to which
is in the possession of the Company and which are not subject to
verification by Accountants, upon a certificate of, or
representations by, an officer or officers of the Company, unless
such Accountant has actual knowledge that the certificate or
opinion or representations with respect to the matters upon which
his certificate or opinion may be based as aforesaid are
erroneous.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
Opinion of Counsel may be based (without further examination or
investigation), insofar as it relates to or is dependent upon
factual matters, information with respect to which is in the
possession of the Company, upon a certificate of, or
representations by, an officer or officers of the Company, and,
insofar as it relates to or is dependent upon matters which are
subject to verification by Accountants upon a certificate or
opinion of, or representations by, an Accountant, unless such
counsel has actual knowledge that the certificate or opinion or
representations with respect to the matters upon which his opinion
may be based as aforesaid are erroneous.&nbsp; In addition, any
Opinion of Counsel may be based (without further examination or
investigation), insofar as it relates to or is dependent upon
matters covered in an Opinion of Counsel rendered by other counsel,
upon such other Opinion of Counsel, unless such counsel has actual
knowledge that the Opinion of Counsel rendered by such other
counsel with respect to the matters upon which his Opinion of
Counsel may be based as aforesaid are erroneous.&nbsp; If, in order
to render any Opinion of Counsel provided for herein, the signer
thereof shall deem it necessary that additional facts or matters be
stated in any Officer&rsquo;s Certificate or certificate of an
Accountant provided for herein, then such certificate may state all
such additional facts or matters as the signer of such Opinion of
Counsel may request.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary
that all such matters be certified by, or covered by the opinion
of, only one such Person, or that they be so certified or covered
by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several
documents.&nbsp; Where any Person is required to make, give or
execute two or more applications, requests, consents, certificates,
statements, opinions or other instruments under this Indenture,
they may, but need not, be consolidated and form one
instrument.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Whenever,
subsequent to the receipt by the Trustee of any Board Resolution,
Officer&rsquo;s Certificate, Opinion of Counsel or other document
or instrument, a clerical, typographical or other inadvertent or
unintentional error or omission shall be discovered therein, a new
document or instrument may be substituted therefor in corrected
form with the same force and effect as if originally filed in the
corrected form and, irrespective of the date or dates of the actual
execution and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or delivered
as of the date or dates required with respect to the document or
instrument for which it is substituted.&nbsp; Anything in this
Indenture to the contrary notwithstanding, if any such corrective
document or instrument indicates that action has been taken by or
at the request of the Company which could not have been taken had
the original document or instrument not contained such error or
omission, the action so taken shall not be invalidated or otherwise
rendered ineffective but shall be and remain in full force and
effect, except to the extent that such action was a result of
willful misconduct or bad faith.&nbsp; Without limiting the
generality of the foregoing, any Bonds issued under the authority
of such defective document or instrument shall nevertheless be the
valid obligations of the Company entitled to the benefit of this
Indenture equally and ratably with all other Outstanding Bonds,
except as aforesaid.<a name="_Toc101868268"></a></font></p>

<p><b><font size="3" face="Times New Roman">SECTION
1.04.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Acts of
Holders.</u></font></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
request, demand, authorization, direction, notice, consent,
election, waiver or other action provided by this Indenture to be
made, given or taken by Holders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by
such Holders in person or by an agent duly appointed in writing or,
alternatively, may be embodied in and evidenced by the record of
Holders voting in favor thereof, either in person or by proxies
duly appointed in writing, at any meeting of Holders duly called
and held in accordance with the provisions of Article XIV, or a
combination of such instruments and any such record.&nbsp; Except
as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both are
delivered to the Trustee and, where it is hereby expressly
required, to the Company.&nbsp; Such instrument or instruments and
any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the &ldquo;Act&rdquo;
of the Holders signing such instrument or instruments and so voting
at any such meeting.&nbsp; Proof of execution of any such
instrument or of a writing appointing any such agent, or of the
holding by any Person of a Bond, shall be sufficient for any
purpose of this Indenture and (subject to Section 10.01) conclusive
in favor of the Trustee and the Company, if made in the manner
provided in this Section.&nbsp; The record of any meeting of
Holders shall be proved in the manner provided in Section
14.06.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that
the individual signing such instrument or writing acknowledged to
him the execution thereof or may be proved in any other manner
which the Trustee and the Company deem sufficient.&nbsp; Where such
execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
ownership, principal amount (except as otherwise contemplated in
clause (y) of the first proviso to the definition of Outstanding)
and serial numbers of Bonds held by any Person, and the date of
holding the same, shall be proved by the Bond Register.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
request, demand, authorization, direction, notice, consent,
election, waiver or other Act of a Holder shall bind every future
Holder of the same Bond and the Holder of every Bond issued upon
the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be
done by the Trustee or the Company in reliance thereon, whether or
not notation of such action is made upon such Bond.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until
such time as written instruments shall have been delivered to the
Trustee with respect to the requisite percentage of principal
amount of Bonds for the action contemplated by such instruments,
any such instrument executed and delivered by or on behalf of a
Holder may be revoked with respect to any or all of such Bonds by
written notice by such Holder or any subsequent Holder, proven in
the manner in which such instrument was proven.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bonds
of any series, or any Tranche thereof, authenticated and delivered
after any Act of Holders may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any action
taken by such Act of Holders.&nbsp; If the Company shall so
determine, new Bonds of any series, or any Tranche thereof, so
modified as to conform, in the opinion of the Trustee and the
Company, to such action may be prepared and executed by the Company
and authenticated and delivered by the Trustee in exchange for
Outstanding Bonds of such series or Tranche.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company may, at its option, by Company Order, fix in advance a
record date for the determination of Holders entitled to give any
request, demand, authorization, direction, notice, consent, waiver
or other Act solicited by the Company, but the Company shall have
no obligation to do so.&nbsp; In addition, the Trustee may, at its
option, fix in advance a record date for the determination of
Holders entitled to join in the giving or making of any Notice of
Default, any declaration of acceleration referred to in Section
9.02, any request to institute proceedings referred to in Section
9.07 or any direction referred to in Section 9.12.&nbsp; If any
such record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act, or such notice,
declaration, request or direction, may be given before or after
such record date, but only the Holders of record at the close of
business on the record date shall be deemed to be Holders for the
purposes of determining (i) whether Holders of the requisite
proportion of the Outstanding Bonds have authorized or agreed or
consented to such Act (and for that purpose the Outstanding Bonds
shall be computed as of the record date) and/or (ii) which Holders
may revoke any such Act (notwithstanding subsection (e) of this
Section); and any such Act, given as aforesaid, shall be effective
whether or not the Holders which authorized or agreed or consented
to such Act remain Holders after such record date and whether or
not the Bonds held by such Holders remain Outstanding after such
record date.</font></p>

<p><a name="_Toc101868269"><b><font size="3" face=
"Times New Roman">SECTION
1.05.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Notices, Etc. to Trustee and
Company</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face="Times New Roman">Except as otherwise
provided herein, any request, demand, authorization, direction,
notice, consent, election, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made or
served upon, given or furnished to, or filed with, the Trustee by
any Holder or by the Company, or the Company by the Trustee or by
any Holder, shall be sufficient for every purpose hereunder (unless
otherwise expressly provided herein) if the same shall be in
writing and delivered personally to the addressee (which delivery,
with respect to the Trustee, shall be made to its Corporate Trust
Office and addressed to the attention of the Corporate Trust
Administration), or transmitted by facsimile transmission or other
direct written electronic means to such telephone number or other
electronic communications address as the parties hereto shall from
time to time designate, or transmitted by registered or certified
mail, return receipt requested, or overnight courier guaranteeing
next day delivery, charges prepaid, to the applicable address set
forth opposite such party&rsquo;s name below or to such other
address as either party hereto may from time to time
designate:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
to the Trustee, to:</font></p>

<p><font size="3" face=
"Times New Roman">&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;The
Bank of New York Trust Company, N.A.<br />
&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;550
Kearny Street, Suite 600<br />
&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;San
Francisco, California&nbsp; 94108<br />
&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;Attention:
Corporate Trust Administration<br />
&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;Fax:&nbsp;
(415) 399-1647</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
to the Company, to:</font></p>

<p><font size="3" face=
"Times New Roman">&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;Pacific
Gas and Electric Company<br />
&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;77
Beale Street (street address)<br />
&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;P.O.
Box 770000<br />
&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;San
Francisco, California 94177<br />
&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;Attention:
Treasurer and Assistant Treasurer<br />
&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;Fax:&nbsp;
(415) 973-4343/267-7265</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
communication contemplated herein shall be deemed to have been
made, given, furnished and filed if personally delivered, on the
date of delivery, if transmitted by facsimile transmission or other
direct written electronic means, on the date of transmission, and
if transmitted by registered or certified mail or reputable
overnight courier, on the date of receipt.</font></p>

<p><a name="_Toc101868270"><b><font size="3" face=
"Times New Roman">SECTION
1.06.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Notice to Holders of Bonds;
Waiver</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of any event, such notice shall be
sufficiently given, and shall be deemed given, to Holders if in
writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at the address of such Holder as it appears
in the Bond Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such
notice.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such
notice to Holders by mail, then such notification as shall be made
with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder.&nbsp; In any case where
notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with
respect to other Holders.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
notice required by this Indenture may be waived in writing by the
Person entitled to receive such notice, either before or after the
event otherwise to be specified therein, and such waiver shall be
the equivalent of such notice.&nbsp; Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance
upon such waiver.</font></p>

<p><a name="_Toc101868271"><b><font size="3" face=
"Times New Roman">SECTION
1.07.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Conflict With Trust Indenture
Act</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
any provision of this Indenture limits, qualifies or conflicts with
another provision hereof which is required or deemed to be included
in this Indenture by any provision of the Trust Indenture Act, the
provision required or deemed to be included by the Trust Indenture
Act shall control; and if any provision hereof otherwise conflicts
with the Trust Indenture Act, or limits, qualifies or conflicts
with the duties imposed by Section 318(c) of the Trust Indenture
Act, the Trust Indenture Act, including the duties imposed by
Section 318(c) of the Trust Indenture Act, shall
control.</font></p>

<p><a name="_Toc101868272"><b><font size="3" face=
"Times New Roman">SECTION
1.08.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Effect of Headings and Table
of Contents</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Article and Section headings in this Indenture and the Table of
Contents are for convenience only and shall not affect the
construction hereof.</font></p>

<p><a name="_Toc101868273"><b><font size="3" face=
"Times New Roman">SECTION
1.09.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Successors and
Assigns</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
covenants and agreements in this Indenture by the Company and the
Trustee shall bind their respective successors and assigns, whether
so expressed or not.</font></p>

<p><a name="_Toc101868274"><b><font size="3" face=
"Times New Roman">SECTION
1.10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Separability
Clause</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
case any provision in this Indenture or the Bonds shall be held to
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.</font></p>

<p><a name="_Toc101868275"><b><font size="3" face=
"Times New Roman">SECTION
1.11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Benefits of
Indenture</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nothing
in this Indenture or the Bonds, express or implied, shall give to
any Person, other than the parties hereto, their successors
hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.</font></p>

<p><a name="_Toc101868276"><b><font size="3" face=
"Times New Roman">SECTION1.12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Governing
Law</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Indenture and the Bonds shall be governed by, and construed and
enforced in accordance with, the laws of the State of California
without regard to the principles of conflicts of laws thereunder,
except to the extent that the Trust Indenture Act shall be
applicable.</font></p>

<p><a name="_Toc101868277"><b><font size="3" face=
"Times New Roman">SECTION
1.13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Legal
Holidays</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Bond shall not be a Business Day at any
Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Bonds other than a provision in Bonds of any
series, or any Tranche thereof, or in the indenture supplemental
hereto, Board Resolution or Officer&rsquo;s Certificate which
establishes the terms of the Bonds of such series or Tranche, which
specifically states that such provision shall apply in lieu of this
Section) payment of interest or principal and premium, if any, need
not be made at such Place of Payment on such date, but may be made
on the next succeeding Business Day at such Place of Payment with
the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity, and, if such payment
is made or duly provided for on such Business Day, no interest
shall accrue on the amount so payable for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as
the case may be, to such Business Day.</font></p>

<p><a name="_Toc101868278"><b><font size="3" face=
"Times New Roman">SECTION
1.14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Investment of Cash Held by
Trustee</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
cash held by the Trustee or any Paying Agent under any provision of
this Indenture shall, except as otherwise provided in Article VIII,
at the request of the Company evidenced by Company Order, be
invested or reinvested in Investment Securities designated by the
Company (such Company Order to contain a representation to the
effect that the securities designated therein constitute Investment
Securities), and any interest on such Investment Securities shall
be promptly paid over to the Company as received.&nbsp; Such
Investment Securities shall be held subject to the same provisions
hereof as the cash used to purchase the same, but upon a like
request of the Company shall be sold, in whole or in designated
part, and the proceeds of such sale shall be held subject to the
same provisions hereof as the cash used to purchase the Investment
Securities so sold.&nbsp; If such sale shall produce a net sum less
than the cost of the Investment Securities so sold, the Company
shall pay to the Trustee or any such Paying Agent, as the case may
be, such amount in cash as, together with the net proceeds from
such sale, shall equal the cost of the Investment Securities so
sold, and if such sale shall produce a net sum greater than the
cost of the Investment Securities so sold, the Trustee or any such
Paying Agent, as the case may be, shall promptly pay over to the
Company an amount in cash equal to such excess.&nbsp; In no event
shall the Trustee be liable for any loss incurred in connection
with the sale of any Investment Security pursuant to this
Section.&nbsp; In the absence of a Company Order directing the
Trustee to invest cash held by the Trustee hereunder, the Company
hereby directs the Trustee to invest such cash in Government
Obligations having maturities of less than one year until the
Trustee shall have received a Company Order directing the Trustee
to invest such cash in another Investment Security.&nbsp; The
Trustee shall not be accountable or liable for any losses resulting
from the sale or depreciation in the market value of investments
made pursuant to this Indenture and Company Orders.</font></p>

<p align="center"><a name="_Toc101868279"><b><font size="3" face=
"Times New Roman">ARTICLE II<br />
<br />
BOND FORMS</font></b></a></p>

<p><a name="_Toc101868280"><b><font size="3" face=
"Times New Roman">SECTION
2.01.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Forms
Generally</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
definitive Bonds of each series shall be in substantially the form
or forms established in the indenture supplemental hereto
establishing such series, or in a Board Resolution establishing
such series, or in an Officer&rsquo;s Certificate pursuant to such
a supplemental indenture or Board Resolution, in any case with such
appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and
such legends or endorsements placed thereon as may be required to
comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such
Bonds, as evidenced by their execution of the Bonds.&nbsp; If the
form or forms of Bonds of any series are established in a Board
Resolution or in an Officer&rsquo;s Certificate pursuant to a
supplemental indenture or a Board Resolution, such Board Resolution
and Officer&rsquo;s Certificate, if any, shall be delivered to the
Trustee at or prior to the delivery of the Company Order
contemplated by Section 5.01 for the authentication and delivery of
such Bonds.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bonds of each series shall be issuable in registered form without
coupons.&nbsp; The definitive Bonds shall be produced in such
manner as shall be determined by the officers executing such Bonds,
as evidenced by their execution thereof.</font></p>

<p><a name="_Toc101868281"><b><font size="3" face=
"Times New Roman">SECTION 2.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Form
of Trustee&rsquo;s Certificate of
Authentication</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Trustee&rsquo;s certificate of authentication shall be in
substantially the form set forth below:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
is one of the Bonds of the series designated therein referred to in
the within-mentioned Indenture.</font></p>

<p><font size="3" face=
"Times New Roman">&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;
[NAME OF TRUSTEE], as Trustee</font></p>

<p><font size="3" face=
"Times New Roman">&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;By:<u>
&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;<br />

</u>
&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;&nbsp;Authorized
Signatory</font></p>

<p align="center"><a name="_Toc101868282"><font size="3" face=
"Times New Roman"><br />
<b>ARTICLE III</b><br />
<br />
<b>THE BONDS</b></font></a></p>

<p><a name="_Toc101868283"><b><font size="3" face=
"Times New Roman">SECTION
3.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Amount Unlimited; Issuable in
Series</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
aggregate principal amount of Bonds which may be authenticated and
delivered under this Indenture is unlimited.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bonds may be issued in one or more series.&nbsp; Subject to the
penultimate paragraph of this Section, prior to the authentication
and delivery of Bonds of any series there shall be established by
specification in a supplemental indenture or in a Board Resolution,
or in an Officer&rsquo;s Certificate pursuant to a supplemental
indenture or a Board Resolution:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
title of the Bonds of such series (which shall distinguish the
Bonds of such series from Bonds of all other series);</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
limit upon the aggregate principal amount of the Bonds of such
series which may be authenticated and delivered under this
Indenture (except for Bonds authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of,
other Bonds of such series pursuant to Section 3.04, 3.05, 3.06,
6.06 or 13.06 and except for any Bonds which, pursuant to Section
3.03, are deemed never to have been authenticated and delivered
hereunder);</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Persons (without specific identification) to whom interest on Bonds
of such series, or any Tranche thereof, shall be payable on any
Interest Payment Date, if other than the Persons in whose names
such Bonds (or one or more Predecessor Bonds) are registered at the
close of business on the Regular Record Date for such
interest;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
date or dates on which the principal of the Bonds of such series,
or any Tranche thereof, is payable or any formula or other method
or other means by which such date or dates shall be determined, by
reference to an index or other fact or event ascertainable outside
of this Indenture or otherwise (without regard to any provisions
for redemption, prepayment, acceleration, purchase or extension)
and the right, if any, to extend the Maturity of the Bonds of such
series, or any Tranche thereof, and the duration of any such
extension;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
rate or rates (or method of determination thereof) at which any
Bonds of such series, or any Tranche thereof, shall bear interest,
if any (including the rate or rates at which overdue principal
shall bear interest, if different from the rate or rates at which
such Bonds shall bear interest prior to Maturity, and, if
applicable, the rate or rates at which overdue premium or interest
shall bear interest, if any), or any formula or other method or
other means by which such rate or rates shall be determined, by
reference to an index or other fact or event ascertainable outside
of this Indenture or otherwise; the date or dates from which any
such interest shall accrue (or method of determination thereof);
the Interest Payment Dates on which any such interest shall be
payable (or method of determination thereof) and the Regular Record
Date, if any (which, in either case or both, if so provided in or
pursuant to such Board Resolution or supplemental indenture, may be
determined by the Company from time to time and set forth in the
Bonds of such series, or any Tranche thereof, issued from time to
time) for any such interest payable on any Interest Payment Date;
the basis of computation of interest if other than as provided in
Section 3.10; and the right, if any, to extend the interest payment
periods and the duration of any such extension;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
place or places at which and/or the methods (if other than as
provided elsewhere in this Indenture) by which (i) the principal of
and premium, if any, and interest, if any, on Bonds of such series,
or any Tranche thereof, shall be payable, (ii) registration of
transfer of Bonds of such series, or any Tranche thereof, may be
effected, (iii) exchanges of Bonds of such series, or any Tranche
thereof, may be effected and (iv) notices and demands to or upon
the Company in respect of the Bonds of such series, or any Tranche
thereof, and this Indenture may be made, given, furnished, filed or
served, if other than as provided in Section 1.05; the Bond
Registrar and any Paying Agent or Agents for such series or
Tranche; and, if such is the case, that the principal of such Bonds
shall be payable without the presentment or surrender
thereof;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if
the time for the giving of redemption notices for such series of
Bonds, or any Tranche thereof, shall be other than as provided in
Section 6.04, such different time, and the period or periods within
which or the date or dates on which, the price or prices at which
and the terms and conditions upon which the Bonds of such series,
or any Tranche thereof, may be redeemed, in whole or in part, at
the option of the Company (including, without limitation, any
provision for the payment of a &ldquo;make-whole&rdquo;,
yield-maintenance or similar premium in connection with the
redemption of Bonds of such series during a &ldquo;no-call&rdquo;
or other period during which such Bonds are generally not subject
to optional redemption by the Company) and any restrictions on such
redemptions;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
obligation or obligations, if any, of the Company to redeem,
purchase or repay the Bonds of such series, or any Tranche thereof,
pursuant to any sinking fund or other mandatory redemption
provisions or at the option of a Holder thereof and the period or
periods within which or the date or dates on which, the price or
prices at which and the terms and conditions upon which such Bonds
shall be redeemed, purchased or repaid, in whole or in part,
pursuant to such obligation, and applicable exceptions to the
requirements of Section 6.04 in the case of mandatory redemption or
redemption or repayment at the option of the Holder;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
denominations in which Bonds of such series, or any Tranche
thereof, shall be issuable if other than denominations of One
Thousand Dollars ($1,000) and any integral multiple
thereof;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
currency or currencies, including composite currencies, in which
payment of the principal of and premium, if any, and interest, if
any, on the Bonds of such series, or any Tranche thereof, shall be
payable (if other than in Dollars); it being understood that, for
purposes of calculations under this Indenture, any amounts
denominated in a currency other than Dollars or in a composite
currency shall be converted to Dollar equivalents by calculating
the amount of Dollars which could have been purchased by the amount
of such other currency based on such quotations or methods of
determination as shall be specified pursuant to this clause
(j);</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if
the principal of or premium, if any, or interest, if any, on the
Bonds of such series, or any Tranche thereof, are to be payable, at
the election of the Company or a Holder thereof, in a coin or
currency other than that in which the Bonds are stated to be
payable, the coin or currency in which payment of any amount as to
which such election is made will be payable, the period or periods
within which, and the terms and conditions upon which, such
election may be made; it being understood that, for purposes of
calculations under this Indenture, any such election shall be
required to be taken into account, in the manner contemplated in
clause (j) of this paragraph, only after such election shall have
been made;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if
the principal of or premium, if any, or interest, if any, on the
Bonds of such series, or any Tranche thereof, are to be payable, or
are to be payable at the election of the Company or a Holder
thereof, in securities or other property, the type and amount of
such securities or other property, or the formula or other method
or other means by which such amount shall be determined, and the
period or periods within which, and the terms and conditions upon
which, any such election may be made; it being understood that all
calculations under this Indenture shall be made on the basis of the
fair market value of such securities or the Fair Value of such
other property, in either case determined as of the most recent
practicable date, except that, in the case of any amount of
principal or interest that may be so payable at the election of the
Company or a Holder, if such election shall not yet have been made,
such calculations shall be made on the basis of the amount of
principal or interest, as the case may be, that would be payable if
no such election were made;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if
the amount payable in respect of principal of or premium, if any,
or interest, if any, on the Bonds of such series, or any Tranche
thereof, may be determined with reference to an index, formula or
other fact or event ascertainable outside of this Indenture, the
manner in which such amounts shall be determined (to the extent not
established pursuant to clause (e) of this paragraph); it being
understood that all calculations under this Indenture shall be made
on the basis of the amount that would be payable as principal if
such principal were due, or on the basis of the interest rates in
effect, as the case may be, on the date next preceding the date of
such calculation;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if
other than the entire principal amount thereof, the portion of the
principal amount of Bonds of such series, or any Tranche thereof,
which shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 9.02;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
terms, if any, pursuant to which the Bonds of such series, or any
Tranche thereof, may be converted into or exchanged for shares of
capital stock or other securities of the Company or any other
Person;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
obligations or instruments, if any, which shall be considered to be
Eligible Obligations in respect of the Bonds of such series, or any
Tranche thereof, denominated in a currency other than Dollars or in
a composite currency, and any additional or alternative provisions
for the reinstatement of the Company&rsquo;s indebtedness in
respect of such Bonds after the satisfaction and discharge thereof
as provided in Section 8.01;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) whether the Bonds of such
series, or any Tranche thereof, are to be issued as Global Bonds
and if such Bonds are to be issued as Global Bonds, the Depositary
for such Global Bonds, (ii) any limitations on the rights of the
Holder or Holders of such Bonds to transfer or exchange the same or
to obtain the registration of transfer thereof, if other than as
provided in Section 3.05, (iii) any limitations on the rights of
the Holder or Holders thereof to obtain certificates therefor in
definitive form in lieu of temporary form, and (iv) any and all
other matters incidental to such Bonds;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
the extent not established pursuant to clause (q) of this
paragraph, any limitations on the rights of the Holders of the
Bonds of such series, or any Tranche thereof, to transfer or
exchange such Bonds or to obtain the registration of transfer
thereof; and if a service charge will be made for the registration
of transfer or exchange of Bonds of such series, or any Tranche
thereof, the amount or terms thereof;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
exceptions to Section 1.13, or variation in the definition of
Business Day, with respect to the Bonds of such series, or any
Tranche thereof;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if
the principal of Bonds of such series is payable from time to time
without presentation or surrender, any method or manner of
calculating the principal amount of Bonds of such series that is
Outstanding at any time for purposes of this Indenture, if other
than as specified in the last proviso of the definition of
&ldquo;Outstanding&rdquo;; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
other terms of the Bonds of such series, or any Tranche
thereof.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
respect to Bonds of a series subject to a Periodic Offering, the
indenture supplemental hereto or the Board Resolution which
establishes such series, or the Officer&rsquo;s Certificate
pursuant to such supplemental indenture or Board Resolution, as the
case may be, may provide general terms or parameters for Bonds of
such series and provide either that the specific terms of Bonds of
such series, or any Tranche thereof, shall be specified in a
Company Order or that such terms shall be determined by the Company
or its agents in accordance with procedures specified in a Company
Order as contemplated by Section 5.01(b).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Anything
herein to the contrary notwithstanding, the Trustee shall be under
no obligation to authenticate and deliver Bonds of any series the
terms of which, established as contemplated by this Section, would
adversely affect the rights, duties, obligations, liabilities or
immunities of the Trustee under this Indenture or
otherwise.</font></p>

<p><a name="_Toc101868284"><b><font size="3" face=
"Times New Roman">SECTION
3.02.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Denominations</u></font></b></a><b>
<u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise provided as contemplated by Section 3.01 with respect to
any series of Bonds, or any Tranche thereof, the Bonds of each
series shall be issuable in denominations of One Thousand Dollars
($1,000) and any integral multiple thereof.</font></p>

<p><a name="_Toc101868285"><b><font size="3" face=
"Times New Roman">SECTION
3.03.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Execution, Dating,
Certificate of Authentication</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise provided as contemplated by Section 3.01 with respect to
any series of Bonds, or any Tranche thereof, the Bonds shall be
executed on behalf of the Company by any two of the following: the
President, the Chief Executive Officer, any Vice President, the
Chief Financial Officer, the Treasurer or any Assistant
Treasurer.&nbsp; The corporate seal of the Company may be affixed
thereto or reproduced thereon and attested by any Authorized
Officer.&nbsp; The signature of any or all of these officers on the
Bonds may be manual or facsimile.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bonds
bearing the manual or facsimile signatures of individuals who were
at the time of execution the President, the Chief Executive
Officer, a Vice President, the Chief Financial Officer, the
Treasurer or an Assistant Treasurer of the Company shall bind the
Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and
delivery of such Bonds or did not hold such offices at the date of
such Bonds.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise specified as contemplated by Section 3.01 with respect to
any series of Bonds, or any Tranche thereof, each Bond shall be
dated the date of its authentication.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise specified as contemplated by Section 3.01 with respect to
any series of Bonds, or any Tranche thereof, no Bond shall be
entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Bond a
certificate of authentication substantially in the form provided
for herein executed by the Trustee or an Authenticating Agent by
manual signature of an authorized officer thereof, and such
certificate upon any Bond shall be conclusive evidence, and the
only evidence, that such Bond has been duly authenticated and
delivered hereunder and is entitled to the benefits of this
Indenture.&nbsp; Notwithstanding the foregoing, if any Bond shall
have been authenticated and delivered hereunder to the Company, or
any Person acting on its behalf, but shall never have been issued
and sold (or pledged) by the Company, and (a) the Company shall
deliver such Bond to the Bond Registrar for cancellation or shall
cancel such Bond and deliver evidence of such cancellation to the
Trustee, in each case as provided in Section 3.09, and (b) the
Company, at its election, shall deliver to the Trustee a written
statement (which need not comply with Section 1.02 and need not be
accompanied by an Officer&rsquo;s Certificate or an Opinion of
Counsel) stating that such Bond has never been issued and sold (or
pledged) by the Company, then, for all purposes of this Indenture,
such Bond shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits
hereof.</font></p>

<p><a name="_Toc101868286"><b><font size="3" face=
"Times New Roman">SECTION
3.04.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Temporary
Bonds</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pending
the preparation of definitive Bonds of any series, or any Tranche
thereof, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Bonds which are
printed, lithographed, typewritten, mimeographed, photocopied or
otherwise produced, in any authorized denomination, substantially
of the tenor of the definitive Bonds in lieu of which they are
issued, with such appropriate insertions, omissions, substitutions
and other variations as the officers executing such Bonds may
determine, as evidenced by their execution of such
Bonds.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as otherwise specified as contemplated by Section 3.01 with respect
to the Bonds of any series, or any Tranche thereof, after the
preparation of definitive Bonds of such series or Tranche, the
temporary Bonds of such series or Tranche shall be exchangeable,
without charge to the Holder thereof, for definitive Bonds of such
series or Tranche upon surrender of such temporary Bonds at the
office or agency of the Company maintained pursuant to Section 7.02
in a Place of Payment for such Bonds.&nbsp; Upon such surrender of
temporary Bonds, the Company shall, except as otherwise specified
as contemplated by Section 3.01, execute and the Trustee shall
authenticate and deliver in exchange therefor definitive Bonds of
the same series and Tranche, of authorized denominations and of
like tenor and aggregate principal amount.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until
exchanged in full as hereinabove provided, temporary Bonds shall in
all respects be entitled to the same benefits under this Indenture
as definitive Bonds of the same series and Tranche and of like
tenor authenticated and delivered hereunder.</font></p>

<p><a name="_Toc101868287"><b><font size="3" face=
"Times New Roman">SECTION
3.05.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Registration, Registration of
Transfer and Exchange</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall cause to be kept in one of the offices designated
pursuant to Section&nbsp;7.02, with respect to the Bonds of each
series, or any Tranche thereof, a register (the &ldquo;Bond
Register&rdquo;) in which, subject to such reasonable regulations
as it may prescribe, the Company shall provide for the registration
of Bonds of such series or Tranche and the registration of transfer
thereof.&nbsp; Pursuant to Section 3.01(f), the Company shall
designate one Person to maintain the Bond Register for the Bonds of
each series, and such Person is referred to herein, with respect to
such series, as the &ldquo;Bond Registrar&rdquo;.&nbsp; Anything
herein to the contrary notwithstanding, the Company may designate
one or more of its offices as an office in which a Bond Register
with respect to the Bonds of one or more series, or any Tranche or
Tranches thereof, shall be maintained, and the Company may
designate itself the Bond Registrar with respect to one or more of
such series.&nbsp; The Bond Register(s) shall be open for
inspection by the Trustee and the Company at all reasonable
times.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as otherwise specified as contemplated by Section 3.01 with respect
to the Bonds of any series, or any Tranche thereof, and except as
provided below with respect to Global Bonds, upon surrender for
registration of transfer of any Bond of such series or Tranche at
the office or agency of the Company maintained pursuant to Section
7.02 in a Place of Payment for such series or Tranche, the Company
shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more
new Bonds of the same series and Tranche, of authorized
denominations and of like tenor and aggregate principal
amount.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as otherwise specified as contemplated by Section 3.01 with respect
to the Bonds of any series, or any Tranche thereof, any Bond of
such series or Tranche may be exchanged at the option of the
Holder, for one or more new Bonds of the same series and Tranche,
of authorized denominations and of like tenor and aggregate
principal amount, upon surrender of the Bonds to be exchanged at
any such office or agency.&nbsp; Whenever any Bonds are so
surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Bonds which the Holder
making the exchange is entitled to receive.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
Bonds delivered upon any registration of transfer or exchange of
Bonds shall be valid obligations of the Company, evidencing the
same obligation, and entitled to the same benefits under this
Indenture, as the Bonds surrendered upon such registration of
transfer or exchange.&nbsp; Every Bond presented or surrendered for
registration of transfer shall be duly endorsed or shall be
accompanied by a written instrument of transfer in form
satisfactory to the Company, the Trustee or the Bond Registrar, as
the case may be, duly executed by the Holder thereof or his
attorney duly authorized in writing.&nbsp; Every Bond presented or
surrendered for exchange shall (if so required by the Company, the
Trustee or the Bond Registrar) be duly endorsed or shall be
accompanied by a written instrument of transfer in form
satisfactory to the Company, the Trustee or the Bond Registrar, as
the case may be, duly executed by the Holder thereof or such
Holder&rsquo;s attorney duly authorized in writing.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise specified as contemplated by Section 3.01 with respect to
Bonds of any series, or any Tranche thereof, no service charge
shall be made for any registration of transfer or exchange of
Bonds, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Bonds,
other than exchanges pursuant to Section 3.04, 6.06 or 13.06 not
involving any transfer.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall not be required to execute or to provide for the
registration of transfer of or the exchange of (a) Bonds of any
series, or any Tranche thereof, during a period of fifteen (15)
days immediately preceding the date notice is to be given
identifying the serial numbers of the Bonds of such series or
Tranche called for redemption or (b) any Bond so selected for
redemption in whole or in part, except the unredeemed portion of
any Bond being redeemed in part.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
any other provision of this Section, unless and until it is
exchanged in whole or in part for Bonds in definitive form, a
Global Bond representing all or a portion of the Bonds of a series,
or Tranche thereof,&nbsp; may not be transferred except as a whole
by the Depositary for such series or Tranche to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by such Depositary or any
such nominee to a successor Depositary for such series, or Tranche
thereof, or a nominee of such successor Depositary.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
at any time (i) the Depositary for the Bonds of a series, or a
Tranche thereof, notifies the Company that it is unwilling or
unable to continue as Depositary for the Bonds of such series or
Tranche or that it is no longer eligible under Section 3.13, and in
any such case the Company has not appointed a successor Depositary
within ninety (90) days after delivery of such notice, (ii) there
has occurred and is continuing an Event of Default, or (iii) the
Company in its sole discretion determines that the Bonds of any
series, or any Tranche thereof, issued in the form of one or more
Global Bonds shall no longer be represented by such Global Bond or
Bonds, then in each such event the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and
delivery of definitive Bonds of such series or Tranche, will
authenticate and deliver, Bonds of such series in definitive form
and in an aggregate principal amount equal to the principal amount
of the Global Bond or Bonds representing such series or Tranche in
exchange for such Global Bond or Bonds.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, if specified by the Company pursuant to Section 3.01 with
respect to a series of Bonds, or Tranche thereof, the Depositary
for such series of Bonds may surrender a Global Bond for such
series or Tranche of Bonds in exchange in whole or in part for
Bonds of such series or Tranche in definitive form on such terms as
are acceptable to the Company and such Depositary.&nbsp; Thereupon,
the Company shall authenticate and deliver, without
charge:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
to each Person specified by such Depositary a new Bond or Bonds of
the same series or Tranche, of any authorized denomination as
requested by such Person in aggregate principal amount equal to and
in exchange for such Person&rsquo;s beneficial interest in the
Global Bonds; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
to such Depositary a new Global Bond in a denomination equal to the
difference, if any, between the principal amount of the surrendered
Global Bond and the aggregate principal amount of Bonds delivered
to Holders thereof.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bonds
issued in exchange for a Global Bond pursuant to this Section shall
be registered in such names and in such authorized denominations as
the Depositary for such Global Bond, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct
the Trustee.&nbsp; The Trustee shall deliver such Bonds to the
Persons in whose names such Bonds are so registered.</font></p>

<p><a name="_Toc101868288"><b><font size="3" face=
"Times New Roman">SECTION
3.06.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Mutilated, Destroyed, Lost
and Stolen Bonds</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
any mutilated Bond is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange
therefor a new Bond of the same series and Tranche, and of like
tenor and principal amount and bearing a number not
contemporaneously outstanding.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
there shall be delivered to the Company and the Trustee (a)
evidence to their satisfaction of the ownership of and the
destruction, loss or theft of any Bond and (b) such security or
indemnity as may be reasonably required by them to save each of
them and any agent of either of them harmless, then, in the absence
of notice to the Company or the Trustee that such Bond is held by a
protected purchaser, the Company shall execute and the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost
or stolen Bond, a new Bond of the same series and Tranche, and of
like tenor and principal amount and bearing a number not
contemporaneously outstanding.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
the foregoing, in case any such mutilated, destroyed, lost or
stolen Bond has become or is about to become due and payable, the
Company in its discretion may, but subject to compliance with the
foregoing conditions, instead of issuing a new Bond, pay such
Bond.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the issuance of any new Bond under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any
other reasonable expenses (including the fees and expenses of the
Trustee) connected therewith.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Every
new Bond of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Bond shall constitute an additional
contractual obligation of the Company, whether or not the
destroyed, lost or stolen Bond shall be at any time enforceable by
anyone other than the Holder of such new Bond, and any such new
Bond shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Bonds of such
series duly issued hereunder.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Bonds.</font></p>

<p><a name="_Toc101868289"><b><font size="3" face=
"Times New Roman">SECTION
3.07.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Payment of Interest; Interest
Rights Preserved</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise specified as contemplated by Section 3.01 with respect to
the Bonds of any series, or any Tranche thereof, interest on any
Bond which is payable, and is punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the Person in whose
name that Bond (or one or more Predecessor Bonds) is registered at
the close of business on the Regular Record Date for such interest,
except that, unless otherwise provided in the Bonds of such series,
interest payable on the Stated Maturity of the principal of a Bond
shall be paid to the Person to whom principal is paid.&nbsp; The
initial payment of interest on any Bond of any series which is
issued between a Regular Record Date and the related Interest
Payment Date shall be payable as provided in such Bond or in a
Board Resolution, Officer&rsquo;s Certificate or supplemental
indenture pursuant to Section 3.01 with respect to the related
series of Bonds.&nbsp; Except in the case of a Global Bond at the
option of the Company, interest on any series of Bonds may be paid
by (i) check mailed to the address of the Person entitled thereto
as it shall appear on the Bond Register of such series or (ii) wire
transfer in immediately available funds at such place and to such
account as designated in writing by the Person entitled thereto as
specified in the Bond Register of such series.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
interest on any Bond of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date
(herein called &ldquo;Defaulted Interest&rdquo;) shall forthwith
cease to be payable to the Holder on the related Regular Record
Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case,
as provided in clause (a) or (b) below:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Bonds of such series (or their
respective Predecessor Bonds) are registered at the close of
business on a date (herein called a &ldquo;Special Record
Date&rdquo;) for the payment of such Defaulted Interest, which
shall be fixed in the following manner.&nbsp; The Company shall
notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Bond of such series and the date of the
proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit on
or prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause
provided.&nbsp; Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall be not
more than thirty (30) days and not less than ten (10) days prior to
the date of the proposed payment and not less than twenty-five (25)
days after the receipt by the Trustee of the notice of the proposed
payment.&nbsp; The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of the
Company, shall, not less than fifteen (15) days prior to such
Special Record Date, cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be given
to each Holder of Bonds of such series.&nbsp; Notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall
be paid to the Persons in whose names the Bonds of such series (or
their respective Predecessor Bonds) are registered at the close of
business on such Special Record Date.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company may make payment of any Defaulted Interest on the Bonds of
any series in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Bonds may be
listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to the foregoing provisions of this Section and Section 3.05, each
Bond delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Bond shall carry the
rights to interest accrued and unpaid, and to accrue, which were
carried by such other Bond.</font></p>

<p><a name="_Toc101868290"><b><font size="3" face=
"Times New Roman">SECTION
3.08.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Persons Deemed
Owners</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Bond is registered as the
absolute owner of such Bond for the purpose of receiving payment of
principal of and premium, if any, and (subject to Section 3.07)
interest, if any, on such Bond and for all other purposes
whatsoever, whether or not such Bond be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.</font></p>

<p><a name="_Toc101868291"><b><font size="3" face=
"Times New Roman">SECTION
3.09.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Cancellation by Bond
Registrar</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
Bonds surrendered for payment, redemption, registration of transfer
or exchange shall, if surrendered to any Person other than the Bond
Registrar, be delivered to the Bond Registrar and, if not
theretofore canceled, shall be promptly canceled by the Bond
Registrar.&nbsp; The Company may at any time deliver to the Bond
Registrar for cancellation any Bonds previously authenticated and
delivered hereunder which the Company may have acquired in any
manner whatsoever or which the Company shall not have issued and
sold (or pledged), and all Bonds so delivered shall be promptly
canceled by the Bond Registrar.&nbsp; No Bonds shall be
authenticated in lieu of or in exchange for any Bonds canceled as
provided in this Section, except as expressly permitted by this
Indenture.&nbsp; All canceled Bonds held by the Bond Registrar
shall be disposed of in accordance with the Bond Registrar&rsquo;s
then customary practice for disposing of securities, unless
otherwise directed by a Company Order.</font></p>

<p><a name="_Toc101868292"><b><font size="3" face=
"Times New Roman">SECTION
3.10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Computation of
Interest</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as otherwise specified as contemplated by Section 3.01 for Bonds of
any series, or any Tranche thereof, interest on the Bonds of each
series shall be computed on the basis of a three hundred sixty
(360) day year consisting of twelve (12) thirty (30) day months
and, with respect to any period less than a full calendar month, on
the basis of the actual number of days elapsed during such
period.</font></p>

<p><a name="_Toc101868293"><b><font size="3" face=
"Times New Roman">SECTION
3.11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Payment to Be in Proper
Currency</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the case of the Bonds of any series, or any Tranche thereof,
denominated in any currency other than Dollars or in a composite
currency (the &ldquo;Required Currency&rdquo;), except as otherwise
specified with respect to such Bonds as contemplated by Section
3.01, the obligation of the Company to make any payment of the
principal thereof, or the premium, if any, or interest, if any,
thereon, shall not be discharged or satisfied by any tender by the
Company, or recovery by the Trustee, in any currency other than the
Required Currency, except to the extent that such tender or
recovery shall result in the Trustee timely holding the full amount
of the Required Currency then due and payable.&nbsp; If any such
tender or recovery is in a currency other than the Required
Currency, the Trustee may take such actions as it considers
appropriate to exchange such currency for the Required
Currency.&nbsp; The costs and risks of any such exchange, including
without limitation the risks of delay and exchange rate
fluctuation, shall be borne by the Company, the Company shall
remain fully liable for any shortfall or delinquency in the full
amount of Required Currency then due and payable, and in no
circumstances shall the Trustee be liable therefor except in the
case of its negligence or willful misconduct.</font></p>

<p><a name="_Toc101868294"><b><font size="3" face=
"Times New Roman">SECTION
3.12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>CUSIP
Numbers</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company, in issuing the Bonds, may use &ldquo;CUSIP&rdquo; or other
similar numbers (if then generally in use), and, if so, the Trustee
or Bond Registrar may use CUSIP or such other numbers in notices of
redemption as a convenience to Holders; provided that any such
notice may state that no representation is made as to the
correctness of such numbers either as printed on the Bonds or as
contained in any notice of a redemption and that reliance may be
placed only on the other identification numbers printed on the
Bonds, in which case none of the Company or, as the case may be,
the Trustee or the Bond Registrar, or any agent of any of them,
shall have any liability in respect of any CUSIP number used on any
such notice, and any such redemption shall not be affected by any
defect in or omission of such numbers.&nbsp; The Company will
promptly notify the Trustee of any change in the CUSIP
numbers.</font></p>

<p><a name="_Toc101868295"><b><font size="3" face=
"Times New Roman">SECTION
3.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Global
Bonds</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Company shall establish pursuant to Section 3.01(q) that the
Bonds of a series, or a Tranche thereof, are to be issued in whole
or in part in the form of one or more Global Bonds, then the
Company shall execute and the Trustee shall, in accordance with
this Section and the Company Order with respect to such series or
Tranche, authenticate and deliver one or more Global Bonds in
temporary or permanent form that (i) shall represent and shall be
denominated in an aggregate amount equal to the aggregate principal
amount of the Outstanding Bonds of such series or Tranche, to be
represented by one or more Global Bonds, (ii) shall be registered
in the name of the Depositary for such Global Bond or Bonds or the
nominee of such Depositary, (iii) shall be delivered by the Trustee
to such Depositary or pursuant to such Depositary&rsquo;s
instruction or held by the Trustee as custodian for the Depositary,
and (iv) shall bear a legend substantially to the following
effect:&nbsp; &ldquo;Unless and until it is exchanged in whole or
in part for Bonds in definitive form, this Bond may not be
transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor
Depositary.&rdquo;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company may at any time designate another Person to act as
Depositary in place of the Person designated pursuant to Section
3.01(q).&nbsp; Each Depositary designated pursuant to Section
3.01(q) or otherwise for a Global Bond must, at the time of its
designation and at all times while it serves as Depositary, be a
clearing agency registered under the Exchange Act and any other
applicable statute or regulation.</font></p>

<p align="center"><a name="_Toc101868296"><b><font size="3" face=
"Times New Roman">ARTICLE IV<br />
<br />
BONDS PREVIOUSLY ISSUED</font></b></a></p>

<p><a name="_Toc101868297"><b><font size="3" face=
"Times New Roman">SECTION
4.01.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Continuation of Certain
Series of Bonds Issued Under the Prior
Indenture</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the Prior Indenture, the Company established Bonds of the First
Series, Bonds of the Second Series, Bonds of the Third Series,
Bonds of the Fourth Series and Bonds of the Fifth Series
(collectively, &ldquo;Bonds of the Initial Series&rdquo;) and Bonds
of the Eleventh Series, and such bonds issued under the Prior
Indenture are hereby continued under this Indenture, constitute
&ldquo;Bonds&rdquo; under this Indenture and are hereafter governed
by and subject to the provisions hereof.&nbsp; All other bonds
issued under the Prior Indenture prior to the date hereof are no
longer Outstanding (as defined under the Prior
Indenture).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bonds
of the First Series were originally issued in an aggregate
principal amount of $600,000,000, of which $600,000,000 principal
amount is Outstanding as of the date hereof.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bonds
of the Second Series were originally issued in an aggregate
principal amount of $500,000,000, of which $500,000,000 principal
amount is Outstanding as of the date hereof.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bonds
of the Third Series were originally issued in an aggregate
principal amount of $1,000,000,000, of which $1,000,000,000
principal amount is Outstanding as of the date hereof.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bonds
of the Fourth Series were originally issued in an aggregate
principal amount of $3,000,000,000, of which $3,000,000,000
principal amount is Outstanding as of the date hereof.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bonds
of the Fifth Series were originally issued in an aggregate
principal amount of $1,600,000,000, of which $200,000,000 principal
amount is Outstanding as of the date hereof.</font></p>

<p><a name="_Toc101868298"><b><font size="3" face=
"Times New Roman">SECTION
4.02.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Bonds of the Initial Series;
Terms of Bonds of the Initial
Series</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
Section 201 of the First Supplemental Mortgage, the Company
designated the Bonds of the First Series as the &ldquo;3.60% First
Mortgage Bonds due 2009&rdquo; (the &ldquo;3.60% First Mortgage
Bonds&rdquo;).&nbsp; The Release Date having occurred on the date
hereof and pursuant to Section 202 of the First Supplemental
Mortgage, the 3.60% First Mortgage Bonds are hereby redesignated as
the &ldquo;3.60% Senior Notes due 2009&rdquo; (the &ldquo;3.60%
Senior Notes&rdquo;).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
Section 201 of the First Supplemental Mortgage, the Company
designated the Bonds of the Second Series as the &ldquo;4.20% First
Mortgage Bonds due 2011&rdquo; (the &ldquo;4.20% First Mortgage
Bonds&rdquo;).&nbsp; The Release Date having occurred on the date
hereof and pursuant to Section 202 of the First Supplemental
Mortgage, the 4.20% First Mortgage Bonds are hereby redesignated as
the &ldquo;4.20% Senior Notes due 2011&rdquo; (the &ldquo;4.20%
Senior Notes&rdquo;).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
Section 201 of the First Supplemental Mortgage, the Company
designated the Bonds of the Third Series as the &ldquo;4.80% First
Mortgage Bonds due 2014&rdquo; (the &ldquo;4.80% First Mortgage
Bonds&rdquo;).&nbsp; The Release Date having occurred on the date
hereof and pursuant to Section 202 of the First Supplemental
Mortgage, the 4.80% First Mortgage Bonds are hereby redesignated as
the &ldquo;4.80% Senior Notes due 2014&rdquo; (the &ldquo;4.80%
Senior Notes&rdquo;).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
Section 201 of the First Supplemental Mortgage, the Company
designated the Bonds of the Fourth Series as the &ldquo;6.05% First
Mortgage Bonds due 2034&rdquo; (the &ldquo;6.05% First Mortgage
Bonds&rdquo;).&nbsp; The Release Date having occurred on the date
hereof and pursuant to Section 202 of the First Supplemental
Mortgage, the 6.05% First Mortgage Bonds are hereby redesignated as
the &ldquo;6.05% Senior Notes due 2034&rdquo; (the &ldquo;6.05%
Senior Notes&rdquo;).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
Section 201 of the First Supplemental Mortgage, the Company
designated the Bonds of the Fifth Series as the &ldquo;Floating
Rate First Mortgage Bonds due 2006&rdquo; (the &ldquo;Floating Rate
First Mortgage Bonds&rdquo;).&nbsp; The Release Date having
occurred on the date hereof and pursuant to Section 202 of the
First Supplemental Mortgage, the Floating Rate First Mortgage Bonds
are hereby redesignated as the &ldquo;Floating Rate Senior Notes
due 2006&rdquo; (the &ldquo;Floating Rate Senior
Notes&rdquo;).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
accordance with Section 202 of the First Supplemental Mortgage,
each holder of a 3.60% First Mortgage Bond, 4.20% First Mortgage
Bond, a 4.80% Mortgage Bond, 6.05% Mortgage Bond and Floating Rate
First Mortgage Bond that is a Global Bond is to surrender such Bond
to the Trustee as soon as reasonably practicable after the Release
Date and the Trustee shall simultaneously exchange the surrendered
Bond for a 3.60% Senior Note, a 4.20% Senior Note, a 4.80% Senior
Note, a 6.05% Senior Note and a Floating Rate Senior Note,
respectively.&nbsp; The form of the Fixed Rate Senior Notes being
exchanged pursuant hereto is attached hereto as <u>Exhibit A</u>
and the form of the Floating Rate Senior Notes being exchanged
pursuant hereto is attached hereto as <u>Exhibit B</u>.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
established in Section 201 of the First Supplemental Mortgage and
as continued hereunder, any series of the Bonds of the Initial
Series may be reopened, from time to time, for issuances of
additional Bonds of such series, and any additional Bonds issued
and comprising Bonds of any series of the Bonds of the Initial
Series shall have identical terms as such series of Bonds of the
Initial Series, except that the issue price, issue date and, in
some cases, the first Interest Payment Date may differ.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
established in Section 204 of the First Supplemental Mortgage and
as continued hereunder, (i) the 3.60% Senior Notes bear interest at
the rate of 3.60% per annum and have a Stated Maturity of March 1,
2009; (ii) the 4.20% Senior Notes bear interest at the rate of
4.20% per annum and have a Stated Maturity of March 1, 2011, (iii)
the 4.80% Senior Notes bear interest at the rate of 4.80% per annum
and have a Stated Maturity of March 1, 2014; (iv) the 6.05% Senior
Notes bear interest at the rate of 6.05% per annum and have a
Stated Maturity of March 1, 2034; and (v) the rate of interest on
the Floating Rate Senior Notes is calculated as set forth in the
form of such Bond attached hereto as <u>Exhibit B</u> and the
Stated Maturity of the Floating Rate Senior Notes is April 3,
2006.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
established in Section 205 of the First Supplemental Mortgage and
as continued hereunder, the Bonds of the Initial Series were issued
in the form of one or more permanent Global Securities as provided
in Section 3.13 of the Prior Indenture and deposited with the
Trustee, as custodian for the Depositary, duly executed by the
Company and authenticated by the Trustee.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
established in Section 205 of the First Supplemental Mortgage and
as continued hereunder, the Company appointed DTC to act as the
Depositary with respect to all Bonds of the Initial Series, and the
Bonds of the Initial Series were initially registered in the name
of Cede &amp; Co., as the nominee of DTC.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
accordance with Section 205 of the First Supplemental Mortgage, the
Trustee executed and delivered a Letter of Representations to DTC
and, in connection with any successor nominee for DTC or any
successor Depositary, the Trustee will enter into comparable
arrangements, and shall have the same rights with respect to its
actions thereunder as it has with respect to its actions under the
Indenture.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
established in Section 205 of the First Supplemental Mortgage and
as continued hereunder, none of the Company, the Trustee, any
Paying Agent or any Bond Registrar will have any responsibility or
liability for any aspect of Depositary records relating to, or
payments made on account of, beneficial ownership interests in a
Global Bond or for maintaining, supervising or reviewing any
Depositary records relating to such beneficial ownership interests,
or for transfers of beneficial interests in the Bonds or any
transactions between the Depositary and beneficial
owners.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
established in Section 206 of the First Supplemental Mortgage and
as continued hereunder, no sinking fund is provided for any of the
Bonds of the Initial Series.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
established in Section 208 of the First Supplemental Mortgage and
as continued hereunder, the Trustee is appointed as initial Paying
Agent and initial Bond Registrar for the Bonds of the Initial
Series.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
established in Section 209 of the First Supplemental Mortgage, BNY
Western Trust Company was appointed as the initial Calculation
Agent for the Floating Rate Senior Notes and The Bank of New York
Trust Company, N.A., as successor in interest to BNY Western Trust
Company is continued as the initial Calculation Agent for the
Floating Rate Senior Notes.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
terms of the Bonds of the Initial Series are as expressly set forth
Section 4.03 below, <u>Exhibit A</u> (with respect to the Fixed
Rate Senior Notes) and <u>Exhibit B</u> (with respect to the
Floating Rate Senior Notes).</font></p>

<p><a name="_Toc101868299"><b><font size="3" face=
"Times New Roman">SECTION
4.03.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Redemption of Bonds of the
Initial Series</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>
Optional Redemption of 3.60% Senior Notes</u>.&nbsp; As established
in Section 302(a) of the First Supplemental Mortgage and as
continued hereunder, subject to the terms and conditions of this
Indenture, the 3.60% Senior Notes are redeemable at the option of
the Company, in whole or in part at any time after the Initial
Issuance Date and prior to Maturity, at a Redemption Price equal to
the greater of:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100% of the principal amount of
the 3.60% Senior Notes to be redeemed; or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as determined by the Independent
Investment Banker, the sum of the present values of the Remaining
Scheduled Payments on the 3.60% Senior Notes to be so redeemed (not
including any portion of such payments of interest accrued to the
Redemption Date) discounted to the Redemption Date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate, plus 0.15%,</font></p>

<p><font size="3" face="Times New Roman">plus, in either of the
above cases, accrued and unpaid interest on the principal amount of
the 3.60% Senior Notes being redeemed to but not including the
Redemption Date.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>
Optional Redemption of 4.20% Senior Notes</u>.&nbsp; As established
in Section 302(b) of the First Supplemental Mortgage and as
continued hereunder, subject to the terms and conditions of this
Indenture, the 4.20% Senior Notes are redeemable at the option of
the Company, in whole or in part at any time after the Initial
Issuance Date and prior to Maturity, at a Redemption Price equal to
the greater of:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100%
of the principal amount of the 4.20% Senior Notes to be redeemed;
or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as
determined by the Independent Investment Banker, the sum of the
present values of the Remaining Scheduled Payments on the 4.20%
Senior Notes to be so redeemed (not including any portion of such
payments of interest accrued to the Redemption Date) discounted to
the Redemption Date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate,
plus 0.15%,</font></p>

<p><font size="3" face="Times New Roman">plus, in either of the
above cases, accrued and unpaid interest on the principal amount of
the 4.20% Senior Notes being redeemed to but not including the
Redemption Date.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>
Optional Redemption of 4.80% Senior Notes</u>.&nbsp; As established
in Section 302(c) of the First Supplemental Mortgage and as
continued hereunder, subject to the terms and conditions of the
Indenture, the 4.80% Senior Notes are redeemable at the option of
the Company, in whole or in part at any time after the Initial
Issuance Date and prior to Maturity, at a Redemption Price equal to
the greater of:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100%
of the principal amount of the 4.80% Senior Notes to be redeemed;
or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as
determined by the Independent Investment Banker, the sum of the
present values of the Remaining Scheduled Payments on the 4.80%
Senior Notes to be so redeemed (not including any portion of such
payments of interest accrued to the Redemption Date) discounted to
the Redemption Date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate,
plus 0.20%,</font></p>

<p><font size="3" face="Times New Roman">plus, in either of the
above cases, accrued and unpaid interest on the principal amount of
the 4.80% Senior Notes being redeemed to but not including the
Redemption Date.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>
Optional Redemption of 6.05% Senior Notes</u>.&nbsp; As established
in Section 302(d) of the First Supplemental Mortgage and as
continued hereunder, subject to the terms and conditions of the
Indenture, the 6.05% Senior Notes are redeemable at the option of
the Company, in whole or in part at any time after the Initial
Issuance Date and prior to Maturity, at a Redemption Price equal to
the greater of:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100%
of the principal amount of the 6.05% Senior Notes to be redeemed;
or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as
determined by the Independent Investment Banker, the sum of the
present values of the Remaining Scheduled Payments on the 6.05%
Senior Notes to be so redeemed (not including any portion of such
payments of interest accrued to the Redemption Date) discounted to
the Redemption Date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate,
plus 0.25%,</font></p>

<p><font size="3" face="Times New Roman">plus, in either of the
above cases, accrued and unpaid interest on the principal amount of
the 6.05% Senior Notes being redeemed to but not including the
Redemption Date.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>
Optional Redemption of Floating Rate Senior Notes</u>.&nbsp; As
established in Section 302(e) of the First Supplemental Mortgage
and as continued hereunder, subject to the terms and conditions of
the Indenture, the Floating Rate Senior Notes were redeemable at
the option of the Company, in whole or in part, on October 3, 2004
and are redeemable on any Interest Payment Date thereafter and
prior to Maturity, at a Redemption Price equal to 100% of the
principal amount of the Floating Rate Senior Notes being redeemed,
plus accrued and unpaid interest thereon to but not including the
Redemption Date.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
established in Section 302(f) of the First Supplemental Mortgage
and as continued hereunder, redemption of each series of Bonds of
the Initial Series pursuant to this Section 4.03 shall be made in
accordance with Article VI of this Indenture.</font></p>

<p><a name="_Toc101868300"><b><font size="3" face=
"Times New Roman">SECTION
4.04.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Bonds of the Eleventh Series,
Terms of Bonds of the Eleventh
Series</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
Section 701 of the Second Supplemental Mortgage, the Company
established an eleventh series of Bonds designated as the
&ldquo;Bond of the Eleventh Series&rdquo; and such Bond was
originally issued in certificated form.&nbsp; The Release Date
having occurred on the date hereof and pursuant to Section 702 of
the Second Supplemental Mortgage, the Bonds of the Eleventh Series
are hereby redesignated as the &ldquo;Senior Note due December 1,
2016&rdquo; (the &ldquo;Senior Note due 2016&rdquo;).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
accordance with Section 702 of the Second Supplemental Mortgage,
the Holder of the Bond of the Eleventh Series shall surrender such
Bond to the Trustee and the Trustee shall simultaneously exchange
the surrendered Bond for a Senior Note due 2016.&nbsp; The form of
the Senior Note due 2016 being exchanged pursuant hereto is
attached hereto as <u>Exhibit C</u>.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
established in Section 703 of the Second Supplemental Mortgage and
as continued hereunder, (i) the initial face amount of the Senior
Note due 2016 is $200,000,000, which face amount represents the
maximum principal amount of the Senior Note due 2016, (ii) the
amount of principal payable on the Senior Note due 2016, and the
date or dates on which such principal is payable, are as set forth
in said Senior Note due 2016, (iii) for all purposes of this
Indenture, the principal amount of the Senior Note due 2016
Outstanding as of any date of calculation shall be equal to the
Obligations (as defined in the Senior Note due 2016) outstanding
under the MBIA Reimbursement and Indemnity Agreement as of such
date, but in no event shall the principal amount of such Senior
Note due 2016 as of any date of calculation be greater than the
then current face amount of such Senior Note due 2016, and (iv) for
all purposes of this Indenture, principal of the Senior Note due
2016 shall be payable without the presentment or surrender
thereof.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
established in Section 704 of the Second Supplemental Mortgage and
as continued hereunder, (i) the Senior Note due 2016 bears interest
at the rate or rates, and interest with respect thereto is payable
on the Interest Payment Dates set forth in said Senior Note due
2016; (ii) the Senior Note due 2016 has a Stated Maturity of
December 1, 2016; and (iii) interest on the Senior Note due 2016
shall accrue from the same dates that interest, if any, accrues on
outstanding Obligations pursuant to the MBIA Reimbursement and
Indemnity Agreement until such interest is paid.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
established in Section 705 of the Second Supplemental Mortgage and
as continued hereunder, the Senior Note due 2016 is not subject to
redemption prior to its Stated Maturity, and no sinking fund is
provided for the Senior Note due 2016.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
established in Section 706 of the Second Supplemental Mortgage and
as continued hereunder, the Trustee is appointed as initial Paying
Agent and initial Bond Registrar for the Senior Note due
2016.&nbsp; The Place of Payment of the Senior Note due 2016 shall
be the Corporate Trust Office of the Trustee; provided, however,
that the Company reserves the right to change, by one or more
Officer&rsquo;s Certificates any such place or the Bond Registrar;
provided, further, that the Company reserves the right to
designate, by one or more Officer&rsquo;s Certificates, one or more
of its offices as any such place or itself as the Bond
Registrar.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
established in Section 707 of the Second Supplemental Mortgage and
as continued hereunder, (i) the Senior Note due 2016 may not be
exchanged for any other Bond, except as provided in Section 3.06 of
this Indenture, and may not be transferred except to effect an
assignment thereof to a successor or an assign of MBIA; and (ii)
the Company may take such actions as it shall deem necessary,
desirable or appropriate to effect compliance with such
restrictions on transfer, including the issuance of stop-transfer
instructions to the Trustee or any other transfer agent.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
terms of the Senior Note due 2016 are as expressly set forth in
<u>Exhibit C</u> hereto.</font></p>

<p align="center"><a name="_Toc101868301"><font size="3" face=
"Times New Roman"><br />
<b>ARTICLE V</b><br />
<br />
<b>ISSUANCE OF BONDS</b></font></a></p>

<p><a name="_Toc101868302"><b><font size="3" face=
"Times New Roman">SECTION
5.01.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>General</u></font></b></a><b><u>
..</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Trustee shall authenticate and deliver Bonds of a series, for
original issue, at one time or from time to time in accordance with
the Company Order referred to below, upon receipt by the Trustee
of:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
instrument or instruments establishing the form or forms and terms
of such series, as provided in Sections 2.01 and 3.01;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
Company Order requesting the authentication and delivery of such
Bonds and, to the extent that the terms of such Bonds shall not
have been established in an indenture supplemental hereto or in a
Board Resolution, or in an Officer&rsquo;s Certificate pursuant to
a supplemental indenture or Board Resolution, all as contemplated
by Section 3.01, either (i) establishing such terms or (ii) in the
case of Bonds of a series subject to a Periodic Offering,
specifying procedures by which such terms are to be established
(which procedures may provide for authentication and delivery
pursuant to oral or electronic instructions from the Company or any
agent or agents thereof, which oral instructions are to be promptly
confirmed electronically or in writing), in either case in
accordance with the instrument or instruments delivered pursuant to
clause (a) above;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Bonds of such series, executed on behalf of the Company by an
officer specified in Section 3.03;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;an
Opinion of Counsel to the effect that:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
form or forms of such Bonds have been duly authorized by the
Company and have been established in conformity with the provisions
of this Indenture;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
terms of such Bonds have been duly authorized by the Company and
have been established in conformity with the provisions of this
Indenture; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;when
such Bonds shall have been authenticated and delivered by the
Trustee and issued and delivered by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel,
such Bonds will constitute valid obligations of the Company,
entitled to the benefits of this Indenture, equally and ratably
with all other Outstanding Bonds without any priority of any one
Bond over any other Bond;</font></p>

<p><font size="3" face="Times New Roman">provided, however, that,
with respect to Bonds of a series subject to a Periodic Offering,
the Trustee shall be entitled to receive such Opinion of Counsel
only once at or prior to the time of the first authentication and
delivery of such Bonds (provided that such Opinion of Counsel
addresses the authentication and delivery of all such Bonds) and
that, in lieu of the opinions described in clauses (ii) and (iii)
above, counsel may opine that:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;when the terms of such Bonds shall
have been established pursuant to a Company Order or Orders or
pursuant to such procedures as may be specified from time to time
by a Company Order or Orders, all as contemplated by and in
accordance with the instrument or instruments delivered pursuant to
clause (a) above, such terms will have been duly authorized by the
Company and will have been established in conformity with the
provisions of this Indenture; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(y)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;when such Bonds shall have been
authenticated and delivered by the Trustee in accordance with this
Indenture and the Company Order or Orders or the specified
procedures referred to in paragraph (x) above and issued and
delivered by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, such Bonds will
constitute valid obligations of the Company, entitled to the
benefits of this Indenture, equally and ratably with all other
Outstanding Bonds without any priority of any one Bond over any
other Bond;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;an
Officer&rsquo;s Certificate to the effect that, to the knowledge of
the signer, no Event of Default has occurred and is continuing;
provided, however, that with respect to Bonds of a series subject
to a Periodic Offering, either (i) such an Officer&rsquo;s
Certificate shall be delivered at the time of the authentication
and delivery of each Bond of such series or (ii) the
Officer&rsquo;s Certificate delivered at or prior to the time of
the first authentication and delivery of the Bonds of such series
shall state that the statements therein shall be deemed to be made
at the time of each, or each subsequent, authentication and
delivery of Bonds of such series.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
respect to Bonds of a series subject to a Periodic Offering, the
Trustee may conclusively rely, as to the authorization by the
Company of any of such Bonds, the forms and terms thereof, the
validity thereof and the compliance of the authentication and
delivery thereof with the terms and conditions of this Indenture,
upon the Opinion or Opinions of Counsel and the certificates and
other documents delivered pursuant to this Article V at or prior to
the time of the first authentication and delivery of Bonds of such
series until (i) such time as the Trustee has received written
notice that any of such opinions, certificates or other documents
have been superseded or revoked or (ii) such opinions, certificates
or other documents expire by their terms.&nbsp; In connection with
the authentication and delivery of Bonds of a series subject to a
Periodic Offering, the Trustee shall be entitled to assume that the
Company&rsquo;s instructions to authenticate and deliver such Bonds
do not violate any applicable law or any applicable rule,
regulation or order of any Governmental Authority having
jurisdiction over the Company.</font></p>

<p align="center"><a name="_Toc101868303"><font size="3" face=
"Times New Roman"><br />
<b>ARTICLE VI</b><br />
<br />
<b>REDEMPTION OF BONDS</b></font></a></p>

<p><a name="_Toc101868304"><b><font size="3" face=
"Times New Roman">SECTION
6.01.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Applicability of
Article</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bonds
of any series, or any Tranche thereof, which are redeemable before
their Stated Maturity shall be redeemable in accordance with their
terms and (except as otherwise specified as contemplated by Section
3.01 for Bonds of such series or Tranche) in accordance with this
Article.</font></p>

<p><a name="_Toc101868305"><b><font size="3" face=
"Times New Roman">SECTION
6.02.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Election to Redeem; Notice to
Trustee</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
election of the Company to redeem any Bonds shall be evidenced by a
Board Resolution or an Officer&rsquo;s Certificate.&nbsp; The
Company shall, at least forty-five (45) days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee in writing of
such Redemption Date and of the principal amount of such Bonds to
be redeemed.&nbsp; In the case of any redemption of Bonds (a) prior
to the expiration of any restriction on such redemption provided in
the terms of such Bonds or elsewhere in this Indenture or (b)
pursuant to an election of the Company which is subject to a
condition specified in the terms of such Bonds, the Company shall
furnish the Trustee with an Officer&rsquo;s Certificate evidencing
compliance with such restriction or condition.</font></p>

<p><a name="_Toc101868306"><b><font size="3" face=
"Times New Roman">SECTION
6.03.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Selection of Bonds to Be
Redeemed</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
less than all the Bonds of any series, or any Tranche thereof, are
to be redeemed, the particular Bonds to be redeemed shall be
selected by the Bond Registrar from the Outstanding Bonds of such
series or Tranche not previously called for redemption, by such
method as shall be provided for any particular series or Tranche,
or, in the absence of any such provision, by such method of random
selection as the Bond Registrar shall deem fair and appropriate and
which may, in any case, provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Bonds of
such series or Tranche or any integral multiple thereof) of the
principal amount of Bonds of such series or Tranche having a
denomination larger than the minimum authorized denomination for
Bonds of such series or Tranche; provided, however, that if, as
indicated in an Officer&rsquo;s Certificate, the Company shall have
offered to purchase all or any principal amount of the Bonds then
Outstanding of any series, or any Tranche thereof, and less than
all of such Bonds as to which such offer was made shall have been
tendered to the Company for such purchase, the Bond Registrar, if
so directed by Company Order, shall select for redemption all or
any principal amount of such Bonds which have not been so
tendered.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bond Registrar shall promptly notify the Company and the Trustee in
writing of the Bonds selected for redemption and, in the case of
any Bonds selected to be redeemed in part, the principal amount
thereof to be redeemed.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Bonds shall
relate, in the case of any Bonds redeemed or to be redeemed only in
part, to the portion of the principal amount of such Bonds which
has been or is to be redeemed.</font></p>

<p><a name="_Toc101868307"><b><font size="3" face=
"Times New Roman">SECTION
6.04.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Notice of
Redemption</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise specified with respect to any series of Bonds, or any
Tranche thereof, in accordance with Section 3.01, notice of
redemption shall be given in the manner provided in Section 1.06 to
the Holders of the Bonds to be redeemed not less than thirty (30)
nor more than sixty (60) days prior to the Redemption
Date.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
notices of redemption shall state:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Redemption Date,</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Redemption Price,</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if
less than all the Bonds of any series or Tranche are to be
redeemed, the identification of the particular Bonds to be redeemed
and the portion of the principal amount of any Bond to be redeemed
in part,</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;that
on the Redemption Date, the Redemption Price, together with accrued
interest, if any, to the Redemption Date, will become due and
payable upon each such Bond to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date;
provided, that if a conditional notice shall be given, other
appropriate language shall be inserted indicating the conditional
nature of the redemption,</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
place or places where such Bonds are to be surrendered for payment
of the Redemption Price and accrued interest, if any, unless it
shall have been specified as contemplated by Section 3.01 with
respect to such Bonds that such surrender shall not be
required,</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;that
the redemption is for a sinking or other fund, if such is the case,
and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;such
other matters as the Company shall deem desirable or
appropriate.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise specified with respect to any series of Bonds, or any
Tranche thereof, in accordance with Section 3.01, with respect to
any redemption of Bonds at the election of the Company or any
redemption which is contingent on the occurrence or nonoccurrence
of an event or condition which cannot be ascertained prior to the
time a redemption notice is required to be given hereunder, such
notice may state that such redemption shall be conditional upon
receipt by the Trustee or the Paying Agent or Agents for such
Bonds, on or prior to the date fixed for such redemption, of money
sufficient to pay the Redemption Price of such Bonds and accrued
interest, if any, thereon to the Redemption Date (or direction from
the Company to apply such money for the payment of such Bonds, if
such money shall have been deposited with the Trustee or Paying
Agent or Agents upon the condition that the Trustee or Paying Agent
or Agents will apply such money only at the direction of the
Company) and that if such money shall not have been so received (or
if such money shall have been received but the Trustee or the
Paying Agent or Agents have been directed by the Company not to
apply such money to redeem such Bonds) such notice shall be of no
force or effect and the Company shall not be required to redeem
such Bonds; provided, however, that conditional notice shall not be
given if upon the giving of notice, such Bonds shall be deemed to
have been paid in accordance with Section 8.01.&nbsp; In the event
that such notice of redemption contains such a condition and such
money is not so received, or the Trustee or Paying Agent or Agents
have been directed by the Company not to apply such money to the
redemption of such Bonds, the redemption shall not be made, and
within a reasonable time thereafter notice shall be given, in the
manner in which the notice of redemption was given, that such money
was not so received or that the Trustee or Paying Agent or Agents
have been directed by the Company not to redeem such Bonds and such
redemption was not required to be made, and the Trustee or Paying
Agent or Agents for the Bonds otherwise to have been redeemed shall
promptly return to the Holders thereof any of such Bonds which had
been surrendered for payment upon such redemption.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notice
of redemption of Bonds to be redeemed at the election of the
Company, and any notice of non-satisfaction of a condition for
redemption as aforesaid, shall be given by the Company or, at the
Company&rsquo;s request, by the Bond Registrar in the name and at
the expense of the Company.&nbsp; Notice of mandatory redemption of
Bonds shall be given by the Bond Registrar in the name and at the
expense of the Company.</font></p>

<p><a name="_Toc101868308"><b><font size="3" face=
"Times New Roman">SECTION
6.05.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Bonds Payable on
Redemption Date</u></font></b></a><u><b>.</b></u></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notice
of redemption having been given as aforesaid, and the conditions,
if any, set forth in such notice having been satisfied, the Bonds
or portions thereof so to be redeemed shall, on the Redemption
Date, become due and payable at the Redemption Price therein
specified, and from and after such date (unless, in the case of an
unconditional notice of redemption, the Company shall default in
the payment of the Redemption Price and accrued interest, if any)
such Bonds or portions thereof, if interest-bearing, shall cease to
bear interest.&nbsp; Upon surrender of any such Bond for redemption
in accordance with such notice, such Bond or portion thereof shall
be paid by the Company at the Redemption Price, together with
accrued interest, if any, to the Redemption Date; provided,
however, that no such surrender shall be a condition to such
payment if so specified as contemplated by Section 3.01 with
respect to such Bond; and provided, further, that, except as
otherwise specified as contemplated by Section 3.01 with respect to
such Bond, any installment of interest on any Bond the Stated
Maturity of which installment is on or prior to the Redemption Date
shall be payable to the Holder of such Bond, or one or more
Predecessor Bonds, registered as such at the close of business on
the related Regular Record Date according to the terms of such Bond
and subject to the provisions of Section 3.07.</font></p>

<p><a name="_Toc101868309"><b><font size="3" face=
"Times New Roman">SECTION
6.06.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Bonds Redeemed in
Part</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face="Times New Roman">Upon the surrender of any
Bond which is to be redeemed only in part at a Place of Payment
therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), the
Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Bond, without service charge, a new
Bond or Bonds of the same series and Tranche, of any authorized
denomination requested by such Holder and of like tenor and in
aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Bond so
surrendered.</font></p>

<p align="center"><a name="_Toc101868310"><font size="3" face=
"Times New Roman"><br />
<b>ARTICLE VII</b><br />
<br />
<b>COVENANTS</b></font></a></p>

<p><a name="_Toc101868311"><b><font size="3" face=
"Times New Roman">SECTION
7.01.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Payment of
Bonds</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall pay the principal of and premium, if any, and
interest, if any, on the Bonds of each series in accordance with
the terms of such Bonds and this Indenture.</font></p>

<p><a name="_Toc101868312"><b><font size="3" face=
"Times New Roman">SECTION
7.02.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Maintenance of Office or
Agency</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall maintain in each Place of Payment for the Bonds of
each series, or any Tranche thereof, an office or agency where
payment of such Bonds shall be made, and where the registration of
transfer or exchange of such Bonds may be effected and where
notices and demands to or upon the Company in respect of such Bonds
and this Indenture may be served.&nbsp; The Company shall give
prompt written notice to the Trustee of the location, and any
change in the location, of each such office or agency.&nbsp; If at
any time the Company shall fail to maintain any such required
office or agency in respect of Bonds of any series, or any Tranche
thereof, or shall fail to furnish the Trustee with the address
thereof, payment of such Bonds shall be made, registration of
transfer or exchange thereof may be effected and notices and
demands in respect thereof may be served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee
as its agent for all such purposes in any such event.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company may also from time to time designate one or more other
offices or agencies with respect to the Bonds of one or more
series, or any Tranche thereof, for any or all of the foregoing
purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an
office or agency for such purposes.&nbsp; The Company shall give
prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other
office or agency.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Anything
herein to the contrary notwithstanding, any office or agency
required by this Section may be maintained at an office of the
Company, in which event the Company shall perform all functions to
be performed at such office or agency.</font></p>

<p><a name="_Toc101868313"><b><font size="3" face=
"Times New Roman">SECTION
7.03&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Money for Bond Payments to Be
Held in Trust</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Company shall at any time act as its own Paying Agent with
respect to the Bonds of any series, or any Tranche thereof, it
shall, on or before each due date of the principal of and premium,
if any, and interest, if any, on any of such Bonds, segregate and
hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal and premium or interest so becoming
due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided.&nbsp; The Company shall promptly
notify the Trustee of any failure by the Company (or any other
obligor on such Bonds) to make any payment of principal of or
premium, if any, or interest, if any, on such Bonds.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Whenever
the Company shall have one or more Paying Agents for the Bonds of
any series, or any Tranche thereof, it shall, on or before each due
date of the principal of and premium, if any, and interest, if any,
on such Bonds, deposit with such Paying Agents sums sufficient
(without duplication) to pay the principal and premium or interest
so becoming due, such sums to be held in trust for the benefit of
the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company shall
promptly notify the Trustee of any failure by it so to
act.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
their appointment as Paying Agent, the Company shall cause each
Paying Agent for the Bonds of any series, or any Tranche thereof,
other than the Company or the Trustee, to execute and deliver to
the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that
such Paying Agent shall:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;hold
all sums held by it for the payment of the principal of and
premium, if any, or interest, if any, on such Bonds in trust for
the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein
provided;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;give
the Trustee notice of any failure by the Company (or any other
obligor upon such Bonds) to make any payment of principal of or
premium, if any, or interest, if any, on such Bonds; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;at
any time during the continuance of any such failure, upon the
written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent and furnish to the
Trustee such information as it possesses regarding the names and
addresses of the Persons entitled to such sums.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company may at any time pay, or by Company Order direct any Paying
Agent to pay, to the Trustee all sums held in trust by the Company
or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company
or such Paying Agent and, if so stated in a Company Order delivered
to the Trustee, in accordance with the provisions of Article VIII;
and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with
respect to such money.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise prescribed by applicable law, any money deposited with
the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of and premium, if any, or
interest, if any, on any Bond and remaining unclaimed for two years
after such principal and premium, if any, or interest, if any, has
become due and payable shall be paid to the Company on Company
Request, or, if then held by the Company, shall be discharged from
such trust without further action by the Company, Trustee or any
Paying Agent; and, upon such payment or discharge, the Holder of
such Bond shall, as an unsecured general creditor and not as the
Holder of an Outstanding Bond, look only to the Company for payment
of the amount so due and payable and remaining unpaid, and all
liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Company as trustee thereof,
shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such payment to the
Company, shall, upon receipt of a Company Request and at the
expense of the Company, cause to be mailed, on one occasion only,
notice to such Holder that such money remains unclaimed and that,
after a date specified therein, which shall not be less than thirty
(30) days from the date of such mailing, any unclaimed balance of
such money then remaining will be paid to the Company.</font></p>

<p><a name="_Toc101868314"><b><font size="3" face=
"Times New Roman">SECTION
7.04.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Corporate
Existence</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to the rights of the Company under Article XII, the Company shall
do or cause to be done all things necessary to preserve and keep
its corporate existence in full force and effect.</font></p>

<p><a name="_Toc101868315"><b><font size="3" face=
"Times New Roman">SECTION
7.05.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Waiver of Certain
Covenants</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company may omit in any particular instance to comply with any
term, provision or condition set forth in</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
covenant or restriction specified with respect to the Bonds of any
one or more series, or any one or more Tranches thereof, as
contemplated by Section 3.01 if before the time for such compliance
the Holders of not less than a majority in aggregate principal
amount of the Outstanding Bonds of all series and Tranches with
respect to which compliance with such covenant or restriction is to
be omitted, considered as one class, shall, by Act of such Holders,
either waive such compliance in such instance or generally waive
compliance with such term, provision or condition; provided,
however, that no such waiver shall be effective as to any of the
matters contemplated in clause (a), (b) or (c) in Section 13.02
without the consent of the Holders specified in such Section;
and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section
7.04 or 7.07 or Article XII if, before the time for such
compliance, the Holders of not less than a majority in principal
amount of Bonds Outstanding under this Indenture shall, by Act of
such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or
condition;</font></p>

<p><font size="3" face="Times New Roman">but, in either case, no
such waiver shall extend to or affect such term, provision or
condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and
the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.</font></p>

<p><a name="_Toc101868316"><b><font size="3" face=
"Times New Roman">SECTION
7.06.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Annual Officer&rsquo;s
Certificate as to Compliance</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not
later than June&nbsp;1 in each year, commencing June&nbsp;1, 2005,
the Company shall deliver to the Trustee a certificate (which need
not comply with Section 1.02) executed by the principal executive
officer, the principal financial officer or the principal
accounting officer of the Company, as to such officer&rsquo;s
knowledge of the Company&rsquo;s compliance with all conditions and
covenants under this Indenture, such compliance to be determined
without regard to any period of grace or requirement of notice
under this Indenture.</font></p>

<p><a name="_Toc101868317"><b><font size="3" face=
"Times New Roman">SECTION
7.07.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Limitation on
Liens</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company will not, nor will it permit any Significant Subsidiary to,
(1) issue, incur, assume or permit to exist any Debt, if such Debt
is secured by a Lien on any Principal Property (whether such
Principal Property was owned at March 11, 2004 or thereafter
acquired), unless the Company provides that Outstanding Bonds will
be equally and ratably secured with such secured Debt or (2) incur
or permit to exist any Attributable Debt in respect of Principal
Property; provided, however, that the foregoing restriction shall
not apply to:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
the extent the Company or any Significant Subsidiary consolidates
with, or merges with or into, another entity, Liens on the property
of such entity securing Debt in existence on the date of such
consolidation or merger, provided that such Debt and Liens were not
created or incurred in anticipation of such consolidation or merger
and that such Liens do not extend to or cover any Principal
Property;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens
on property acquired after March 11, 2004 and existing at the time
of such acquisition, as long as the Lien was not created or
incurred in anticipation thereof and does not extend to or cover
any other Principal Property;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens
of any kind, including purchase money Liens, conditional sales
agreements or title retention agreements and similar agreements,
upon any property acquired, constructed, developed or improved by
the Company or any Significant Subsidiary (whether alone or in
association with others) which do not exceed the cost or value of
the property acquired, constructed, developed or improved and which
are created prior to, at the time of, or within twelve (12) months
after such acquisition (or in the case of property constructed,
developed or improved, within twelve (12) months after the
completion of such construction, development or improvement and
commencement of full commercial operation of such property,
whichever is later) to secure or provide for the payment of any
part of the purchase price or cost thereof; provided that the Liens
shall not extend to any Principal Property other than the property
so acquired, constructed, developed or improved;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens
in favor of the United States, any state or any foreign country or
any department, agency or instrumentality or political subdivision
of any such jurisdiction to secure payments pursuant to any
contract or statute or to secure any indebtedness incurred for the
purpose of financing all or any part of the purchase price or cost
of constructing or improving the property subject to such Lien,
including Liens related to governmental obligations the interest on
which is tax-exempt under Section 103 of the Internal Revenue Code
or any successor section of the Internal Revenue Code;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens
in favor of the Company, one or more Significant Subsidiaries of
the Company, one or more wholly-owned Subsidiaries of the Company
or any of the foregoing combination; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;replacements,
extensions or renewals (or successive replacements, extensions or
renewals), in whole or in part, of any Lien, or of any agreement,
referred to above in clauses (i) through (v) inclusive, or
replacements, extensions or renewals of the Debt secured thereby
(to the extent that the amount of Debt secured by any such Lien is
not increased from the amount originally so secured, plus any
premium, interest, fee or expenses payable in connection with any
replacements, refundings, refinancings, remarketings, extensions or
renewals); provided that such replacement, extension or renewal is
limited to all or a part of the same property (plus improvements
thereon or additions or accessions thereto) that secured the Lien
replaced, extended or renewed.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
the restriction in subsection (a) of this Section 7.07, the Company
or any Significant Subsidiary may (1) issue, incur or assume Debt
secured by a Lien not described in clauses (i) through (vi) of
subsection (a) above on any Principal Property owned at March 11,
2004 or thereafter acquired without providing that the Outstanding
Bonds be equally and ratably secured with such Debt and (2) issue
or permit to exist Attributable Debt in respect of Principal
Property, in either case so long as the aggregate amount of such
secured Debt and Attributable Debt, together with the aggregate
amount of all other Debt secured by Liens on Principal Property not
described in clauses (i) through (vi) of subsection (a) above then
outstanding and all other Attributable Debt, does not exceed 10% of
the Net Tangible Assets of the Company, as determined by the
Company as of a month end not more than 90 days prior to the
closing or consummation of the proposed transaction.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of determining compliance with this Section 7.07, in the
event that any Lien at any time meets the criteria of more than one
of the categories described in clauses (i) through (vi) above of
Section 7.07(a), or is entitled to be created pursuant to Section
7.07(b), the Company will be permitted to classify (and later
reclassify) in whole or in part in its sole discretion such Lien in
any manner that complies with this Section 7.07.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of determining compliance with any Dollar-denominated
restriction on the incurrence of Debt secured by Liens on Principal
Property, the Dollar-equivalent principal amount of Debt
denominated in a foreign currency will be calculated based on the
relevant currency exchange rate in effect on the date such Debt was
incurred, in the case of term Debt, or first committed, in the case
of revolving credit Debt; provided that if such Debt is incurred to
refinance other Debt denominated in the same foreign currency, and
such refinancing would cause the applicable Dollar-denominated
restriction to be exceeded if calculated at the relevant currency
exchange rate in effect on the date of such refinancing, the
Dollar-denominated restriction will be deemed not to have been
exceeded so long as the principal amount of the refinancing Debt
does not exceed the principal amount of the Debt being
refinanced.&nbsp; Notwithstanding any other provision of this
Section 7.07, the maximum amount of Debt secured by Liens on
Principal Property that the Company or any Significant Subsidiary
may incur pursuant to this covenant will not be deemed to be
exceeded solely as a result of fluctuations in the exchange rate of
currencies.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of this Section 7.07, &ldquo;Debt&rdquo; of a Significant
Subsidiary shall mean any debt of such Significant Subsidiary for
money borrowed and guarantees by such Significant Subsidiary of
debt for money borrowed, but in each case excluding liabilities in
respect of Capital Lease Obligations or Swap Agreements.</font></p>

<p align="center"><a name="_Toc101868318"><font size="3" face=
"Times New Roman"><br />
<b>ARTICLE VIII</b><br />
<br />
<b>SATISFACTION AND DISCHARGE</b></font></a></p>

<p><a name="_Toc101868319"><b><font size="3" face=
"Times New Roman">SECTION
8.01.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Satisfaction and Discharge of
Bonds</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face="Times New Roman">Any Bond or Bonds, or any
portion of the principal amount thereof, shall be deemed to have
been paid and no longer Outstanding for all purposes of this
Indenture, and the entire indebtedness of the Company in respect
thereof shall be satisfied and discharged, if there shall have been
irrevocably deposited with the Trustee or any Paying Agent (other
than the Company), in trust:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;money
in an amount which shall be sufficient, or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in
the case of a deposit made prior to the Maturity of such Bonds or
portions thereof, Eligible Obligations, which shall not contain
provisions permitting the redemption or other prepayment thereof at
the option of the issuer thereof, the principal of and the interest
on which when due, without any regard to reinvestment thereof, will
provide moneys which, together with the money, if any, deposited
with or held by the Trustee or such Paying Agent, shall be
sufficient, or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
combination of (a) or (b) which shall be sufficient to pay when due
the principal of and premium, if any, and interest, if any, due and
to become due on such Bonds or portions thereof; provided, however,
that in the case of the provision for payment or redemption of less
than all the Bonds of any series or Tranche, such Bonds or portions
thereof shall have been selected by the Bond Registrar as provided
herein and, in the case of a redemption, the notice requisite to
the validity of such redemption shall have been given or
irrevocable authority shall have been given by the Company to the
Trustee to give such notice, under arrangements satisfactory to the
Trustee; and provided, further, that the Company shall have
delivered to the Trustee and such Paying Agent:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
if such deposit shall have been made prior to the Maturity of such
Bonds, a Company Order stating that the money and Eligible
Obligations deposited in accordance with this Section shall be held
in trust, as provided in Section 8.03;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
if Eligible Obligations shall have been deposited, an Opinion of
Counsel to the effect that such obligations constitute Eligible
Obligations and do not contain provisions permitting the redemption
or other prepayment thereof at the option of the issuer thereof,
and an opinion of an Independent public Accountant of nationally
recognized standing, selected by the Company, to the effect that
the other requirements set forth in clause (b) above have been
satisfied; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
if such deposit shall have been made prior to the Maturity of such
Bonds, an Officer&rsquo;s Certificate stating the Company&rsquo;s
intention that, upon delivery of such Officer&rsquo;s Certificate,
its indebtedness in respect of such Bonds or portions thereof will
have been satisfied and discharged as contemplated in this
Section.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the deposit of money or Eligible Obligations, or both, in
accordance with this Section, together with the documents required
by clauses (x), (y) and (z) above, the Trustee shall, upon Company
Request, acknowledge in writing that such Bonds or portions thereof
are deemed to have been paid for all purposes of this Indenture and
that the entire indebtedness of the Company in respect thereof has
been satisfied and discharged as contemplated in this
Section.&nbsp; In the event that all of the conditions set forth in
the preceding paragraph shall have been satisfied in respect of any
Bonds or portions thereof except that, for any reason, the
Officer&rsquo;s Certificate specified in clause (z) (if otherwise
required) shall not have been delivered, such Bonds or portions
thereof shall nevertheless be deemed to have been paid for all
purposes of this Indenture, and the Holders of such Bonds or
portions thereof shall nevertheless be no longer entitled to the
benefits of this Indenture (other than with respect to such
deposit) or of any of the covenants of the Company under Article
VII (except the covenants contained in Sections 7.02 and 7.03) or
any other covenants made in respect of such Bonds or portions
thereof as contemplated by Section 3.01, but the indebtedness of
the Company in respect of such Bonds or portions thereof shall not
be deemed to have been satisfied and discharged prior to Maturity
for any other purpose; and, upon Company Request, the Trustee shall
acknowledge in writing that such Bonds or portions thereof are
deemed to have been paid for all purposes of this
Indenture.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
payment at Stated Maturity of less than all of the Bonds of any
series, or any Tranche thereof, is to be provided for in the manner
and with the effect provided in this Section, the Bond Registrar
shall select such Bonds, or portions of principal amount thereof,
in the manner specified by Section 6.03 for selection for
redemption of less than all the Bonds of a series or
Tranche.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event that Bonds which shall be deemed to have been paid for
purposes of this Indenture, and, if such is the case, in respect of
which the Company&rsquo;s indebtedness shall have been satisfied
and discharged, all as provided in this Section, do not mature and
are not to be redeemed within the sixty (60) day period commencing
with the date of the deposit of moneys or Eligible Obligations, as
aforesaid, the Company shall, as promptly as practicable, give a
notice, in the same manner as a notice of redemption with respect
to such Bonds, to the Holders of such Bonds to the effect that such
deposit has been made and the effect thereof.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
that any Bonds shall be deemed to have been paid for purposes of
this Indenture, as aforesaid, the obligations of the Company and
the Trustee in respect of such Bonds under Sections 3.04, 3.05,
3.06, 6.04, 7.02, 7.03, 10.07 and 10.15 and this Article shall
survive.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall pay, and shall indemnify the Trustee or any Paying
Agent with which Eligible Obligations shall have been deposited as
provided in this Section against, any tax, fee or other charge
imposed on or assessed against such Eligible Obligations or the
principal or interest received in respect of such Eligible
Obligations, including, but not limited to, any such tax payable by
any entity deemed, for tax purposes, to have been created as a
result of such deposit.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Anything
herein to the contrary notwithstanding, (a) if, at any time after a
Bond would be deemed to have been paid for purposes of this
Indenture, and, if such is the case, the Company&rsquo;s
indebtedness in respect thereof would be deemed to have been
satisfied and discharged, pursuant to this Section (without regard
to the provisions of this paragraph), the Trustee or any Paying
Agent, as the case may be, shall be required to return the money or
Eligible Obligations, or combination thereof, deposited with it as
aforesaid to the Company or its representative under any applicable
federal or state bankruptcy, insolvency or other similar law, such
Bond shall thereupon be deemed retroactively not to have been paid
and any satisfaction and discharge of the Company&rsquo;s
indebtedness in respect thereof shall retroactively be deemed not
to have been effected, and such Bond shall be deemed to remain
Outstanding and (b) any satisfaction and discharge of the
Company&rsquo;s indebtedness in respect of any Bond shall be
subject to the provisions of the last paragraph of Section
7.03.</font></p>

<p><a name="_Toc101868320"><b><font size="3" face=
"Times New Roman">SECTION
8.02.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Satisfaction and Discharge of
Indenture</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Indenture shall upon Company Request cease to be of further effect
(except as hereinafter expressly provided), and the Trustee, at the
expense of the Company, shall execute such instruments as the
Company shall reasonably request to evidence and acknowledge the
satisfaction and discharge of this Indenture, when:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;no
Bonds remain Outstanding hereunder;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Company has paid or caused to be paid all other sums payable
hereunder by the Company; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Company has delivered to the Trustee an Officer&rsquo;s Certificate
and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with;</font></p>

<p><font size="3" face="Times New Roman">provided, however, that
if, in accordance with the last paragraph of Section 8.01, any
Bond, previously deemed to have been paid for purposes of this
Indenture, shall be deemed retroactively not to have been so paid,
this Indenture shall thereupon be deemed retroactively not to have
been satisfied and discharged, as aforesaid, and to remain in full
force and effect, and the Company shall execute and deliver such
instruments as the Trustee shall reasonably request to evidence and
acknowledge the same.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
the satisfaction and discharge of this Indenture as aforesaid, the
obligations of the Company and the Trustee under Sections 3.04,
3.05, 3.06, 6.04, 7.02, 7.03, 10.07 and 10.15 and this Article
shall survive.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
satisfaction and discharge of this Indenture as provided in this
Section, the Trustee shall execute and deliver to the Company such
instruments as, in the judgment of the Company, shall be necessary,
desirable or appropriate to effect or evidence the satisfaction and
discharge of this Indenture.</font></p>

<p><a name="_Toc101868321"><b><font size="3" face=
"Times New Roman">SECTION
8.03.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Application of Trust
Money</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
the Eligible Obligations nor the money deposited pursuant to
Section 8.01, nor the principal or interest payments on any such
Eligible Obligations, shall be withdrawn or used for any purpose
other than, and shall be held in trust for, the payment of the
principal of and premium, if any, and interest, if any, on the
Bonds or portions of principal amount thereof in respect of which
such deposit was made, all subject, however, to the provisions of
Section 7.03; provided, however, that any cash received from such
principal or interest payments on such Eligible Obligations, if not
then needed for such purpose, shall, to the extent practicable and
upon Company Request and delivery to the Trustee of the documents
referred to in subclause (y) of clause (c) in Section 8.01, be
invested pursuant to a Company Order in Eligible Obligations of the
type described in clause (b) in Section 8.01 maturing at such times
and in such amounts as shall be sufficient, together with any other
moneys and the proceeds of any other Eligible Obligations then held
by the Trustee, to pay when due the principal of and premium, if
any, and interest, if any, due and to become due on such Bonds or
portions thereof on and prior to the Maturity thereof, and interest
earned from such reinvestment shall be paid over to the Company as
received; and provided, further, that any moneys held in accordance
with this Section on the Maturity of all such Bonds in excess of
the amount required to pay the principal of and premium, if any,
and interest, if any, then due on such Bonds shall be paid over to
the Company.</font></p>

<p align="center"><a name="_Toc101868322"><font size="3" face=
"Times New Roman"><br />
<b>ARTICLE IX</b><br />
<br />
<b>EVENTS OF DEFAULT; REMEDIES</b></font></a></p>

<p><a name="_Toc101868323"><b><font size="3" face=
"Times New Roman">SECTION
9.01.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Events of
Default</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;Event of Default&rdquo;, wherever used herein with respect
to the Bonds, means any of the following events which shall have
occurred and be continuing:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
failure to pay interest, if any, on any Bond within thirty (30)
days after the same becomes due and payable; or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
failure to pay the principal of or sinking fund installment, if
any, or premium, if any, on any Bond after the same becomes due and
payable; or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
failure to perform or breach of any covenant or warranty of the
Company in this Indenture (other than a covenant or warranty a
default in the performance of which or breach of which is elsewhere
in this Section specifically dealt with) for a period of ninety
(90) days after there has been given, by registered or certified
mail, return receipt requested, to the Company by the Trustee, or
to the Company and the Trustee by the Holders of at least
thirty-three percent (33%) in principal amount of the Bonds then
Outstanding, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a
&ldquo;Notice of Default&rdquo; hereunder, unless the Trustee, or
the Trustee and the Holders of a principal amount of Bonds not less
than the principal amount of Bonds the Holders of which gave such
notice, as the case may be, shall agree in writing to an extension
of such period prior to its expiration; or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law
or (ii) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition by one or more
Persons other than the Company seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under any
applicable federal or state bankruptcy, insolvency or other similar
law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official for the Company or
for any substantial part of its property, or ordering the winding
up or liquidation of its affairs, and any such decree or order for
relief or any such other decree or order shall have remained
unstayed and in effect for a period of ninety (90) consecutive
days; or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
commencement by the Company of a voluntary case or proceeding under
any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the
consent by the Company to the entry of a decree or order for relief
in respect of the Company in an involuntary case or proceeding
under any applicable federal or state bankruptcy, insolvency or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against the Company, or the filing by
the Company of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state
bankruptcy, insolvency or other similar law, or the consent by the
Company to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or of any
substantial part of its property, or the making by the Company of a
general assignment for the benefit of creditors, or an admission in
writing by the Company of its inability to pay its debts generally
as they become due; or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
occurrence of any event of default as defined in any mortgage,
indenture or instrument under which there may be issued, or by
which there may be secured or evidenced, any Debt of the Company,
whether such Debt existed on the Initial Issuance Date or shall
thereafter be created, if such event of default:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i) is caused by a failure to pay principal after final maturity of
such Debt after the expiration of the grace period provided in such
Debt (a &ldquo;Payment Default&rdquo;), or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii) results in the acceleration of such Debt prior to its express
maturity,</font></p>

<p><font size="3" face="Times New Roman">and in each case, the
principal amount of any such Debt, together with the principal
amount of any other such Debt under which there has been a Payment
Default or the maturity of which has been so accelerated,
aggregates $100,000,000 or more.</font></p>

<p><font size="3" face="Times New Roman">For purposes of Section
9.01(f), the amount of $100,000,000 shall be increased in any
calendar year subsequent to 2004 by the same percentage increase in
the CPI Index for the period commencing January 1, 2004 and ending
on January 1 of the applicable calendar year.</font></p>

<p><a name="_Toc101868324"><b><font size="3" face=
"Times New Roman">SECTION
9.02.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Acceleration of Maturity;
Rescission and Annulment</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
an Event of Default shall have occurred and be continuing, then in
every such case the Trustee or the Holders of not less than
thirty-three percent (33%) in aggregate principal amount of Bonds
then Outstanding, considered as one class, may declare the
principal amount (or, if any of the Bonds are Discount Bonds, such
portion of the principal amount of such Bonds as may be specified
in the terms thereof as contemplated by Section 3.01) of all Bonds
then Outstanding to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders),
and upon such declaration such principal amount (or specified
amount), together with premium, if any, and accrued interest, if
any, thereon, shall become immediately due and payable; provided,
however, that with respect to an Event of Default described in
Section 9.01(d) or (e), the principal amount (or, if any of the
Bonds are Discount Bonds, such portion of the principal amount of
such Bonds as may be specified in the terms thereof as contemplated
by Section 3.01) of all Bonds then Outstanding shall be due and
payable immediately without further action by the Trustee or
Holders.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
any time after such a declaration of acceleration of the Maturity
of the Bonds then Outstanding shall have been made, but before a
judgment or decree for payment of the money due shall have been
obtained by the Trustee as provided in this Article, the Event or
Events of Default giving rise to such declaration of acceleration
shall, without further act and notwithstanding anything to the
contrary in Section 316(a) of the Trust Indenture Act, be deemed to
have been waived, and such declaration and its consequences shall,
without further act, be deemed to have been rescinded and annulled,
if</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Company shall have paid or deposited with the Trustee a sum
sufficient to pay</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all
overdue interest, if any, on all Bonds then Outstanding;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
principal of and premium, if any, on any Bonds then Outstanding
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed
therefor in such Bonds; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all
amounts due to the Trustee under Section 10.07; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
other Event or Events of Default, other than the non-payment of the
principal of Bonds which shall have become due solely by such
declaration of acceleration, shall have been cured or waived as
provided in Section 9.13.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
such rescission shall affect any subsequent Event of Default or
impair any right consequent thereon.</font></p>

<p><a name="_Toc101868325"><b><font size="3" face=
"Times New Roman">SECTION
9.03.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Collection of Indebtedness
and Suits for Enforcement by
Trustee</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
an Event of Default described in clause (a) or (b) of Section 9.01
shall have occurred and be continuing, the Company shall, upon
demand of the Trustee, pay to it, for the benefit of the Holders of
the Bonds with respect to which such Event of Default shall have
occurred, the whole amount then due and payable on such Bonds for
principal and premium, if any, and interest, if any, and, in
addition thereto, such further amount as shall be sufficient to
cover any amounts due to the Trustee under Section
10.07.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Company shall fail to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express
trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid, may prosecute such proceeding to
judgment or final decree and may enforce the same against the
Company or any other obligor upon such Bonds and collect the moneys
adjudged or decreed to be payable in the manner provided by law out
of the property of the Company or any other obligor upon such
Bonds, wherever situated.&nbsp; No recovery of any such judgment by
the Trustee shall affect or impair any rights, powers or remedies
of the Trustee hereunder, or any rights, powers or remedies of the
Holders of the Bonds.</font></p>

<p><a name="_Toc101868326"><b><font size="3" face=
"Times New Roman">SECTION
9.04.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Application of Money
Collected</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
money collected by the Trustee pursuant to this Article, including
amounts collected pursuant to Section 9.03 (after the deductions
therein provided) shall be applied in the following order, to the
extent permitted by law, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of
principal or premium, if any, or interest, if any, upon
presentation of the Bonds and the notation thereon of the payment
if only partially paid and upon surrender thereof if fully
paid:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;First:
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To the payment of all amounts
due the Trustee under Section 10.07;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Second:&nbsp;&nbsp;&nbsp;
To the payment of the whole amount then due and unpaid upon the
Outstanding Bonds for principal and premium, if any, and interest,
if any, in respect of which or for the benefit of which such money
has been collected; and in case such proceeds shall be insufficient
to pay in full the whole amount so due and unpaid upon such Bonds,
then to the payment of such principal and interest, if any, thereon
without any preference or priority, ratably according to the
aggregate amount so due and unpaid, with any balance then remaining
to the payment of premium, if any, and, if so specified as
contemplated by Section 3.01 with respect to the Bonds of any
series, or any Tranche thereof, interest, if any, on overdue
premium, if any, and overdue interest, if any, ratably as
aforesaid, all to the extent permitted by applicable law; provided,
however, that any money collected by the Trustee pursuant to
Section 9.03 shall first be applied to the payment of interest
accrued on the principal of Outstanding Bonds; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Third:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To the payment of the remainder, if any, to the Company or to
whomsoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct.</font></p>

<p><a name="_Toc101868327"><b><font size="3" face=
"Times New Roman">SECTION
9.05.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Trustee May File Proofs of
Claim</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other
obligor upon the Bonds or the property of the Company or of such
other obligor or their creditors, the Trustee (irrespective of
whether the principal of the Bonds shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or
otherwise,</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
file and prove a claim for the whole amount of principal, premium,
if any, and interest, if any, owing and unpaid in respect of the
Bonds and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for amounts due to the Trustee under Section
10.07) and of the Holders allowed in such judicial proceeding,
and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the
same;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to
pay to the Trustee any amounts due it under Section
10.07.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nothing
herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition
affecting the Bonds or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder
in any such proceeding.</font></p>

<p><a name="_Toc101868328"><b><font size="3" face=
"Times New Roman">SECTION
9.06.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Trustee May Enforce Claims
Without Possession of Bonds</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
rights of action and claims under this Indenture or on the Bonds
may be prosecuted and enforced by the Trustee without the
possession of any of the Bonds or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by
the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel,
be for the ratable benefit of the Holders in respect of which such
judgment has been recovered.</font></p>

<p><a name="_Toc101868329"><b><font size="3" face=
"Times New Roman">SECTION
9.07.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Limitation on
Suits</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
Holder shall have any right to institute any proceeding, judicial
or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy
hereunder, unless:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;such
Holder shall have previously given written notice to the Trustee of
a continuing Event of Default;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Holders of at least thirty-three percent (33%) in aggregate
principal amount of the Bonds then Outstanding shall have made
written request to the Trustee to institute proceedings in respect
of such Event of Default in its own name as Trustee
hereunder;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;such
Holder or Holders shall have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Trustee for sixty (60) days after its receipt of such notice,
request and offer of indemnity shall have failed to institute any
such proceeding; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;no
direction inconsistent with such written request shall have been
given to the Trustee during such sixty (60) day period by the
Holders of at least a majority in aggregate principal amount of the
Bonds then Outstanding;</font></p>

<p><font size="3" face="Times New Roman">it being understood and
intended that no one or more of such Holders shall have any right
in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the
rights of any other of such Holders or to obtain or to seek to
obtain priority or preference over any other of such Holders or to
enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all of such
Holders.</font></p>

<p><a name="_Toc101868330"><b><font size="3" face=
"Times New Roman">SECTION
9.08.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Unconditional Right of
Holders to Receive Principal, Premium and
Interest</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
any other provision in this Indenture, the Holder of any Bond shall
have the right, which is absolute and unconditional, to receive
payment of the principal of and premium, if any, and (subject to
Section 3.07) interest, if any, on such Bond on the Stated Maturity
or Maturities expressed in such Bond (or, in the case of
redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be
impaired without the consent of such Holder.</font></p>

<p><a name="_Toc101868331"><b><font size="3" face=
"Times New Roman">SECTION
9.09.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Restoration of Rights and
Remedies</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding shall
have been discontinued or abandoned for any reason, or shall have
been determined adversely to the Trustee or to such Holder, then
and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and such Holder shall be
restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and
such Holder shall continue as though no such proceeding had been
instituted.</font></p>

<p><a name="_Toc101868332"><b><font size="3" face=
"Times New Roman">SECTION
9.10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Rights and Remedies
Cumulative</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as otherwise provided in the last paragraph of Section 3.06, no
right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in
equity or otherwise.&nbsp; The assertion or employment of any right
or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or
remedy.</font></p>

<p><a name="_Toc101868333"><b><font size="3" face=
"Times New Roman">SECTION
9.11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Delay or Omission Not
Waiver</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein.&nbsp; Every right and remedy
given by this Article or by law to the Trustee or to the Holders
may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may
be.</font></p>

<p><a name="_Toc101868334"><b><font size="3" face=
"Times New Roman">SECTION
9.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Control by Holders of
Bonds</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
an Event of Default shall have occurred and be continuing, the
Holders of not less than a majority in principal amount of the
Bonds then Outstanding shall have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred on the Trustee hereunder; provided, however,
that</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;such
direction shall not be in conflict with any rule of law or with
this Indenture, and could not involve the Trustee in personal
liability in circumstances where indemnity would not, in the
Trustee&rsquo;s sole discretion, be adequate, and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.</font></p>

<p><a name="_Toc101868335"><b><font size="3" face=
"Times New Roman">SECTION
9.13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Waiver of Past
Defaults</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Before
a judgment or decree for payment of the money due shall have been
obtained by the Trustee as in this Article provided, the Holders of
not less than a majority in principal amount of the Bonds then
Outstanding may on behalf of the Holders of all the Bonds then
Outstanding waive any past default hereunder and its consequences,
except a default</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in
the payment of the principal of or premium, if any, or interest, if
any, on any Bond Outstanding, or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in
respect of a covenant or provision hereof which under Section 13.02
cannot be modified or amended without the consent of the Holder of
each Outstanding Bond of any series or Tranche affected.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
any such waiver, such default shall cease to exist, and any and all
Events of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other default or impair any right
consequent thereon.</font></p>

<p><a name="_Toc101868336"><b><font size="3" face=
"Times New Roman">SECTION
9.14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Undertaking for
Costs</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company and the Trustee agree, and each Holder of Bonds by its
acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as
Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable
attorneys&rsquo; fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Company, to
any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than ten
percent (10%) in aggregate principal amount of the Bonds then
Outstanding, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of or premium, if any,
or interest, if any, on any Bond on or after the Stated Maturity or
Maturities expressed in such Bond (or, in the case of redemption,
on or after the Redemption Date).</font></p>

<p><a name="_Toc101868337"><b><font size="3" face=
"Times New Roman">SECTION
9.15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Waiver of Stay and Extension
Laws</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or
extension law, now or hereafter in effect, in order to prevent or
hinder the enforcement of this Indenture; and the Company, for
itself and all who may claim under it, so far as it or they now or
hereafter may lawfully do so, hereby waives the benefit of all such
laws.</font></p>

<p align="center"><a name="_Toc101868338"><font size="3" face=
"Times New Roman"><br />
<b>ARTICLE X</b><br />
<br />
<b>THE TRUSTEE</b></font></a></p>

<p><a name="_Toc101868339"><b><font size="3" face=
"Times New Roman">SECTION
10.01.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Certain Duties and
Responsibilities</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
during the continuance of an Event of Default,</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Trustee undertakes to perform such duties and only such duties as
are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against
the Trustee; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in
the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions
which by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
case an Event of Default shall have occurred and be continuing, the
Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person&rsquo;s own
affairs.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct or its own
bad faith, except that:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;this
subsection shall not be construed to limit the effect of subsection
(a) of this Section;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent
facts;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Bonds, as provided herein, relating to the time, method
and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;no
provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to
it.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Whether
or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the
provisions of this Section.</font></p>

<p><a name="_Toc101868340"><b><font size="3" face=
"Times New Roman">SECTION
10.02.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Notice of
Defaults</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within
ninety (90) days after the occurrence of any default hereunder, the
Trustee shall transmit by mail to all Holders notice of such
default hereunder known to the Trustee, unless such default shall
have been cured or waived; provided, however, that, except in the
case of a default in the payment of the principal of (or premium,
if any) or interest, if any, on any Bond, or in the payment of any
sinking fund installment with respect to a Bond, the Trustee shall
be protected in withholding such notice if and so long as the board
of directors, executive committee or a trust committee of directors
or a Responsible Officer of the Trustee in good faith determine
that the withholding of such notice is in the interest of the
Holders; provided, further, that, in the case of any default of the
character specified in Section 9.01(c), no such notice to Holders
shall be given until at least sixty (60) days after the occurrence
thereof.&nbsp; For the purpose of this Section, the term
&ldquo;default&rdquo; means any event which is, or after notice or
lapse of time or both would become, an Event of Default.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Trustee shall not be deemed to have knowledge of any default
specified in Section 9.01(c), 9.01(d) or 9.01(e) hereunder unless
and until a Responsible Officer shall have actual knowledge
thereof, or shall have received written notice thereof at its
Corporate Trust Office.&nbsp; In the absence of such actual
knowledge or notice, the Trustee may conclusively assume that no
such default has occurred and is continuing under this
Indenture.&nbsp; Except as otherwise expressly provided herein, the
Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any of the terms, conditions,
covenants or agreements herein or of any of the documents executed
in connection with Bonds issued hereunder, or as to the existence
of a default or Event of Default hereunder.</font></p>

<p><a name="_Toc101868341"><b><font size="3" face=
"Times New Roman">SECTION
10.03.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Certain Rights of
Trustee</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to the provisions of Section 10.01 and to the applicable provisions
of the Trust Indenture Act:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, or as
otherwise expressly provided herein, and any resolution of the
Board of Directors may be sufficiently evidenced by a Board
Resolution;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;whenever
in the administration of this Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless
other evidence is specifically prescribed herein) may, in the
absence of bad faith on its part, conclusively rely upon an
Officer&rsquo;s Certificate;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Trustee may consult with counsel and the advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by
it hereunder in good faith and in reliance thereon;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or
direction of any Holder pursuant to this Indenture, unless such
Holder shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might
be incurred by it in compliance with such request or
direction;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or
other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall (subject to
applicable legal requirements) be entitled to examine, during
normal business hours, the books, records and premises of the
Company, personally or by agent or attorney;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.</font></p>

<p><a name="_Toc101868342"><b><font size="3" face=
"Times New Roman">SECTION
10.04.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Not Responsible for Recitals
or Issuance of Bonds or Application of
Proceeds</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
recitals contained herein and in the Bonds (except the
Trustee&rsquo;s certificate of authentication on the Bonds) shall
be taken as the statements of the Company, and neither the Trustee
nor any Authenticating Agent assumes any responsibility for their
correctness.&nbsp; The Trustee makes no representations as to the
validity or genuineness of any securities at any time deposited
with the Trustee hereunder, or as to the validity or sufficiency of
this Indenture or of the Bonds.&nbsp; The Trustee shall not be
accountable for the use or application by the Company of the Bonds
or the proceeds thereof or of any money paid to the Company or upon
Company Order under any provision hereof.&nbsp; Neither the Trustee
nor any Authenticating Agent shall be accountable for the use or
application by the Company of Bonds or the proceeds
thereof.</font></p>

<p><a name="_Toc101868343"><b><font size="3" face=
"Times New Roman">SECTION
10.05.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>May Hold
Bonds</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
of the Trustee, any Authenticating Agent, any Paying Agent, any
Bond Registrar or any other agent of the Company or the Trustee, in
its individual or any other capacity, may become the owner or
pledgee of Bonds and, subject to Sections 10.08 and 10.13, may
otherwise deal with the Company with the same rights it would have
if it were not such Trustee, Authenticating Agent, Paying Agent,
Bond Registrar or other agent.</font></p>

<p><a name="_Toc101868344"><b><font size="3" face=
"Times New Roman">SECTION
10.06.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Money Held in
Trust</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Money
held by the Trustee in trust hereunder need not be segregated from
other funds, except to the extent required by law or as otherwise
provided in this Indenture.&nbsp; The Trustee shall be under no
liability for interest on or investment of any money received by it
hereunder (provided that the Trustee has invested such money in
accordance with a Company Order) except as expressly provided
herein or otherwise agreed with, and for the sole benefit of, the
Company.</font></p>

<p><a name="_Toc101868345"><b><font size="3" face=
"Times New Roman">SECTION
10.07.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Compensation and
Reimbursement</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company agrees</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of
a trustee of an express trust);</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;except
as otherwise expressly provided herein, to reimburse the Trustee
upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents and counsel),
except to the extent that any such expense, disbursement or advance
may be attributable to its negligence, willful misconduct or bad
faith; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
indemnify the Trustee (which for purposes of this Section shall
include its officers, directors, employees and agents) and hold it
harmless from and against any loss, liability or expense reasonably
incurred without negligence, willful misconduct or bad faith on its
part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder or the exercise or
performance of its duties hereunder, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.&nbsp; &ldquo;Trustee&rdquo; for purposes of this
Section shall include any predecessor Trustee; provided, however,
that the negligence, willful misconduct or bad faith of any Trustee
hereunder shall not affect the rights of any other Trustee
hereunder.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition and without prejudice to the rights provided to the
Trustee under any of the provisions of this Indenture, when the
Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 9.01(d) or Section 9.01(e),
the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to
constitute expenses of administration under any applicable federal
or state bankruptcy, insolvency or other similar law.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
provisions of this Section shall survive the termination of this
Indenture and the resignation or removal of the Trustee.</font></p>

<p><a name="_Toc101868346"><b><font size="3" face=
"Times New Roman">SECTION
10.08.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Disqualification;
Conflicting Interests</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Trustee shall have or acquire any conflicting interest within
the meaning of the Trust Indenture Act, it shall either eliminate
such conflicting interest or resign to the extent, in the manner
and with the effect, and subject to the conditions, provided in the
Trust Indenture Act and this Indenture.&nbsp; For purposes of
Section 310(b)(1) of the Trust Indenture Act and to the extent
permitted thereby, the Trustee, in its capacity as trustee in
respect of the Bonds of any series, shall not be deemed to have a
conflicting interest arising from its capacity as trustee in
respect of the Bonds of any other series.</font></p>

<p><a name="_Toc101868347"><b><font size="3" face=
"Times New Roman">SECTION
10.09.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Corporate Trustee Required;
Eligibility</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
shall at all times be a Trustee hereunder which shall be</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
corporation organized and doing business under the laws of the
United States, any state or territory thereof or the District of
Columbia, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least Fifty
Million Dollars ($50,000,000) and subject to supervision or
examination by federal or state authority, or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if
and to the extent permitted by the Commission by rule, regulation
or order upon application, a corporation or other Person organized
and doing business under the laws of a foreign government,
authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least Fifty Million
Dollars ($50,000,000) or the Dollar equivalent of the applicable
foreign currency and subject to supervision or examination by
authority of such foreign government or a political subdivision
thereof substantially equivalent to supervision or examination
applicable to United States institutional trustees,</font></p>

<p><font size="3" face="Times New Roman">and, in either case,
qualified and eligible under this Article and the Trust Indenture
Act.&nbsp; If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of such
supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published.&nbsp; If at any
time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the
manner and with the effect hereinafter specified in this
Article.</font></p>

<p><a name="_Toc101868348"><b><font size="3" face=
"Times New Roman">SECTION
10.10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Resignation and Removal;
Appointment of Successor</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective
until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section
10.11.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Trustee may resign at any time by giving written notice thereof to
the Company.&nbsp; If the instrument of acceptance by a successor
Trustee required by Section 10.11 shall not have been delivered to
the Trustee within thirty (30) days after the giving of such notice
of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor
Trustee.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Bonds then Outstanding
delivered to the Trustee and to the Company.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
at any time:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Trustee shall fail to comply with Section 10.08 after written
request therefor by the Company or by any Holder who has been a
bona fide Holder for at least six (6) months, or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Trustee shall cease to be eligible under Section 10.09 or Section
310(a) of the Trust Indenture Act and shall fail to resign after
written request therefor by the Company or by any such Holder,
or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge
or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,</font></p>

<p><font size="3" face="Times New Roman">then, in any such case,
(x) the Company by a Board Resolution may remove the Trustee or (y)
subject to Section 9.14, any Holder who has been a bona fide Holder
for at least six (6) months may, on behalf of itself and all others
similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor
Trustee or Trustees.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause
(other than as contemplated in clause (y) in subsection (d) of this
Section), the Company, by a Board Resolution, shall take prompt
steps to appoint a successor Trustee or Trustees and shall comply
with the applicable requirements of Section 10.11.&nbsp; If, within
one (1) year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount
of the Bonds then Outstanding delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 10.11, become the
successor Trustee and to that extent supersede the successor
Trustee appointed by the Company.&nbsp; If no successor Trustee
shall have been so appointed by the Company or the Holders and
accepted appointment in the manner required by Section 10.11, the
Holders of at least ten percent (10%) in aggregate principal amount
of the then Outstanding Bonds may petition any court of competent
jurisdiction for the appointment of a successor Trustee.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;So
long as no event which is, or after notice or lapse of time, or
both, would become, an Event of Default shall have occurred and be
continuing, if the Company shall have delivered to the Trustee (i)
a Board Resolution appointing a successor Trustee, effective as of
a date specified therein, and (ii) an instrument of acceptance of
such appointment, effective as of such date, by such successor
Trustee in accordance with Section 10.11, the Trustee shall be
deemed to have resigned as contemplated in subsection (b) of this
Section, the successor Trustee shall be deemed to have been
appointed pursuant to subsection (e) of this Section and such
appointment shall be deemed to have been accepted as contemplated
in Section 10.11, all as of such date, and all other provisions of
this Section and Section 10.11 shall be applicable to such
resignation, appointment and acceptance except to the extent
inconsistent with this subsection&nbsp; (f).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee by mailing
written notice of such event by first-class mail, postage prepaid,
to all Holders as their names and addresses appear in the Bond
Register.&nbsp; Each notice shall include the name of the successor
Trustee and the address of its Corporate Trust Office.</font></p>

<p><a name="_Toc101868349"><b><font size="3" face=
"Times New Roman">SECTION
10.11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Acceptance of Appointment by
Successor</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
case of the appointment hereunder of a successor Trustee, every
such successor Trustee so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee.&nbsp; Such retiring Trustee shall execute
and deliver an instrument transferring to such successor Trustee
all the rights, powers and trusts of the retiring Trustee and shall
duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee
hereunder.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
request of any such successor Trustee, the Company shall execute
any instruments which fully vest in and confirm to such successor
Trustee all rights, powers and trusts referred to in subsection (a)
of this Section.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and
eligible under this Article.</font></p>

<p><a name="_Toc101868350"><b><font size="3" face=
"Times New Roman">SECTION
10.12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Merger, Conversion,
Consolidation or Succession to
Business</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto.&nbsp; In case
any Bonds shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such
authentication and deliver the Bonds so authenticated with the same
effect as if such successor Trustee had itself authenticated such
Bonds.</font></p>

<p><a name="_Toc101868351"><b><font size="3" face=
"Times New Roman">SECTION
10.13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Preferential Collection of
Claims Against Company</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Trustee shall be or become a creditor of the Company or any
other obligor upon the Bonds (other than by reason of a
relationship described in Section 311(b) of the Trust Indenture
Act), the Trustee shall be subject to any and all applicable
provisions of the Trust Indenture Act regarding the collection of
claims against the Company or such other obligor.&nbsp;</font></p>

<p><a name="_Toc101868352"><b><font size="3" face=
"Times New Roman">SECTION
10.14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Co-Trustees and Separate
Trustees</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
any time or times, for the purpose of meeting the legal
requirements of any jurisdiction, the Company and the Trustee shall
have power to appoint, and, upon the written request of the Trustee
or of the Holders of at least thirty-three percent (33%) in
principal amount of the Bonds then Outstanding, the Company shall
for such purpose join with the Trustee in the execution and
delivery of all instruments and agreements necessary or proper to
appoint, one or more Persons approved by the Trustee and, if no
Event of Default shall have occurred and be continuing, by the
Company either to act as co-trustee under this Indenture, jointly
with the Trustee, or to act as separate trustee under this
Indenture, in either case with such powers as may be provided in
the instrument of appointment, and to vest in such Person or
Persons, in the capacity aforesaid, any property, title, right or
power deemed necessary or desirable, subject to the other
provisions of this Section.&nbsp; If the Company does not join in
such appointment within fifteen (15) days after the receipt by it
of a request so to do, or if an Event of Default shall have
occurred and be continuing, the Trustee alone shall have power to
make such appointment.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Should
any written instrument or instruments from the Company be required
by any co-trustee or separate trustee so appointed to more fully
confirm to such co-trustee or separate trustee such property,
title, right or power, any and all such instruments shall, on
request, be executed, acknowledged and delivered by the
Company.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Every
co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following
conditions:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Bonds shall be authenticated and delivered, and all rights, powers,
duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by the Trustee
hereunder shall be exercised solely by the Trustee;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
rights, powers, duties and obligations hereby conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised
or performed either by the Trustee or by the Trustee and such
co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except
to the extent that under any law of any jurisdiction in which any
particular act is to be performed, the Trustee shall be incompetent
or unqualified to perform such act, in which event such rights,
powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Trustee at any time, by an instrument in writing executed by it,
with the concurrence of the Company, may accept the resignation of
or remove any co-trustee or separate trustee appointed under this
Section, and, if an Event of Default shall have occurred and be
continuing, the Trustee shall have power to accept the resignation
of, or remove, any such co-trustee or separate trustee without the
concurrence of the Company.&nbsp; Upon the written request of the
Trustee, the Company shall join with the Trustee in the execution
and delivery of all instruments and agreements necessary or proper
to effectuate such resignation or removal.&nbsp; A successor to any
co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section;</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;neither
the Trustee nor any co-trustee or separate trustee hereunder shall
be personally liable by reason of any act or omission of any other
trustee hereunder; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
Act of Holders delivered to the Trustee shall be deemed to have
been delivered to each such co-trustee and separate
trustee.</font></p>

<p><a name="_Toc101868353"><b><font size="3" face=
"Times New Roman">SECTION
10.15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Appointment of
Authenticating Agent</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Trustee may appoint an Authenticating Agent or Agents with respect
to the Bonds of one or more series, or any Tranche thereof, which
shall be authorized to act on behalf of the Trustee to authenticate
Bonds of such series or Tranche issued upon original issuance,
exchange, registration of transfer or partial redemption thereof or
pursuant to Section 3.06, and Bonds so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee
hereunder.&nbsp; Wherever reference is made in this Indenture to
the authentication and delivery of Bonds by the Trustee or the
Trustee&rsquo;s certificate of authentication, such reference shall
be deemed to include authentication and delivery on behalf of the
Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an
Authenticating Agent.&nbsp; Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation
organized and doing business under the laws of the United States,
any state or territory thereof or the District of Columbia or the
Commonwealth of Puerto Rico, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not
less than Fifty Million Dollars ($50,000,000) and subject to
supervision or examination by federal or state authority.&nbsp; If
such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Authenticating
Agent shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.&nbsp; If
at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect
specified in this Section.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which
such Authenticating Agent shall be a party, or any corporation
succeeding to all or substantially all of the corporate agency or
corporate trust business of an Authenticating Agent, shall continue
to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or
filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company.&nbsp; The Trustee
may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to
the Company.&nbsp; Upon receiving such a notice of resignation or
upon such a termination, or in case at any time such Authenticating
Agent shall cease to be eligible in accordance with the provisions
of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company.&nbsp; Any successor
Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as
an Authenticating Agent.&nbsp; No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this
Section.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this
Section.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
provisions of Sections 3.03, 10.04 and 10.05 shall be applicable to
each Authenticating Agent.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
an appointment with respect to the Bonds of one or more series, or
any Tranche thereof, shall be made pursuant to this Section, the
Bonds of such series or Tranche may have endorsed thereon, in
addition to the Trustee&rsquo;s certificate of authentication, an
alternate certificate of authentication substantially in the
following form:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
is one of the Bonds of the series designated therein referred to in
the within-mentioned Indenture.</font></p>

<p><font size="3" face=
"Times New Roman">&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;___________________________,
as Trustee</font></p>

<p><font size="3" face=
"Times New Roman">&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;By
<u>&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;<br />

</u>&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;As Authenticating Agent</font></p>

<p><font size="3" face=
"Times New Roman">&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;By
<u>&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;<br>
</u>&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;Authorized Officer</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
all of the Bonds of a series may not be originally issued at one
time, and if the Trustee does not have an office capable of
authenticating Bonds upon original issuance located in a Place of
Payment where the Company wishes to have Bonds of such series
authenticated upon original issuance, the Trustee, if so requested
by the Company in writing (which writing need not comply with
Section 1.02 and need not be accompanied by an Opinion of Counsel),
shall appoint, in accordance with this Section and in accordance
with such procedures as shall be acceptable to the Trustee, an
Authenticating Agent having an office in a Place of Payment
designated by the Company with respect to such series of
Bonds.</font></p>

<p><a name="_Toc101868354"><b><font size="3" face=
"Times New Roman">SECTION
10.16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Further
Assurances</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
the Release Date, the lien of the Prior Indenture was discharged,
cancelled, terminated and satisfied, and as a result, all Bonds are
unsecured obligations of the Company. To the extent necessary to
evidence or make effective such discharge, cancellation,
termination and satisfaction, the Trustee shall, promptly upon
request of the Company, (i) authorize, execute and deliver to the
order of the Company such documents or instruments as, in the
judgment of the Company, may be necessary, desirable or appropriate
to discharge, cancel, terminate and satisfy the lien of the Prior
Indenture,&nbsp; and (ii) execute and deliver to the Company such
deeds, termination statements and other documents and instruments
as, in the judgment of the Company, may be necessary, desirable or
appropriate to release, quitclaim or otherwise turn over to the
Company all Mortgaged Property (as defined in the Prior
Indenture).</font></p>

<p align="center"><a name="_Toc101868355"><font size="3" face=
"Times New Roman"><br />
<b>ARTICLE XI</b><br />
<br />
<b>LISTS OF HOLDERS; REPORTS BY TRUSTEE AND
COMPANY</b></font></a></p>

<p><a name="_Toc101868356"><b><font size="3" face=
"Times New Roman">SECTION
11.01.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Lists of
Holders</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Semiannually,
not less than forty&#8209;five (45) days nor more than sixty (60)
days after June 1 and December 1 in each year, commencing 2004, and
at such other times as the Trustee may request in writing, the
Company shall furnish or cause to be furnished to the Trustee,
information as to the names and addresses of the Holders as of a
date no more than fifteen (15) days prior to the date such
information is so furnished, and the Trustee shall preserve such
information and similar information received by it in any other
capacity and afford to the Holders access to information so
preserved by it, all to such extent, if any, and in such manner as
shall be required by the Trust Indenture Act; provided, however,
that no such list need be furnished so long as the Trustee shall be
the Bond Registrar.</font></p>

<p><a name="_Toc101868357"><b><font size="3" face=
"Times New Roman">SECTION
11.02.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Reports by Trustee and
Company</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not
later than July 15 in each year, commencing July 15, 2005, the
Trustee shall transmit to the Holders, the Commission and each
securities exchange upon which any Bonds are listed a report, dated
as of the next preceding May 15, with respect to any events and
other matters described in Section 313(a) of the Trust Indenture
Act, in such manner and to the extent required by the Trust
Indenture Act.&nbsp; The Trustee shall transmit to the Holders, the
Commission and each securities exchange upon which any Bonds are
listed, and the Company shall file with the Trustee (within thirty
(30) days after filing with the Commission in the case of reports
which pursuant to the Trust Indenture Act must be filed with the
Commission and furnished to the Trustee) and cause to be
transmitted to the Holders, such other information, reports and
other documents, if any, at such times and in such manner, as shall
be required by the Trust Indenture Act.&nbsp; Delivery of such
reports, information and documents to the Trustee is for
informational purposes only and the Trustee&rsquo;s receipt of such
shall not constitute constructive notice of any information
contained therein or determinable from information contained
therein, including the Company&rsquo;s compliance with any of its
covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers&rsquo; Certificates).&nbsp; The Company
shall notify the Trustee of the listing of any Bonds on any
securities exchange.</font></p>

<p align="center"><a name="_Toc101868358"><font size="3" face=
"Times New Roman"><br />
<b>ARTICLE XII</b><br />
<br />
<b>CONSOLIDATION, MERGER, CONVEYANCE OR OTHER
TRANSFER</b></font></a></p>

<p><a name="_Toc101868359"><b><font size="3" face=
"Times New Roman">SECTION
12.01.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Company May Consolidate,
etc., Only on Certain Terms</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall not consolidate with or merge with or into any other
Person, or convey, or otherwise transfer, or lease, all or
substantially all of the Principal Property to any Person,
unless:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Person formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance or other
transfer, or which leases, all or substantially all of the
Principal Property shall be a corporation, shall be organized and
existing under the laws of the United States, any state thereof or
the District of Columbia (such corporation being hereinafter
sometimes called the &ldquo;Successor Corporation&rdquo;) and shall
execute and deliver to the Trustee an indenture supplemental
hereto, in form reasonably satisfactory to the Trustee, which in
the case of a consolidation, merger, conveyance or other transfer,
or in the case of a lease if the term thereof extends beyond the
last Stated Maturity of the Bonds then Outstanding, contains an
assumption by the Successor Corporation of the due and punctual
payment of the principal of and premium, if any, and interest, if
any, on all the Bonds then Outstanding and the performance and
observance of every covenant and condition of this Indenture to be
performed or observed by the Company, and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in
the case of a lease, such lease shall be made expressly subject to
termination by the Company or by the Trustee at any time during the
continuance of an Event of Default, and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;immediately
after giving effect to such transaction and treating any
indebtedness which becomes an obligation of the Company as a result
of such transaction as having been incurred by the Company at the
time of such transaction, no Default or Event of Default shall have
occurred and be continuing; and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Company has delivered to the Trustee an Officer&rsquo;s Certificate
and an Opinion of Counsel, each stating that the merger,
consolidation, conveyance, lease or transfer, as the case may be,
fully complies with all provisions of this Indenture; provided,
however, that the delivery of such an Officer&rsquo;s Certificate
and Opinion of Counsel shall not be required with respect to any
merger, consolidation, conveyance, transfer or lease between the
Company and any of its wholly-owned Subsidiaries.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
the foregoing, the Company may merge or consolidate with or
transfer all or substantially all of its assets to an Affiliate
that has no significant assets or liabilities and was formed solely
for the purpose of changing the jurisdiction of organization of the
Company or the form of organization of the Company or for the
purpose of forming a holding company; provided that the amount of
indebtedness of the Company is not increased thereby; and provided,
further that the successor assumes all obligations of the Company
under this Indenture.</font></p>

<p><a name="_Toc101868360"><b><font size="3" face=
"Times New Roman">SECTION
12.02.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Successor Corporation
Substituted</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
any consolidation or merger or any conveyance or other transfer of
all or substantially all of the Principal Property in accordance
with Section 12.01, the Successor Corporation shall succeed to, and
be substituted for, and may exercise every power and right of, the
Company under this Indenture with the same effect as if such
Successor Corporation had been named as the &ldquo;Company&rdquo;
herein.&nbsp; Without limiting the generality of the foregoing, the
Successor Corporation may execute and deliver to the Trustee, and
thereupon the Trustee shall, subject to the provisions of Article
V, authenticate and deliver, Bonds in accordance with the
provisions hereof.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
Bonds so executed by the Successor Corporation, and authenticated
and delivered by the Trustee, shall in all respects be entitled to
the benefits of this Indenture equally and ratably with all Bonds
executed, authenticated and delivered prior to the time such
consolidation, merger, conveyance or other transfer became
effective.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
case of any such consolidation, merger, sale, conveyance or lease,
changes in phraseology and form may be made in the Bonds thereafter
to be issued and the documentation thereafter to be delivered
hereunder as may be appropriate to reflect such
occurrence.</font></p>

<p><a name="_Toc101868361"><b><font size="3" face=
"Times New Roman">SECTION
12.03.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Property of Successor
Corporation</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless,
in the case of a consolidation, merger, conveyance or other
transfer contemplated by Section&nbsp;12.01, the indenture
supplemental hereto contemplated in clause&nbsp;(a) in
Section&nbsp;12.01, or any other indenture, so provides, none of
the properties:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;owned
by the Successor Corporation or any other party to such transaction
(other than the Company) immediately prior to the time of
effectiveness of such transaction or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;acquired
by the Successor Corporation at or after the time of effectiveness
of such transaction,</font></p>

<p><font size="3" face="Times New Roman">shall be or become
Principal Property, except, in either case, Principal Property
acquired from the Company in or as a result of such transaction and
to the extent not constituting Excepted Property, improvements,
extensions and additions to such Principal Property and renewals,
replacements and substitutions of or for any part or parts of such
Principal Property.</font></p>

<p><a name="_Toc101868362"><b><font size="3" face=
"Times New Roman">SECTION
12.04.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Release of Company Upon
Conveyance or Other Transfer</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the case of a conveyance or other transfer to any Person or Persons
as contemplated in Section 12.01, upon the satisfaction of all the
conditions specified in Section 12.01, the Company (such term being
used in this Section without giving effect to such transaction)
shall be released and discharged from all obligations and covenants
under this Indenture and on and under all Bonds then Outstanding
(unless the Company shall have delivered to the Trustee an
instrument in which it shall waive such release and discharge) and
the Trustee shall acknowledge in writing that the Company has been
so released and discharged.</font></p>

<p><a name="_Toc101868363"><b><font size="3" face=
"Times New Roman">SECTION
12.05.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Merger Into
Company</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nothing
in this Indenture shall be deemed to prevent or restrict any
consolidation or merger after the consummation of which the Company
would be the surviving or resulting company or any conveyance or
other transfer, or lease, of any part of the Principal Property
which does not constitute the entirety, or substantially the
entirety, thereof.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless,
in the case of a consolidation or merger described in
subsection&nbsp;(a) of this Section, an indenture supplemental
hereto shall otherwise provide, none of the properties acquired by
the Company in or as a result of such transaction or any
improvements, extensions or additions to such properties or any
renewals, replacements or substitutions of or for any part or parts
thereof shall be or become Principal Property.</font></p>

<p align="center"><a name="_Toc101868364"><font size="3" face=
"Times New Roman"><br />
<b>ARTICLE XIII</b><br />
<br />
<b>SUPPLEMENTAL INDENTURES</b></font></a></p>

<p><a name="_Toc101868365"><b><font size="3" face=
"Times New Roman">SECTION
13.01.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Supplemental Indentures
Without Consent of Holders</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Without
the consent of any Holders, the Company and the Trustee, at any
time and from time to time, may enter into one or more indentures
supplemental hereto, in form reasonably satisfactory to the
Trustee, for any of the following purposes:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company
herein and in the Bonds, all as provided in Article XII;
or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
add one or more covenants of the Company or other provisions for
the benefit of all Holders or for the benefit of the Holders of, or
to remain in effect only so long as there shall be Outstanding,
Bonds of one or more specified series, or one or more specified
Tranches thereof; or to surrender any right or power herein
conferred upon the Company; or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
change or eliminate any provision of this Indenture or to add any
new provision to this Indenture; provided, however, that if such
change, elimination or addition shall adversely affect the
interests of the Holders of Bonds of any series or Tranche in any
material respect, such change, elimination or addition shall become
effective with respect to such series or Tranche only when no Bond
of such series or Tranche remains Outstanding; or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
establish the form or terms of Bonds of any series or Tranche as
contemplated by Sections 2.01 and 3.01; or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
evidence and provide for the acceptance of appointment hereunder by
a separate or successor Trustee with respect to the Bonds of one or
more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 10.11(b); or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
provide for the procedures required to permit the Company to issue,
at its option, all or any series or Tranche of, the Bonds as
uncertificated securities; or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
change any place or places where (1) the principal of and premium,
if any, and interest, if any, on all or any series of Bonds, or any
Tranche thereof, shall be payable, (2) all or any series of Bonds,
or any Tranche thereof, may be surrendered for registration of
transfer, (3) all or any series of Bonds, or any Tranche thereof,
may be surrendered for exchange and (4) notices and demands to or
upon the Company in respect of all or any series of Bonds, or any
Tranche thereof, and this Indenture may be served; or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
cure any ambiguity, to correct or supplement any provision herein
which may be defective or inconsistent with any other provision
herein; or to make any other additions to, deletions from or other
changes to the provisions under this Indenture, provided that such
additions, deletions and/or other changes shall not materially
adversely affect the interests of the Holders of Bonds of any
series or Tranche in any material respect; or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to continue the qualification of
this Indenture under the Trust Indenture Act, or under any similar
federal statute enacted after March&nbsp;11, 2004, and to add to
this Indenture such other provisions as may be expressly permitted
by the Trust Indenture Act, excluding, however the provisions
referred to in Section 316(a)(2) of the Trust Indenture Act as in
effect on March&nbsp;11, 2004 or any corresponding provision in any
similar federal statute enacted after March&nbsp;11, 2004;
or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
supplement any of the provisions of this Indenture to such extent
as shall be necessary to permit or facilitate the discharge of any
series of Bonds pursuant to Section 8.02; provided that any such
action shall not adversely affect the interests of the Holders of
Bonds of such series or any other series of Bonds in any material
respect; or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
comply with the rules or regulations of any securities exchange or
automated quotation system on which any of the Bonds may be listed
or traded.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Without
limiting the generality of the foregoing, if the Trust Indenture
Act as in effect on the Initial Issuance Date, or at any time
thereafter shall be amended and</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
if any such amendment shall require one or more changes to any
provisions hereof or the inclusion herein of any additional
provisions, or shall by operation of law be deemed to effect such
changes or incorporate such provisions by reference or otherwise,
this Indenture shall be deemed to have been amended so as to
conform to such amendment to the Trust Indenture Act, and the
Company and the Trustee may, without the consent of any Holders,
enter into an indenture supplemental hereto to evidence such
amendment hereof; or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
if any such amendment shall permit one or more changes to, or the
elimination of, any provisions hereof which, as of March&nbsp;11,
2004 or at any time thereafter, are required by the Trust Indenture
Act to be contained herein or are contained herein to reflect any
provisions of the Trust Indenture Act as in effect at such date,
this Indenture shall be deemed to have been amended to effect such
changes or elimination, and the Company and the Trustee may,
without the consent of any Holders, enter into an indenture
supplemental hereto to amend this Indenture to effect such changes
or elimination.</font></p>

<p><a name="_Toc101868366"><b><font size="3" face=
"Times New Roman">SECTION
13.02.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Supplemental Indentures With
Consent of Holders</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to the provisions of Section 13.01, with the consent of the Holders
of not less than a majority in aggregate principal amount of the
Bonds of all series then Outstanding under this Indenture,
considered as one class, by Act of said Holders delivered to the
Company and the Trustee, the Company and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture; provided, however, that
if there shall be Bonds of more than one series Outstanding
hereunder and if a proposed supplemental indenture shall directly
affect the rights of the Holders of Bonds of one or more, but less
than all, of such series, then the consent only of the Holders of
not less than a majority in aggregate principal amount of the
Outstanding Bonds of all series so directly affected, considered as
one class, shall be required; and provided, further, that if the
Bonds of any series shall have been issued in more than one Tranche
and if a proposed supplemental indenture shall directly affect the
rights of the Holders of Bonds of one or more, but less than all,
of such Tranches, then the consent only of the Holders of a
majority in aggregate principal amount of the Outstanding Bonds of
all Tranches so directly affected, considered as one class, shall
be required; and provided, further, that no such supplemental
indenture shall, without the consent of the Holder of each
Outstanding Bond of each series or Tranche so directly
affected:</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;except
as otherwise specified in the form or terms of the Bonds of any
series as permitted by Sections 2.01 and 3.01 with respect to
extending the Stated Maturity of any Bond of such series, change
the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Bond, or reduce the principal
amount thereof or the rate of interest thereon (or the amount of
any installment of interest thereon) or change the method of
calculating such rate or reduce any premium payable thereon, or
reduce the amount of the principal of any Discount Bond that would
be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 9.02, or change the coin or
currency (or other property), in which any Bond or premium, if any,
or interest, if any, thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after
the Maturity of any Bond, without, in any such case, the consent of
the Holder of such Bond; or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;reduce
the percentage in principal amount of the Outstanding Bonds of any
series, or any Tranche thereof, the consent of the Holders of which
is required for any such supplemental indenture, or the consent of
the Holders of which is required for any waiver of compliance with
any provision of this Indenture or of any default hereunder and its
consequences, or reduce the requirements of Section 14.04 for
quorum or voting; or</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;modify
any of the provisions of this Section, Section 7.05 or Section 9.13
with respect to the Bonds of any series or any Tranche thereof
(except to increase the percentages in principal amount referred to
in this Section or such other Sections or to provide that other
provisions of this Indenture cannot be modified or waived without
the consent of the Holders of all Bonds of such series or Tranche)
without, in any such case, the consent of the Holder of each
Outstanding Bond of such series or Tranche; provided, however, that
this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to &ldquo;the
Trustee&rdquo; and concomitant changes in this Section, or the
deletion of this proviso, in accordance with the requirements of
Section 13.01(e).</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
supplemental indenture which (x) changes or eliminates any covenant
or other provision of this Indenture which has expressly been
included solely for the benefit of the Holders of, or which is to
remain in effect only so long as there shall be Outstanding, Bonds
of one or more specified series, or one or more Tranches thereof,
or (y) modifies the rights of the Holders of Bonds of such series
or Tranches with respect to such covenant or other provision, shall
be deemed not to affect the rights under this Indenture of the
Holders of Bonds of any other series or Tranche.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It
shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance
thereof.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Anything
in this Indenture to the contrary notwithstanding, if the
Officer&rsquo;s Certificate, supplemental indenture or Board
Resolution, as the case may be, establishing the Bonds of any
series or Tranche shall provide that the Company may make certain
specified additions, changes or eliminations to or from this
Indenture which shall be specified in such Officer&rsquo;s
Certificate, supplemental indenture or Board Resolution
establishing such series or Tranche, (a) the Holders of Bonds of
such series or Tranche shall be deemed to have consented to a
supplemental indenture containing such additions, changes or
eliminations to or from this Indenture which shall be specified in
such Officer&rsquo;s Certificate, supplemental indenture or Board
Resolution establishing such series or Tranche, (b) no Act of such
Holders shall be required to evidence such consent and (c) such
consent may be counted in the determination of whether or not the
Holders of the requisite principal amount of Bonds shall have
consented to such supplemental indenture.</font></p>

<p><a name="_Toc101868367"><b><font size="3" face=
"Times New Roman">SECTION
13.03.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Execution of Supplemental
Indentures</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, and (subject to Section
10.01) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture.&nbsp; The Trustee
may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee&rsquo;s own
rights, duties, immunities or liabilities under this Indenture or
otherwise.</font></p>

<p><a name="_Toc101868368"><b><font size="3" face=
"Times New Roman">SECTION
13.04.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Effect of Supplemental
Indentures</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the execution and delivery of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith,
and such supplemental indenture shall form a part of this Indenture
for all purposes; and every Holder of Bonds theretofore or
thereafter authenticated and delivered hereunder shall be bound
thereby.&nbsp; Any supplemental indenture permitted by this Article
may restate this Indenture in its entirety, and, upon the execution
and delivery thereof, any such restatement shall supersede this
Indenture as theretofore in effect for all purposes.</font></p>

<p><a name="_Toc101868369"><b><font size="3" face=
"Times New Roman">SECTION
13.05.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Conformity With Trust
Indenture Act</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Every
supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.</font></p>

<p><a name="_Toc101868370"><b><font size="3" face=
"Times New Roman">SECTION
13.06.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Reference in Bonds to
Supplemental Indentures</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bonds
of any series, or any Tranche thereof, authenticated and delivered
after the execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a notation
in form approved by the Trustee as to any matter provided for in
such supplemental indenture.&nbsp; If the Company shall so
determine, new Bonds of any series, or any Tranche thereof, so
modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Bonds of such series or
Tranche.</font></p>

<p><a name="_Toc101868371"><b><font size="3" face=
"Times New Roman">SECTION
13.07.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Modification Without
Supplemental Indenture</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
the extent, if any, that the terms of any particular series of
Bonds shall have been established in or pursuant to a Board
Resolution or an Officer&rsquo;s Certificate pursuant to a
supplemental indenture or a Board Resolution as contemplated by
Section 3.01, and not in a supplemental indenture, additions to,
changes in or the elimination of any of such terms may be effected
by means of a supplemental Board Resolution or a supplemental
Officer&rsquo;s Certificate, as the case may be, delivered to, and
accepted by, the Trustee; provided, however, that such supplemental
Board Resolution or supplemental Officer&rsquo;s Certificate shall
not be accepted by the Trustee or otherwise be effective unless all
conditions set forth in this Indenture which would be required to
be satisfied if such additions, changes or elimination were
contained in a supplemental indenture shall have been appropriately
satisfied.&nbsp; Upon the acceptance thereof by the Trustee, any
such supplemental Board Resolution or supplemental Officer&rsquo;s
Certificate shall be deemed to be a &ldquo;supplemental
indenture&rdquo; for purposes of Section 13.04 and
13.06.</font></p>

<p align="center"><a name="_Toc101868372"><font size="3" face=
"Times New Roman"><br />
<b>ARTICLE XIV</b><br />
<br />
<b>MEETINGS OF HOLDERS; ACTION WITHOUT MEETING</b></font></a></p>

<p><a name="_Toc101868373"><b><font size="3" face=
"Times New Roman">SECTION
14.01.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Purposes for Which Meetings
May Be Called</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
meeting of Holders of Bonds of one or more, or all, series, or any
Tranche or Tranches thereof, may be called at any time and from
time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be made, given or
taken by Holders of Bonds of such series or Tranches.</font></p>

<p><a name="_Toc101868374"><b><font size="3" face=
"Times New Roman">SECTION
14.02.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Call, Notice and Place of
Meetings</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Trustee may at any time call a meeting of Holders of Bonds of one
or more, or all, series, or any Tranche or Tranches thereof, for
any purpose specified in Section 14.01, to be held at such time and
(except as provided in subsection (b) of this Section) at such
place as the Trustee shall determine with the approval of the
Company.&nbsp; Notice of every such meeting, setting forth the time
and the place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be given, in the manner
provided in Section 1.06, not less than twenty-one (21) nor more
than one hundred eighty (180) days prior to the date fixed for the
meeting.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Trustee may be asked to call a meeting of the Holders of Bonds of
one or more, or all, series, or any Tranche or Tranches thereof, by
the Company or by the Holders of at least twenty-five percent (25%)
in aggregate principal amount of all of such series and Tranches,
considered as one class, for any purpose specified in Section
14.01, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting.&nbsp; If the Trustee
shall have been asked by the Company to call such a meeting, the
Company shall determine the time and place for such meeting and may
call such meeting by giving notice thereof in the manner provided
in subsection (a) of this Section, or shall direct the Trustee, in
the name and at the expense of the Company, to give such
notice.&nbsp; If the Trustee shall have been asked to call such a
meeting by Holders in accordance with this subsection (b), and the
Trustee shall not have given the notice of such meeting within
twenty-one (21) days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided
herein, then the Holders of Bonds of such series and Tranches, in
the principal amount above specified, may determine the time and
the place for such meeting, such place to be approved by the
Company, and may call such meeting for such purposes by giving
notice thereof as provided in subsection (a) of this
Section.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
meeting of Holders of Bonds of one or more, or all, series, or any
Tranche or Tranches thereof, shall be valid without notice if the
Holders of all Outstanding Bonds of such series or Tranches are
present in person or by proxy and if representatives of the Company
and the Trustee are present, or if notice is waived in writing
before or after the meeting by the Holders of all Outstanding Bonds
of such series, or any Tranche or Tranches thereof, or by such of
them as are not present at the meeting in person or by proxy, and
by the Company and the Trustee.</font></p>

<p><a name="_Toc101868375"><b><font size="3" face=
"Times New Roman">SECTION
14.03.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Persons Entitled to Vote at
Meetings</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
be entitled to vote at any meeting of Holders of Bonds of one or
more, or all, series, or any Tranche or Tranches thereof, a Person
shall be (a) a Holder of one or more Outstanding Bonds of such
series or Tranches or (b) a Person appointed by an instrument in
writing as proxy for a Holder or Holders of one or more Outstanding
Bonds of such series or Tranches by such Holder or Holders.&nbsp;
The only Persons who shall be entitled to attend any meeting of
Holders of Bonds of any series or Tranche shall be the Persons
entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.</font></p>

<p><a name="_Toc101868376"><b><font size="3" face=
"Times New Roman">SECTION
14.04.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Quorum;
Action</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Persons entitled to vote a majority in aggregate principal amount
of the Outstanding Bonds of the series and Tranches with respect to
which a meeting shall have been called as hereinbefore provided,
considered as one class, shall constitute a quorum for a meeting of
Holders of Bonds of such series and Tranches; provided, however,
that if any action is to be taken at such meeting which this
Indenture expressly provides may be taken by the Holders of a
specified percentage, which is less than a majority, in principal
amount of the Outstanding Bonds of such series and Tranches,
considered as one class, the Persons entitled to vote such
specified percentage in principal amount of the Outstanding Bonds
of such series and Tranches, considered as one class, shall
constitute a quorum.&nbsp; In the absence of a quorum within one
hour of the time appointed for any such meeting, the meeting shall,
if convened at the request of Holders of Bonds of such series and
Tranches, be dissolved.&nbsp; In any other case the meeting may be
adjourned for such period as may be determined by the chairman of
the meeting prior to the adjournment of such meeting.&nbsp; In the
absence of a quorum at any such adjourned meeting, such adjourned
meeting may be further adjourned for such period as may be
determined by the chairman of the meeting prior to the adjournment
of such adjourned meeting.&nbsp; Except as provided by Section
14.05(e), notice of the reconvening of any meeting adjourned for
more than thirty (30) days shall be given as provided in Section
1.06 not less than ten (10) days prior to the date on which the
meeting is scheduled to be reconvened.&nbsp; Notice of the
reconvening of an adjourned meeting shall state expressly the
percentage, as provided above, of the principal amount of the
Outstanding Bonds of such series and Tranches which shall
constitute a quorum.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as limited by Section 13.02, any resolution presented to a meeting
or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the
Holders of not less than a majority in aggregate principal amount
of the Outstanding Bonds of the series and Tranches with respect to
which such meeting shall have been called, considered as one class;
provided, however, that, except as so limited, any resolution with
respect to any action which this Indenture expressly provides may
be taken by the Holders of a specified percentage, which is less
than a majority, in principal amount of the Outstanding Bonds of
such series and Tranches, considered as one class, may be adopted
at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the
Holders of such specified percentage in principal amount of the
Outstanding Bonds of such series and Tranches, considered as one
class.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
resolution passed or decision taken at any meeting of Holders of
Bonds duly held in accordance with this Section shall be binding on
all the Holders of Bonds of the series and Tranches with respect to
which such meeting shall have been held, whether or not present or
represented at the meeting.</font></p>

<p><a name="_Toc101868377"><b><font size="3" face=
"Times New Roman">SECTION
14.05.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Attendance at Meetings;
Determination of Voting Rights; Conduct and Adjournment of
Meetings</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attendance
at meetings of Holders of Bonds may be in person or by proxy; and,
to the extent permitted by law, any such proxy shall remain in
effect and be binding upon any future Holder of the Bonds with
respect to which it was given unless and until specifically revoked
by the Holder or future Holder (except as provided in Section
1.04(g)) of such Bonds before being voted.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
any other provisions of this Indenture, the Trustee may make such
reasonable regulations as it may deem advisable for any meeting of
Holders of Bonds in regard to proof of the holding of such Bonds
and of the appointment of proxies and in regard to the appointment
and duties of inspectors of votes, the submission and examination
of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it
shall deem appropriate.&nbsp; Except as otherwise permitted or
required by any such regulations and approved by the Company, the
holding of Bonds shall be proved in the manner specified in Section
1.04 and the appointment of any proxy shall be proved in the manner
specified in Section 1.04.&nbsp; Such regulations may provide that
written instruments appointing proxies, regular on their face, may
be presumed valid and genuine without the proof specified in
Section 1.04 or other proof.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called
by the Company or by Holders as provided in Section 14.02(b), in
which case the Company or the Holders of Bonds of the series and
Tranches calling the meeting, as the case may be, shall in like
manner appoint a temporary chairman.&nbsp; A permanent chairman and
a permanent secretary of the meeting shall be elected by vote of
the Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Bonds of all series and Tranches
represented at the meeting, considered as one class.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
any meeting each Holder or proxy shall be entitled to one vote for
each One Thousand Dollars ($1,000) principal amount of Outstanding
Bonds held or represented by such Holder; provided, however, that
no vote shall be cast or counted at any meeting in respect of any
Bond challenged as not Outstanding and ruled by the chairman of the
meeting to be not Outstanding.&nbsp; The chairman of the meeting
shall have no right to vote, except as a Holder of a Bond or
proxy.</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
meeting duly called pursuant to Section 14.02 at which a quorum is
present may be adjourned from time to time by Persons entitled to
vote a majority in aggregate principal amount of the Outstanding
Bonds of all series and Tranches represented at the meeting,
considered as one class; and the meeting may be held as so
adjourned without further notice.</font></p>

<p><a name="_Toc101868378"><b><font size="3" face=
"Times New Roman">SECTION
14.06.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Counting Votes and Recording
Action of Meetings</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
vote upon any resolution submitted to any meeting of Holders shall
be by written ballots on which shall be subscribed the signatures
of the Holders or of their representatives by proxy and the
principal amounts and serial numbers of the Outstanding Bonds, of
the series and Tranches with respect to which the meeting shall
have been called, held or represented by them.&nbsp; The permanent
chairman of the meeting shall appoint two (2) inspectors of votes
who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the
meeting their verified written reports of all votes cast at the
meeting.&nbsp; A record in duplicate of the proceedings of each
meeting of Holders shall be prepared by the secretary of the
meeting and there shall be attached to such record the original
reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of
the facts setting forth a copy of the notice of the meeting and
showing that such notice was given as provided in Section 14.02
and, if applicable, Section 14.04.&nbsp; Each copy shall be signed
and verified by the affidavits of the permanent chairman and
secretary of the meeting and one such copy shall be delivered to
the Company, and another to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at
the meeting.&nbsp; Any record so signed and verified shall be
conclusive evidence of the matters therein stated.</font></p>

<p><a name="_Toc101868379"><b><font size="3" face=
"Times New Roman">SECTION
14.07.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Action Without
Meeting</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
lieu of a vote of Holders at a meeting as hereinbefore contemplated
in this Article, any request, demand, authorization, direction,
notice, consent, waiver or other action may be made, given or taken
by Holders by one or more written instruments as provided in
Section 1.04.</font></p>

<p align="center"><a name="_Toc101868380"><font size="3" face=
"Times New Roman"><br />
<b>ARTICLE XV</b><br />
<br />
<b>IMMUNITY OF INCORPORATORS, STOCKHOLDERS,<br />
OFFICERS AND DIRECTORS</b></font></a></p>

<p><a name="_Toc101868381"><b><font size="3" face=
"Times New Roman">SECTION
15.01.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Liability Solely
Corporate</u></font></b></a><b><u>.</u></b></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
recourse shall be had for the payment of the principal of or
premium, if any, or interest, if any, on any Bonds, or any part
thereof, or for any claim based thereon or otherwise in respect
thereof, or of the indebtedness represented thereby, or upon any
obligation, covenant or agreement under this Indenture, against any
incorporator, stockholder, officer or director, as such, past,
present or future, of the Company or of any predecessor or
successor corporation (either directly or through the Company or a
predecessor or successor corporation), whether by virtue of any
constitutional provision, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise; it being
expressly agreed and understood that this Indenture and all the
Bonds are solely corporate obligations and that no personal
liability whatsoever shall attach to, or be incurred by, any
incorporator, stockholder, member, officer or director, past,
present or future, of the Company or of any predecessor or
successor corporation, either directly or indirectly through the
Company or any predecessor or successor corporation, because of the
indebtedness hereby authorized or under or by reason of any of the
obligations, covenants or agreements contained in this Indenture or
in any of the Bonds or to be implied herefrom or therefrom; and
such personal liability, if any, is hereby expressly waived and
released as a condition of, and as part of the consideration for,
the execution and delivery of this Indenture and the issuance of
the Bonds.</font></p>

<p align="center"><font size="3" face=
"Times New Roman">_________________________</font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same
instrument.</font></p>

<p align="center"><font size="3" face="Times New Roman">[Signature
Page Follows]</font></p>

<div align="center"><font size="3" face="Times New Roman"></font>
<hr size="2" width="100%" align="center" />
</div>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above
written.</font></p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p><b><font size="3" face=
"Times New Roman">&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></b></p>
</td>
<td valign="top">
<p><b><font size="3" face="Times New Roman">PACIFIC GAS AND
ELECTRIC COMPANY</font></b>,</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">as Issuer</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">By:
<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KENT M.
HARVEY&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Kent M.
Harvey</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Senior
Vice President -</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chief
Financial Officer and Treasurer</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><b><font size="3" face="Times New Roman">THE BANK OF NEW YORK
TRUST COMPANY</font></b>, <b>N.A.,</b></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">as Trustee</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">By:
<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JOSPEHINE
LIBUNAO&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">Name:&nbsp;&nbsp;&nbsp;Josephine Libunao<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Vice President</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>
</div>
</body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>q105_ex10-1.htm
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
<html>
<head>
<title></title>
</head>
<body link="blue" vlink="purple">
<div>
<p align="right"><b>Exhibit 10.1</b></p>

<p align="right"><b>EXECUTION COPY</b></p>

<p>&nbsp; GOLDMAN SACHS &amp; CO. | 85 BROAD STREET | NEW YORK, NEW
YORK 10004 | TEL:&nbsp; 212-902-1000</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p><b>To:</b></p>
</td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>PG&amp;E Corporation<br />
 One Market Spear Tower<br />
 Suite 2400<br />
 San Francisco, CA 94105<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top">
<p><b>From:</b></p>
</td>
<td valign="top"></td>
<td valign="top">
<p>Goldman, Sachs &amp; Co.<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top">
<p><b>Subject:</b></p>
</td>
<td valign="top"></td>
<td valign="top">
<p>Accelerated Share Repurchase Transaction - VWAP Pricing
(Non-Collared)<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top">
<p><b>Ref. No:</b></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><b>EN50BJ000000000<br />
</b> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top">
<p><b>Date:</b></p>
</td>
<td valign="top"></td>
<td valign="top">
<p>March 4, 2005<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>
</table>

<div></div>

<p><a name=
"_DV_M21"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
master confirmation (&ldquo;Master Confirmation&rdquo;) dated as of
March 4, 2005, is intended to supplement the terms and provisions
of certain Transactions (each, a &ldquo;Transaction&rdquo;) entered
into from time to time between Goldman, Sachs &amp; Co.
(&ldquo;GS&amp;Co.&rdquo;) and PG&amp;E Corporation
(&ldquo;Counterparty&rdquo;).&nbsp; This Master Confirmation, taken
alone, is neither a commitment by either party to enter into any
Transaction nor evidence of a Transaction.&nbsp; The terms of any
particular Transaction shall be set forth in a Supplemental
Confirmation in the form of Annex A, which references this Master
Confirmation, in which event the terms and provisions of this
Master Confirmation shall be deemed to be incorporated into and
made a part of each such Supplemental Confirmation.&nbsp; This
Master Confirmation and each Supplemental Confirmation together
shall constitute a &ldquo;Confirmation&rdquo; as referred to in the
Agreement specified below.</p>

<p><a name=
"_DV_M22"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
definitions and provisions contained in the 2002 ISDA Equity
Derivatives Definitions (the &ldquo;Equity Definitions&rdquo;), as
published by the International Swaps and Derivatives Association,
Inc., are incorporated into this Master Confirmation.&nbsp; This
Master Confirmation and each Supplemental Confirmation evidences a
complete binding agreement between the Counterparty and GS&amp;Co.
as to the terms of each Transaction to which this Master
Confirmation and the related Supplemental Confirmation relates.<a
name="_DV_M23"></a></p>

<p><a name=
"_DV_M24"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This<a
 name="_DV_M25"></a> Master Confirmation and each Supplemental
Confirmation, together with all other documents referring to the <a
name="_DV_M26"></a>1992 ISDA Master Agreement (Multicurrency-Cross
Border) (the &ldquo;ISDA Form&rdquo; or the &ldquo;Agreement),<a
name="_DV_M28"></a> confirming Transactions entered into between
GS&amp;Co. and Counterparty, shall supplement, form a part of, and
be subject to the ISDA Form as if GS&amp;Co. and Counterparty had
executed the Agreement (but without any Schedule)<a name=
"_DV_M31"></a> except <a name="_DV_M32"></a>that the following
elections and modifications shall be made:<a name="_DV_M33"></a>
(i)&nbsp;the election of Loss and Second Method, New York law
(without regard to conflicts of law principles) as the governing
law and US Dollars (&ldquo;USD&rdquo;) as the Termination Currency,
(ii)&nbsp;the election that subparagraph&nbsp;(ii) of
Section&nbsp;2(c) will not apply to Transactions, (iii)&nbsp;the
replacement of the word &ldquo;third&rdquo; in the last line of
Section&nbsp;5(a)(i) with the word &ldquo;first&rdquo;, (iv) the
election that the &ldquo;Cross Default&rdquo; provisions of Section
5(a)(vi) shall apply to Counterparty, with a &ldquo;Threshold
Amount&rdquo; of USD <a name="_DV_M34"></a><a name="_DV_M35"></a>75
million, and (v) the replacement of clause (1) in Section 6(d)(i)
with the clause &ldquo;(1) showing in reasonable detail such
calculations and specifying any amount payable under Section 6(e)
(including, without limitation, providing all relevant quotations
and assumptions and specifying the methodologies used in sufficient
detail so as to enable the other party to replicate the
calculation)&rdquo;.&nbsp; Further, for purposes of determining
whether an Event of Default pursuant to Section 5(a)(vi) of the
Agreement has occurred, <a name="_DV_M36"></a>notwithstanding
anything to the contrary <a name="_DV_M37"></a>stated in that
provision, clause (1) of Section 5(a)(vi) will apply only to
Specified Indebtedness that is actually declared to be due and
payable before it would otherwise be due and payable under the
relevant agreement or instrument, and not to Specified Indebtedness
that is merely &ldquo;capable at such time of being declared&rdquo;
so due and payable.</p>

<p><a name=
"_DV_M39"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
provisions contained in the Agreement shall govern this Master
Confirmation and the related Supplemental Confirmation relating to
a Transaction except as expressly modified <a name=
"_DV_M40"></a>herein<a name="_DV_M41"></a> or in the related
Supplemental Confirmation.&nbsp; With respect to any relevant
Transaction, the Agreement, this Master Confirmation and the
related Supplemental Confirmation shall represent the entire
agreement and understanding of the parties with respect to the
subject matter and terms of such Transaction and shall supersede
all prior or contemporaneous written or oral communications with
respect thereto.</p>

<p><a name=
"_DV_M42"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If,
in relation to any Transaction to which this Master Confirmation
and related Supplemental Confirmation relate, there is any
inconsistency between the Agreement, this Master Confirmation, any
Supplemental Confirmation and the Equity Definitions that are
incorporated into this <a name="_DV_M43"></a>Master Confirmation or
<a name="_DV_M44"></a>any Supplemental Confirmation, the following
will prevail for purposes of such Transaction in the order of
precedence indicated: (i) such Supplemental Confirmation; (ii) this
Master Confirmation; (iii) the Agreement; and (iv) the Equity
Definitions.</p>

<p><a name=
"_DV_M45"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;Each
Transaction constitutes a Share Forward Transaction for the
purposes of the Equity Definitions.&nbsp; Set forth below are the
terms and conditions which, together with the terms and conditions
set forth in each Supplemental Confirmation (in respect of each
relevant Transaction), shall govern each such Transaction.</p>

<p>General Terms:</p>

<table border="0" cellspacing="0" cellpadding="0" width="755">
<tr>
<td valign="top" width="37">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a name=
"_DV_M46"></a></p>
</td>
<td valign="top" width="197">
<p>Trade Date:<a name="_DV_M47"></a></p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="473">
<p>For each Transaction, as set forth in the Supplemental
Confirmation.&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473"></td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>Seller:<a name="_DV_M48"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473">
<p>Counterparty&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473"></td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>Buyer:<a name="_DV_M49"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473">
<p>GS&amp;Co.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473"></td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>Shares:<a name="_DV_M50"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473">
<p>Common Stock of PG&amp;E Corp. (Ticker:
PCG)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473"></td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>Number of Shares:<a name="_DV_M51"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473">
<p>For each Transaction, as set forth in the Supplemental
Confirmation.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473"></td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>Forward Price:<a name="_DV_M52"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473">
<p>For each Transaction, as set forth in the Supplemental
Confirmation.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473"></td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>Prepayment:<a name="_DV_M53"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473">
<p>Not
Applicable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473"></td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>Variable Obligation:</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473">
<p>Not
Applicable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473"></td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>Exchange:<a name="_DV_M55"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473">
<p>New York Stock
Exchange&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473"></td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>Related Exchange(s):</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473">
<p>All
Exchanges&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="473"></td>
</tr>

<tr>
<td valign="top" width="37"></td>
<td valign="top" width="197">
<p>Market Disruption Event:<a name="_DV_M57"></a></p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="473">
<p>The definition of &ldquo;Market Disruption Event&rdquo; in
Section 6.3(a) of the Equity Definitions is hereby amended by
inserting the words &ldquo;at any time on any Scheduled Trading Day
during the Valuation Period or&rdquo; after the word
&ldquo;material,&rdquo; in the third line thereof.</p>
</td>
</tr>
</table>

<p>Valuation:</p>

<table border="0" cellspacing="0" cellpadding="0" width="792">
<tr>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="193">
<p>Valuation Period:<a name="_DV_M59"></a></p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="511">
<p>Each Scheduled Trading Day during the period commencing on and
including the Valuation Period Start Date to and including the
Valuation Date (but excluding any day(s) on which the Valuation
Period is suspended in accordance with Section 5 herein and
including any day(s) by which the Valuation Period is extended
pursuant to the provision
below).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="193">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="511"></td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="193"></td>
<td valign="top" width="40"><a name="_DV_M60"></a> </td>
<td valign="top" width="511">
<p>Notwithstanding anything to the contrary in the Equity
Definitions, to the extent that any Scheduled Trading Day in the
Valuation Period is a Disrupted Day, the Valuation Date shall be
postponed and the Calculation Agent in its sole discretion shall
extend the Valuation Period and make adjustments to the weighting
of each Relevant Price for purposes of determining the Settlement
Price, with such adjustments based on, among other factors, the
duration of any Market Disruption Event and the volume, historical
trading patterns and price of the Shares.&nbsp; To the extent that
there are 9 consecutive Disrupted Days during the Valuation Period,
then notwithstanding the occurrence of a Disrupted Day, the
Calculation Agent shall have the option in its sole discretion to
either determine the Relevant Price using its good faith estimate
of the value for the Share on such 9<sup>th</sup> consecutive day
or elect to further extend the Valuation Period as it deems
necessary.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="193">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="511"></td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="193">
<p>Valuation Period Start Date:</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="511">
<p>For each Transaction, as set forth in the Supplemental
Confirmation.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="193">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="511"></td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="193">
<p>Valuation Date:<a name="_DV_M62"></a></p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="511">
<p>For each Transaction, as set forth in the Supplemental
Confirmation (as the same may be postponed in accordance with the
provisions of &ldquo;Valuation Period&rdquo; and Section 5
herein).</p>
</td>
</tr>
</table>

<p>Settlement Terms:</p>

<table border="0" cellspacing="0" cellpadding="0" width="755">
<tr>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="192">
<p>Settlement Currency:<a name="_DV_M64"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475">
<p>USD (all amounts shall be converted to the Settlement Currency
in good faith and in a commercially reasonable manner by the
Calculation
Agent).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475"></td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>Settlement Method Election:<a name="_DV_M65"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475">
<p>Applicable; provided that (a) Section&nbsp;7.1 of the Equity
Definitions is hereby amended by deleting the word
&ldquo;Physical&rdquo; in the sixth line thereof and replacing it
with the words &ldquo;Net Share&rdquo; and deleting the word
&ldquo;Physical&rdquo; in the last line thereof and replacing it
with word &ldquo;Cash&rdquo; and (b) in the event that GS&amp;Co.
would deliver to the Counterparty an amount of Shares under Net
Share Settlement, Cash Settlement shall be applicable in lieu of
Net Share
Settlement.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475"></td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>Electing Party:<a name="_DV_M66"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475">
<p>Counterparty&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475"></td>
</tr>

<tr>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="192">
<p>Settlement Method Election Date:<a name="_DV_M67"></a></p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="475">
<p>10 Scheduled Trading Days prior to the originally scheduled
Valuation Date.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475"></td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>Defau<a name="_DV_M68"></a>lt Settlement Method:</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475">
<p>Cash
Settlement&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475"></td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>Forward Cash Settlement Amount:<a name="_DV_M69"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475">
<p>An amount in the Settlement Currency equal to the product of
(a)&nbsp;the Number of Shares multiplied by (b) an amount equal to
(i) the Settlement Price minus (ii) the Forward
Price.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>Settlement Price:<a name="_DV_M70"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475">
<p>The arithmetic mean of the Relevant Prices of the Shares for
each Exchange Business Day in the Valuation
Period.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475"></td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>Relevant Price:<a name="_DV_M71"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475">
<p>The New York 10b-18 Volume Weighted Average Price per share of
the Shares for the regular trading session (including any
extensions thereof) of the Exchange on the related Exchange
Business Day (without regard to pre-open or after hours trading
outside of such regular trading session) as published by Bloomberg
at 4:15 p.m. New&nbsp;York time on such date.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475"></td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>Cash Settlement Payment Date:</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475">
<p>3 Currency Business Days after the Valuation
Date.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475"></td>
</tr>

<tr>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="192">
<p>Counterparty&rsquo;s Contact Details for Purpose of Giving
Notice:<a name="_DV_M73"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475">
<p>Nicholas Bijur<br />
 Assistant Treasurer<br />
 PG&amp;E Corporation<br />
 One Market Street, Spear Tower<br />
 Suite 2400<br />
 San Francisco, CA 94105<br />
 Telephone No.:&nbsp; (415) 817-8199<br />
 Facsimile No.:&nbsp; (415) 267-7265</p>
</td>
</tr>

<tr>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="192">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475"></td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192"></td>
<td valign="top" width="40"></td>
<td valign="top" width="475">
<p>With a copy to:<br />
 Gary Encinas<br />
 Chief Counsel-Corporate<br />
 PG&amp;E Corporation<br />
 One Market Street, Spear Tower<br />
 Suite 2400<br />
 San Francisco, CA 94105<br />
 Telephone No.:&nbsp; (415) 817-8201<br />
 Facsimile No.:&nbsp; (415) 817-8225</p>
</td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="475"></td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>GS&amp;Co.&rsquo;s Contact Details for Purpose of Giving
Notice:<a name="_DV_M75"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475">
<p><br />
 Telephone No.:&nbsp;&nbsp;(212) 902-8996<br />
 Facsimile No.:&nbsp;&nbsp;&nbsp;(212) 902-0112<br />
 Attention:&nbsp; Equity Operations:&nbsp; Options and
Derivatives</p>
</td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a name="_DV_M76"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="475"></td>
</tr>

<tr>
<td valign="top" width="40"></td>
<td valign="top" width="192"></td>
<td valign="top" width="40"><a name="_DV_M79"></a> </td>
<td valign="top" width="475">
<p>With a copy to:<br />
 Kelly Coffey<br />
 Equity Capital Markets<br />
 One New York Plaza<br />
 New York, NY 10004<br />
 Telephone No.:<br />
 (212) 902-1037<br />
 Facsimile No.:<br />
 (212) 346-2126<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>
</table>

<p>Net Share Settlement:</p>

<table border="0" cellspacing="0" cellpadding="0" width="764">
<tr>
<td valign="top" width="33">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="198">
<p>Net Share Settlement Procedures:<a name="_DV_M87"></a></p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="485">
<p>Net Share Settlement shall be made in accordance with the
procedures attached hereto as Annex
B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="485"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>Net Share Settlement Price:<a name="_DV_M88"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="485">
<p>The<a name="_DV_M90"></a><a name="_DV_M89"></a> Net Share
Settlement Price shall be the price per Share as of the Valuation
Time on the Net Share Valuation Date as reported in the official
real-time price dissemination mechanism for <a name=
"_DV_M91"></a>the Exchange.&nbsp; The<a name="_DV_M92"></a> Net
Share Settlement Price shall be reduced by the per Share amount of
the underwriting discount and/or commissions agreed to pursuant to
the equity underwriting <a name="_DV_M93"></a>or agency <a name=
"_DV_M94"></a>agreement contemplated by the Net Share Settlement
Procedures.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="485"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>Valuation Time:<a name="_DV_M96"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="485">
<p>As provided in Section 6.1 of the Equity Definitions; provided
that Section 6.1 of the Equity Definitions is hereby amended by
inserting the words &ldquo;Net Share,&rdquo; <a name=
"_DV_M98"></a>before the words &ldquo;Valuation Date&rdquo; in the
first and third lines
thereof.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="485"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>Net Share Valuation Date:<a name="_DV_M99"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="485">
<p>The Exchange Business Day immediately following the Valuation
Date.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="485"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>Net Share Settlement Date:<a name="_DV_M100"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="485">
<p>The third Exchange Business Day immediately following the
Valuation Date.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="485"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>Reserved Shares:<a name="_DV_M101"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="485">
<p>For each Transaction, as set forth in the Supplemental
Confirmation.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>
</table>

<p>Fixed, Floating and Counterparty<br />
Additional Payment Amounts Payable:</p>

<p>Floating Amount Payable by GS&amp;Co.:</p>

<table border="0" cellspacing="0" cellpadding="0" width="794">
<tr>
<td valign="top" width="33">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="198">
<p>Floating Amount Payment Date:</p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="515">
<p>The Cash Settlement Payment
Date&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="515"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>Floating Amount:<a name="_DV_M105"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="515">
<p>For each Transaction, an amount equal to the sum of the
applicable Federal Funds Rate multiplied by (i) the Daily Notional
Amount multiplied by (ii) 1/360 for each day from and including the
Floating Amount Accrual Date to and including the Valuation
Date.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>Floating Amount Accrual Date:</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="515">
<p>Trade Date&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="515"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>Federal Funds Rate:<a name="_DV_M108"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="515">
<p>For any date of determination, the &ldquo;Fed Funds Open
Rate,&rdquo; which shall be the interest rate reported on Bloomberg
under the symbol &ldquo;FEDSOPEN &lt;index&gt;&rdquo; on such
date.&nbsp; For the avoidance of doubt, for any day which is not a
Currency Business Day the &ldquo;Federal Funds Open Rate&rdquo; for
the immediately preceding Currency Business Day shall
apply.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="515"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>Daily Notional Amount:<a name="_DV_M109"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="515">
<p>Commencing with the Floating Amount Accrual Date, for any date
of determination, the Daily Notional Amount shall be an amount
equal to the product of the Initial Notional Amount (as set forth
in the Supplemental Confirmation) multiplied by a fraction with a
numerator equal to the Originally Scheduled Number of Scheduled
Trading Days in the Valuation Period minus the number of Exchange
Business Days in the Valuation Period that have elapsed (other than
any days during which the Valuation Period is suspended pursuant to
Section 5 herein) as of such date of determination and a
denominator equal to the Originally Scheduled Number of Scheduled
Trading Days in the Valuation Period (such fraction, the
&ldquo;Remaining
Percentage&rdquo;).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="515"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="198"></td>
<td valign="top" width="40"><a name="_DV_M110"></a> </td>
<td valign="top" width="515">
<p>To the extent that the Valuation Period is extended pursuant to
the terms of this Master Confirmation, the Calculation Agent shall
adjust the Daily Notional Amount commencing with the first Exchange
Business Day after such extension (the &ldquo;Valuation Period
Extension Date&rdquo;).&nbsp; The notional amount deemed to be
remaining at the end of the Exchange Business Day before the
Valuation Period Extension Date (the &ldquo;Remaining Notional
Value&rdquo;) shall be the Initial Notional Value multiplied by the
Remaining Percentage at the end of such day.&nbsp; Commencing with
the Valuation Period Extension Date, for any date of determination,
the Daily Notional Amount shall be equal to the product of the
Remaining Notional Value multiplied by a fraction with (a) a
numerator equal to (i) the number of Scheduled Trading Days
remaining from and including the Valuation Period Extension Date to
the Valuation Date after extension (the &ldquo;Remaining Scheduled
Trading Days&rdquo;) minus (ii) the number of Exchange Business
Days in the Valuation Period after extension from and including the
Valuation Period Extension Date that have elapsed (other than any
days during which the Valuation Period after extension is suspended
pursuant to Section 5 herein) as of such date of determination and
(b) a denominator equal to the Remaining Scheduled Trading
Days.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>
</table>

<p>Fixed Amount Payable by Counterparty:</p>

<table border="0" cellspacing="0" cellpadding="0" width="775">
<tr>
<td valign="top" width="33">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="195">
<p>Fixed Amount Payment Date:</p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="499">
<p>The Cash Settlement Payment
Date&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="195">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="499"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="195">
<p>Fixed Amount:<a name="_DV_M113"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="499">
<p>For each Transaction, an amount equal to the sum<a name=
"_DV_M114"></a> of (I)<a name="_DV_M115"></a> the applicable Daily
Additional Spread multiplied by (i) the <a name=
"_DV_M116"></a>Daily Notional Amount multiplied by
(ii)&nbsp;1/360<a name="_DV_M117"></a> for each day from and
including the Floating Amount Accrual Date to and including the
Valuation Date<a name="_DV_M118"></a> plus (II)<a name=
"_DV_M119"></a> an amount equal to the sum<a name="_DV_M120"></a>
of the applicable Fixed Rate<a name="_DV_M121"></a> multiplied by
(i) &nbsp;<a name="_DV_M122"></a>the Notional Amount multiplied by
(ii)&nbsp;<a name="_DV_M123"></a>1/360<a name="_DV_M125"></a> for
each day from and including the Floating Amount Accrual Date to and
including the Valuation
Date.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="195">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="499"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="195">
<p>Fixed Rate:<a name="_DV_M127"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="499">
<p>For each Transaction, as set forth in the Supplemental
Confirmation.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="195">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="499"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="195">
<p>Daily Additional Spread:<a name="_DV_M128"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="499">
<p>The Additional Spread shall be <a name="_DV_M129"></a>25 basis
points<a name="_DV_M130"></a>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="195">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="499"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="195">
<p>Notional Amount:<a name="_DV_M131"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="499">
<p>For any date of determination, 105% of the Daily Notional
Amount.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="195">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="499"></td>
</tr>
</table>

<p>Counterparty Additional Amount<br />
Payable by Company:</p>

<table border="0" cellspacing="0" cellpadding="0" width="658">
<tr>
<td valign="top" width="33">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="197">
<p>Counterparty Additional Payment Amount:</p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="380">
<p>For each Transaction, as set forth in the Supplemental
Confirmation.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="197">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="380"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="197">
<p>Counterparty Additional Payment Date:</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="380">
<p>The Cash Settlement Payment
Date.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>
</table>

<p>Settlement Terms for Fixed Amount and<br />
Counterparty Additional Payment Amount:</p>

<table border="0" cellspacing="0" cellpadding="0" width="754">
<tr>
<td valign="top" width="33">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="195">
<p>Settlement Currency</p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="478">
<p>USD (all amounts shall be converted to the Settlement Currency
in good faith and in a commercially reasonable manner by the
Calculation
Agent).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="195">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="478"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="195">
<p>Settlement Method Election:</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="478">
<p>Applicable; provided that Section&nbsp;7.1 of the Equity
Definitions is hereby amended by deleting the word
&ldquo;Physical&rdquo; in the sixth line thereof and replacing it
with the words &ldquo;Net Share&rdquo; and deleting the word
&ldquo;Physical&rdquo; in the last line thereof and replacing it
with the word
&ldquo;Cash&rdquo;.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="195">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="478"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="195">
<p>Electing Party:<a name="_DV_M135"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="478">
<p>Counterparty&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="195">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="478"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="195">
<p>Settlement Method Election Date:<a name="_DV_M136"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="478">
<p>10 Scheduled Trading Days prior to the originally scheduled
Valuation Date.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="195">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="478"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="195">
<p>Default Settlement Method:<a name="_DV_M137"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="478">
<p>Cash
Settlement&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>
</table>

<p>Share Adjustments:</p>

<table border="0" cellspacing="0" cellpadding="0" width="487">
<tr>
<td valign="top" width="32">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="195">
<p>Method of Adjustment:</p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="212">
<p>Calculation Agent
Adjustment&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>
</table>

<p>Extraordinary Events:</p>

<p>Consequences of Merger
Events:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to Section 7(b) of the Master Confirmation:</p>

<table border="0" cellspacing="0" cellpadding="0" width="680">
<tr>
<td valign="top" width="33">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="194">
<p>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-for-Share:</p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="405">
<p>Modified Calculation Agent Adjustment</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="405"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-for-Other:</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="405">
<p>Cancellation and Payment on that portion of the Other
Consideration that consists of cash; Modified Calculation Agent
Adjustment on the remainder of the Other Consideration.</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="405"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-for-Combined:</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="405">
<p>Component
Adjustment&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="405"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>Determining Party:<a name="_DV_M145"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="405">
<p>GS&amp;Co.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>
</table>

<p>Tender
Offer:&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;Applicable</p>

<p>Consequences of Tender
Offers:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to Section 7(b) of the Master Confirmation:</p>

<table border="0" cellspacing="0" cellpadding="0" width="682">
<tr>
<td valign="top" width="33">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="194">
<p>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-for-Share:<a name=
"_DV_M148"></a></p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="407">
<p>Modified Calculation Agent
Adjustment&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="407"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sha<a name=
"_DV_M149"></a>re-for-Other:</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="407">
<p>Cancellation and Payment on that portion of the Other
Consideration that consists of cash; Modified Calculation Agent
Adjustment on the remainder of the Other
Consideration.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="407"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-for-Combined:</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="407">
<p>Component
Adjustment&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="407"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>Determining Party:<a name="_DV_M151"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="407">
<p>GS&amp;Co.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="407"></td>
</tr>

<tr>
<td colspan="2" valign="top" width="229">
<p>Nationalization, Insolvency or Delisting:<a name=
"_DV_M152"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="407">
<p>Subject to Section 7(a) of this Master Confirmation, Negotiated
Close-out; provided that in addition to the provisions of Section
12.6(a)(iii) of the Equity Definitions, it shall also constitute a
Delisting if the Exchange is located in the United States and the
Shares are not immediately re-listed, re-traded or re-quoted on any
of the New York Stock Exchange, the American Stock Exchange or The
NASDAQ National Market (or their respective successors); if the
Shares are immediately re-listed, re-traded or re-quoted on any
such exchange or quotation system, such exchange or quotation
system shall be deemed to be the
Exchange.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br />
 </p>
</td>
</tr>
</table>

<p>Additional Disruption Events:</p>

<table border="0" cellspacing="0" cellpadding="0" width="723">
<tr>
<td valign="top" width="33">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="194">
<p>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in Law:<a name=
"_DV_M154"></a></p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="448">
<p>Applicable; provided that Section 12.9(a)(ii)(Y) of the Equity
Definitions is hereby
deleted.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Failure to Deliver:<a name=
"_DV_M155"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448">
<p>Not
Applicable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>(c)&nbsp;&nbsp;<a name=
"_DV_M156"></a>&nbsp;&nbsp;&nbsp;Insolvency Filing:</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448">
<p>Applicable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss of Stock Borrow:<a name=
"_DV_M157"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448">
<p>Applicable; provided that Loss of Stock Borrow shall not
constitute an Additional Disruption Event so long as Counterparty
agrees to pay the Hedging Party the amount by which the stock loan
rate necessary to maintain a borrowing of Shares by GS&amp;Co.
(&ldquo;Hedge Position&rdquo;) in connection with the Transaction
exceeds the Maximum Stock Loan
Rate.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>Maximum Stock Loan Rate</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448">
<p>30 basis
points&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hedging Disruption:<a name=
"_DV_M160"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448">
<p>Not
Applicable.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increased Cost of Hedging:<a
name="_DV_M161"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448">
<p>Not
Applicable.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increased Cost of Stock
Borrow:&nbsp; <a name="_DV_M162"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448">
<p>Not
Applicable.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>Hedging Party:<a name="_DV_M163"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448">
<p>GS&amp;Co.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>Determining Party:<a name="_DV_M164"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448">
<p>GS&amp;Co.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448"></td>
</tr>

<tr>
<td colspan="2" valign="top" width="229">
<p>Non-Reliance:<a name="_DV_M165"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448">
<p>Applicable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="229">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448"></td>
</tr>

<tr>
<td colspan="2" valign="top" width="229">
<p>Agreements and Acknowledgements Regarding Hedging Activities:<a
name="_DV_M166"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448">
<p>Applicable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="229">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="448"></td>
</tr>

<tr>
<td valign="top" width="33">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="194">
<p>Additional Acknowledgements:<a name="_DV_M168"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448">
<p>Applicable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>Net Share Settlement following Extraordinary<a name=
"_DV_M170"></a><a name="_DV_M169"></a> Event:</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448">
<p>Counterparty shall have the right, in its sole discretion, to
make any payment required to be made by it pursuant to
Sections&nbsp;12.7 or 12.9 of the Equity Definitions (except with
respect to any portion of the consideration for the Shares
consisting of cash in the event of a Merger Event or Tender Offer)
following the occurrence of an Extraordinary Event by electing to
Net Share Settle the Transactions under this Master Confirmation in
accordance with the terms, and subject to the conditions, for Net
Share Settlement herein by giving written notice to GS&amp;Co. of
such election on the day that the notice fixing the date that the
Transactions are terminated or cancelled, as the case may be, (the
&ldquo;Cancellation Date&rdquo;) pursuant to the applicable
provisions of Section 12 of the Equity Definitions is
effective.&nbsp; If Counterparty elects Net Share Settlement:
(a)&nbsp;the Net Share Valuation Date shall be the date specified
in the notice fixing the date that the Transactions are terminated
or cancelled, as the case may be; provided that the Net Share
Valuation Date shall be either the&nbsp; Exchange Business Day that
such notice is effective or the first Exchange Business Day
immediately following the Exchange Business Day that such notice is
effective, (b) the Net Share Settlement Date shall be deemed to be
the Exchange Business Day immediately following the Cancellation
Date and (c) all references to the Forward Cash Settlement Amount<a
name="_DV_M171"></a>, the Fixed Amount and the Counterparty
Additional Payment Amount, as the case may be, in Annex B hereto
shall be deemed to be references to the Cancellation Amount. <a
name="_DV_M172"></a><a name="_DV_M173"></a>&nbsp; The definition of
&ldquo;Cancellation Amount&rdquo; in Section 12.8 of the Equity
Definitions is hereby amended by inserting the following paragraph:
&ldquo;(h) The Determining Party shall show the other party in
reasonable detail its calculation of the Cancellation Amount,
including without limitation providing all relevant quotations and
assumptions and specifying the methodologies used in sufficient
detail so as to enable the other party to replicate the
calculation&rdquo;.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>Net Share Settlement Upon<a name="_DV_M175"></a><a name=
"_DV_M174"></a> Early Termination:</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448">
<p>Counterparty shall have the right, in its sole discretion, to
make any payment required to be made by it (the &ldquo;Early
Termination Amount&rdquo;) pursuant to Sections&nbsp;6(d) and 6(e)
of the Agreement following the occurrence of an Early Termination
Date in respect of the Agreement by electing to Net Share Settle
all the Transactions under this Master Confirmation in accordance
with the terms, and subject to the conditions, for Net Share
Settlement herein by giving written notice to GS&amp;Co. of such
election on the day that the notice fixing an Early Termination
Date is effective.&nbsp; If Counterparty elects Net Share
Settlement:&nbsp;(a) the Net Share Valuation Date shall be the date
specified in the notice fixing an Early Termination Date; provided
that the Net Share Valuation Date shall be either the Exchange
Business Day that such notice is effective or the first Exchange
Business Day immediately following the Exchange Business Day that
such notice is effective, (b) the Net Share Settlement Date shall
be deemed to be the Exchange Business Day immediately following the
Early Termination Date <a name="_DV_M176"></a>(except for an Early
Termination as a result of Section 7(d), in which event the Net
Share Settlement Date shall be deemed to be the tenth Exchange
Business Day following the Early Termination Date) <a name=
"_DV_M177"></a>and (c) all references to Forward Cash Settlement
Amount<a name="_DV_M178"></a>, the Fixed<a name="_DV_M179"></a>
Amount and the Counterparty Additional Payment Amount, as the case
may be, in Annex B hereto shall be deemed references to the Early
Termination Amount.&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="448"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>Transfer:<a name="_DV_M180"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448">
<p>Notwithstanding anything to the contrary in the Agreement,
GS&amp;Co. may assign, transfer and set over all rights, title and
interest, powers, privileges and remedies of GS&amp;Co. under any
Transaction, in whole or in part, to an affiliate of GS&amp;Co.
that is fully and unconditionally guaranteed by The Goldman Sachs
Group, Inc. without the consent of Counterparty, provided that
Counterparty is not required to make a payment to GS&amp;Co. in
respect of an Indemnifiable Tax as a result of such
transfer.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>GS&amp;Co. Payment Instructions:<a name="_DV_M181"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448">
<p>Chase Manhattan Bank New York<br />
 For A/C Goldman, Sachs &amp; Co.<br />
 A/C # 930-1-011483<br />
 ABA:&nbsp; 021-000021<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448"></td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>Counterparty Payment Instructions:<a name="_DV_M182"></a></p>
</td>
<td valign="top" width="40"></td>
<td valign="top" width="448">
<p>PG&amp;E Corporation Master Account No. 099023<br />
 Mellon Trust of New England, N.A.<br />
 Boston, MA<br />
 ABA Routing No: 011001234<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="33"></td>
<td valign="top" width="194">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="40">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="448"></td>
</tr>
</table>

<p><a name=
"_DV_M184"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;<u>
Calculation Agent</u>:&nbsp; GS&amp;Co.</p>

<p><a name=
"_DV_M185"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;<u>
Representations, Warranties and Covenants of GS&amp;Co. and
Counterparty</u>.<u>&nbsp;</u></p>

<p><a name=
"_DV_M186"></a>&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;(a)&nbsp;&nbsp;Each
party represents and warrants that it (i) is an &ldquo;eligible
contract participant&rdquo;, as defined in the U.S. Commodity
Exchange Act, as amended and (ii) is entering into each Transaction
hereunder as principal (and not as agent or in any other capacity,
fiduciary or otherwise) and not for the benefit of any third
party.</p>

<p><a name=
"_DV_M187"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Each
party acknowledges that the offer and sale of each <a name=
"_DV_M188"></a>Share Forward <a name="_DV_M189"></a>Transaction to
it is intended to be exempt from registration under the Securities
Act of 1933, as amended (the &ldquo;Securities Act&rdquo;), by
virtue of Section 4(2) thereof and the provisions of Regulation D
promulgated thereunder (&ldquo;Regulation D&rdquo;); and this
acknowledgement shall not be deemed to extend to Settlement Shares
or Early Settlement Shares.&nbsp; Accordingly, each party
represents and warrants to the other that (i) it has the financial
ability to bear the economic risk of its investment in each <a
name="_DV_M192"></a>Share Forward <a name=
"_DV_M193"></a>Transaction and is able to bear a total loss of its
investment, (ii)&nbsp;it is an &ldquo;accredited investor&rdquo; as
that term is defined under Regulation D, (iii) it will purchase
each <a name="_DV_M194"></a>Share Forward <a name=
"_DV_M195"></a>Transaction for investment and not with a view to
the distribution or resale thereof, and (iv) the disposition of
each<a name="_DV_M196"></a> Share Forward<a name="_DV_M197"></a>
Transaction is restricted under this Master Confirmation and each
Supplemental Confirmation, the Securities Act and state securities
laws.</p>

<p><a name=
"_DV_M198"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;<u>
Additional Representations, Warranties and Covenants of
Counterparty.</u></p>

<p><a name="_DV_M199"></a>&nbsp;As of the date hereof and the date
of each Supplemental Confirmation, Counterparty represents,
warrants and covenants to GS&amp;Co. that:</p>

<p><a name=
"_DV_M200"></a>&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;(a)&nbsp;&nbsp;the
purchase or writing of each Transaction will not violate
Rule&nbsp;13e-1 or Rule&nbsp;13e-4 under the Securities Exchange
Act of 1934, as amended (the &ldquo;Exchange Act&rdquo;);</p>

<p><a name=
"_DV_M201"></a>&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;(b)&nbsp;&nbsp;is
not entering into any Transaction on the basis of, and is not aware
of, any material non-public information with respect to the Shares
or in anticipation of, in connection with, or to facilitate, a
distribution of its securities, a self tender offer or a
third-party tender offer;</p>

<p><a name=
"_DV_M202"></a>&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;(c)&nbsp;&nbsp;it
is not entering into any Transaction to create, and will not engage
in any other securities or derivative transaction to create, a
false or misleading appearance of active trading or market activity
in the Shares (or any security convertible into or exchangeable for
the Shares), or which would otherwise violate the Exchange Act;</p>

<p><a name=
"_DV_M203"></a>&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;(d)&nbsp;&nbsp;Counterparty
is in compliance with its reporting obligations under the Exchange
Act and its most recent Annual Report on Form 10-K, together with
all reports subsequently filed by it pursuant to the Exchange Act,
taken together and as amended and supplemented to the date of this
representation, do not, as of their respective filing dates,
contain any untrue statement of a material fact or omit any
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances in which
they were made, not misleading;</p>

<p><a name=
"_DV_M204"></a>&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;(e)&nbsp;&nbsp;each
Transaction is being entered into pursuant to a publicly disclosed
Share buy-back program and its Board of Directors has approved the
use of the Transaction to effect the Share buy-back program;</p>

<p><a name=
"_DV_M205"></a>&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;(f)&nbsp;&nbsp;notwithstanding
the generality of Section 13.1 of the Equity Definitions,
GS&amp;Co. is not making any representations or warranties with
respect to the treatment of any Transaction under FASB Statements
149 or 150, EITF 00-19 (or any successor issue statements) or under
FASB&rsquo;s Liabilities &amp; Equity Project;</p>

<p><a name=
"_DV_M206"></a>&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;(g)&nbsp;&nbsp;it
has not, and during any Valuation Period (as extended pursuant to
the provisions of Section &nbsp;<a name="_DV_M207"></a>5 and
&ldquo;Valuation Period&rdquo; herein) will not, enter into
agreements similar to the Transactions described herein <a name=
"_DV_M208"></a>except with GS&amp;Co. or an entity affiliated with
GS&amp;Co. <a name="_DV_M209"></a>where the valuation period in
such other transaction will overlap at any time (including as a
result of extensions in such valuation period as provided in the
relevant agreements) with any Valuation Period (as extended
pursuant to the provisions of Section 5 and &ldquo;Valuation
Period&rdquo; herein) under this Master Confirmation.&nbsp; In the
event that the valuation period in any other similar transaction <a
name="_DV_M210"></a>with an entity other than GS&amp;Co. or an
entity affiliated with GS&amp;Co. <a name="_DV_M211"></a>overlaps
with any Valuation Period under this Master Confirmation as a
result of any extension made pursuant to the provisions of Section
5 and &ldquo;Valuation Period&rdquo; herein, Counterparty shall
promptly amend such transaction to avoid any such overlap;<a name=
"_DV_M212"></a> and</p>

<p><a name=
"_DV_M213"></a>&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;(h)&nbsp;&nbsp;it
shall report each Transaction as required under <a name=
"_DV_M214"></a>the Exchange Act<a name="_DV_M215"></a> and the
regulations promulgated thereunder.<a name="_DV_M216"></a></p>

<p><a name=
"_DV_M217"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;<u>
Suspension of Valuation Period; Extension of Valuation
Period</u>.&nbsp;</p>

<p><a name=
"_DV_M218"></a>&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;(a)&nbsp;&nbsp;If
Counterparty concludes that it will be engaged in a distribution of
the Shares for purposes of Regulation M promulgated under the
Exchange Act (&ldquo;Regulation M&rdquo;), Counterparty agrees that
it will, on one Scheduled Trading Day&rsquo;s written notice,
direct GS&amp;Co. not to purchase Shares in connection with hedging
any Transaction during the &ldquo;restricted period&rdquo; (as
defined in Regulation M).&nbsp; If on any Scheduled Trading Day
Counterparty delivers written notice (and confirms by telephone) by
8:30 a.m. New York Time (the &ldquo;Notification Time&rdquo;), then
such notice shall be effective to suspend the Valuation Period as
of such Notification Time.&nbsp; In the event that Counterparty
delivers notice and/or confirms by telephone after the Notification
Time, then the Valuation Period shall be suspended effective as of
8:30 a.m. New York Time on the following Scheduled Trading Day or
as otherwise required by law or agreed between Counterparty and
GS&amp;Co.&nbsp; The Valuation Period shall be suspended and the
Valuation Date extended for each Scheduled Trading Day in such
restricted period.</p>

<p><a name=
"_DV_M219"></a>&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;(b)&nbsp;&nbsp;In
the event that GS&amp;Co. concludes, in its reasonable discretion,
that it is appropriate with respect to any legal, regulatory or
self-regulatory requirements or related policies and procedures
(whether or not such requirements, policies or procedures are
imposed by law or have been voluntarily adopted by GS&amp;Co.), for
it to refrain from purchasing Shares on any Scheduled Trading Day
during the Valuation Period, GS&amp;Co. may by written notice to
Counterparty elect to suspend the Valuation Period for such number
of Scheduled Trading Days as is specified in the notice.&nbsp; The
notice shall not specify, and GS&amp;Co. shall not otherwise
communicate to Counterparty, the reason for GS&amp;Co.&rsquo;s
election to suspend the Valuation Period.&nbsp; The Valuation
Period shall be suspended and the Valuation Date extended for each
Scheduled Trading Day occurring during any such suspension.</p>

<p><a name=
"_DV_M220"></a>&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;(c)&nbsp;&nbsp;In
the event that the Valuation Period is suspended pursuant to
Sections 5(a) or (b) above during the regular trading session on
the Exchange,<a name="_DV_M221"></a> then the Calculation Agent in
its sole discretion shall, in calculating the Forward Cash
Settlement Amount, extend the Valuation Period and make adjustments
to the weighting of each Relevant Price for purposes of determining
the Settlement Price, with such adjustments based on, among other
factors, the duration of any such suspension and the volume,
historical trading patterns and price of the Shares.</p>

<p><a name=
"_DV_M222"></a>&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;(d)&nbsp;&nbsp;On
the first Exchange Business Day of each calendar week during the
Valuation Period, to the extent that the Number of Daily Reference
Shares exceeds 25% of the ADTV (as defined in Rule 10b-18 under the
Exchange Act (&ldquo;Rule 10b-18&rdquo;)) for the Shares on such
day, the Calculation Agent will (i) adjust the Number of Daily
Reference Shares to equal an amount equal to 15% of ADTV for the
Shares determined and effective on such Exchange Business Day and
(ii) deem the remaining Scheduled Trading Days in the Valuation
Period to be equal to the Remaining Number of Shares divided by the
Number of Daily Reference Shares (after giving effect to any
adjustments pursuant to (i) above), rounded up to the nearest whole
number.</p>

<p></p>

<p><a name=
"_DV_M223"></a>&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;
&ldquo;Number of Daily Reference Shares&rdquo; means, for each
Transaction, initially the Initial Number of Daily Reference Shares
(as set forth in the Supplemental Confirmation) and thereafter as
may be adjusted in accordance with this Section 5(d); provided that
on the first Exchange Business Day of the <a name=
"_DV_M224"></a>fifth<a name="_DV_M225"></a> calendar week following
any such adjustment the Number of Daily Reference Shares shall
equal the lesser of (i) the Initial Number of Daily Reference
Shares and (ii) 15% of the ADTV of the Shares determined on such
Exchange Business Day.</p>

<p></p>

<p><a name=
"_DV_M226"></a>&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;
&ldquo;Remaining Number of Shares&rdquo; means, for each
Transaction and as of any date of determination, a number of Shares
equal to (i) the Number of Shares minus (ii) the sum of, for each
Exchange Business Day in the Valuation Period up to and including
such date, the Number of Shares divided by the total number of
Exchange Business Days in the Valuation Period (the &ldquo;Daily
Amount&rdquo;).&nbsp; The Daily Amount will be deemed to be zero
for each day on which the Valuation Period is suspended in
accordance with Sections 5(a) and (b) hereof.&nbsp; In the event
that the Valuation Period is extended pursuant to the terms of this
Master Confirmation, the Calculation Agent may make corresponding
adjustments to the amount of the Remaining Number of Shares.</p>

<p><a name=
"_DV_M227"></a>&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;6.&nbsp;&nbsp;<u>
Counterparty Purchases.&nbsp; Counterparty represents, warrants and
covenants to GS&amp;Co. that for each Transaction</u>:</p>

<p><a name=
"_DV_M228"></a>&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;(a)&nbsp;&nbsp;Counterparty
(or any &ldquo;affiliated purchaser&rdquo; as defined in Rule
10b-18) shall not, purchase any Shares, listed contracts on the
Shares or securities that are convertible into, or exchangeable or
exercisable for Shares (including, without limitation, any Rule
10b-18 purchases of blocks (as defined in Rule 10b-18)) during any
Valuation Period (as extended pursuant to the provisions of Section
5 and &ldquo;Valuation Period&rdquo; herein) except for purchases
through GS&amp;Co. or an entity affiliated with GS&amp;Co., or if
not through GS&amp;Co., with the prior written consent of
GS&amp;Co., and in compliance with Rule&nbsp;10b-18 or otherwise in
a manner that Counterparty and GS&amp;Co. believe is in compliance
with applicable requirements and except for purchases in connection
with management compensation plans or other employee benefit
arrangements and except for purchases of the Counterparty&rsquo;s
9.50% Convertible Subordinated Notes due 2010, provided such
purchases are made in compliance with any applicable legal
regulatory or self-regulatory requirements or related policies and
procedures (whether such requirements, policies or procedures are
imposed by law or have been voluntarily adopted by GS&amp;Co. for
uniform application to all such purchases).&nbsp; Any such purchase
by Counterparty shall be disregarded for purposes of determining
the Forward Cash Settlement Amount.&nbsp; To the extent that
Counterparty makes any such purchase other than through GS&amp;Co.,
or other than in connection with any Transaction, Counterparty
hereby represents and warrants to GS&amp;Co. that (a) it will not
take other action that would or could cause GS&amp;Co.&rsquo;s
purchases of the Shares during the Valuation Period not to comply
with Rule 10b-18 and (b) any such purchases will not otherwise
constitute a violation of Section 9(a) or Rule 10(b) of the
Exchange Act.&nbsp; This subparagraph (a) shall not restrict any
purchases by Counterparty of Shares effected during any suspension
of any Valuation Period in accordance with Section&nbsp;5 herein
and any purchases during such suspension shall be disregarded in
calculating the Forward Cash Settlement Amount; and for the
avoidance of doubt, this subparagraph&nbsp;(a) shall not restrict
any holders of outstanding securities of the Counterparty from
exercising or converting such securities to Shares; and</p>

<p><a name=
"_DV_M229"></a>&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;(b)&nbsp;&nbsp;Counterparty
is entering into this Master Confirmation and each Transaction
hereunder in good faith and not as part of a plan or scheme to
evade the prohibitions of Rule 10b5-1 under the Exchange Act
(&ldquo;Rule 10b5-1&rdquo;).&nbsp; It is the intent of the parties
that each Transaction entered into under this Master Confirmation
comply with the requirements of Rule 10b5-1(c)(1)(i)(A) and (B) and
each Transaction entered into under this Master Confirmation shall
be interpreted to comply with the requirements of Rule
10b5-1(c).&nbsp; Counterparty will not seek to control or influence
GS&amp;Co. to make "purchases or sales" (within the meaning of Rule
10b5-1(c)(1)(i)(B)(3)) under any Transaction entered into under
this Master Confirmation, including, without limitation,
GS&amp;Co.&rsquo;s decision to enter into any hedging
transactions.&nbsp; Counterparty represents and warrants that it
has consulted with its own advisors as to the legal aspects of its
adoption and implementation of this Master Confirmation and each
Supplemental Confirmation under Rule 10b5-1.</p>

<p><a name=
"_DV_M230"></a>&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;7.&nbsp;&nbsp;<u>
Additional Termination Events</u>.&nbsp; Additional Termination
Events will apply<a name="_DV_M231"></a> under Section 5(b)(v) of
the Agreement.&nbsp; The following will constitute Additional
Termination Events, in each case with Counterparty as the sole
Affected Party:<a name="_DV_M233"></a></p>

<p><a name=
"_DV_M234"></a>&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;(a)&nbsp;&nbsp;Notwithstanding
anything to the contrary in the Equity Definitions, the occurrence
of a Nationalization, Insolvency or a Delisting (in each case
effective on the Announcement Date as determined by the Calculation
Agent);</p>

<p><a name=
"_DV_M235"></a>&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;(b)&nbsp;&nbsp;Notwithstanding
anything to the contrary in the Equity Definitions, the occurrence
of a Merger Event (effective on the Merger Date) or a Tender Offer
(effective on the Tender Offer Date) in respect of which any Other
Consideration received for the Shares does not consist of
cash.&nbsp; <a name="_DV_M236"></a>For the avoidance of doubt, <a
name="_DV_M237"></a>in the event that any portion of the
consideration received for the Shares consists of cash or New
Shares, this Additional Termination Event shall only apply with
respect to all or any Transaction(s) (or portions thereof)
remaining after giving effect to the provisions in
&ldquo;Consequences of Merger Events&rdquo; or &ldquo;Consequences
of Tender Offers&rdquo;, as the case may be, above;</p>

<p><a name=
"_DV_M238"></a>&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;(c)&nbsp;&nbsp;[reserved];
or<a name="_DV_M239"></a></p>

<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;
(d)<a name="_DV_M258"></a>&nbsp;&nbsp;Notwithstanding anything to
the contrary in the Equity Definitions, <a name="_DV_M240"></a>one
day prior to the ex-dividend date in respect of any<a name=
"_DV_M241"></a> Extraordinary Dividend<a name="_DV_M242"></a> (as
specified in the Supplemental Confirmation) by the Issuer; provided
that<a name="_DV_M243"></a> <a name="_DV_M244"></a>in<a name=
"_DV_M245"></a> the <a name="_DV_M246"></a>event<a name=
"_DV_M247"></a> that GS&amp;Co. and Counterparty enter into a
mutually acceptable new <a name="_DV_M248"></a>transaction<a name=
"_DV_M249"></a> (using their good faith and commercially reasonable
efforts) <a name="_DV_M250"></a>on or prior to <a name=
"_DV_M251"></a>one day prior to the ex-dividend date in respect of
the Extraordinary Dividend, the amounts determined pursuant to
Section 6(e) of the Agreement or otherwise to be owed by
Counterparty and GS&amp;Co. with respect to the Affected
Transaction(s) shall be <a name="_DV_M252"></a>deemed to be only
the amounts that would otherwise be owed hereunder in respect of
the Forward Cash Settlement Amount (the &ldquo;Termination Forward
Settlement Amount&rdquo;), the Floating Amount (the
&ldquo;Termination Floating Amount&rdquo;), the Fixed Amount, (the
&ldquo;Termination Fixed Amount&rdquo;) and the Counterparty
Additional Payment Amount if the Early Termination Date were the
Cash Settlement Payment Date, and shall be payable in cash or (in
the case of the Counterparty) by Net Share Settlement or a
combination of the two.<a name="_DV_C8">&nbsp; In</a><a name=
"_DV_M253"></a> the event that an Early Termination Date would
otherwise occur pursuant to this clause 7(d) while the Counterparty
is in possession of, or is aware of, material, non-public
information, the Early Termination Date shall not be deemed to
occur until the day after the day on which Counterparty is not in
possession of, and is not aware of, material non-public information
<a name="_DV_C9">so long as, if, at the Counterparty&rsquo;s
option, on or prior to one day prior to the ex-dividend date for
such Extraordinary Dividend, Counterparty agrees to pay GS&amp;Co.
no later than the earlier of the entry into the new transaction or
the dividend payment date for such Extraordinary Dividend, a fixed
amount in cash or by Net Share Settlement or a combination of the
two, that shall be determined in good faith by GS&amp;Co. as having
a value equal to (i) the amount per share of such Extraordinary
Dividend multiplied by (ii) the actual number of Shares that will
remain borrowed by GS&amp;Co. in connection with any Hedge
Positions related to the Transaction</a><a name="_DV_M254"></a> as
of such ex-dividend date.&nbsp; If the Counterparty does not so
agree on or prior to one day prior to the ex-dividend date for such
Extraordinary Dividend, the Early Termination Date shall occur at
the close of business on the Exchange Business Day that is one day
prior to the ex-dividend date.&nbsp; For purposes of this Section
7(d):&nbsp; the Termination Forward Settlement Amount shall mean
an&nbsp; amount in Settlement Currency equal to the product of (a)
the Termination Trading Days multiplied by the Initial Number of
Daily Reference Shares multiplied by (b) an amount equal to (i) the
Termination Settlement Price minus (ii) the Forward Price; the
Termination Floating Amount shall mean an amount equal to the sum
of the applicable Federal Funds Rate multiplied by (i) the Daily
Notional Amount multiplied by (ii) 1/360 for each day from and
including the Floating Amount Accrual Date to but excluding the
Early Termination Date; and the Termination Fixed Amount shall mean
an amount equal to the sum of (I) the applicable Daily Additional
Spread multiplied by (i) the Daily Notional Amount multiplied by
(ii)&nbsp;1/360 for each day from and including the Floating Amount
Accrual Date to but excluding the Early Termination Date plus (II)
an amount equal to the sum<a name="_DV_M255"></a> of the applicable
Fixed Rate<a name="_DV_M256"></a> multiplied by (i) &nbsp;<a name=
"_DV_M257"></a>the Notional Amount multiplied by (ii)&nbsp;1/360
for each day from and including the Floating Amount Accrual Date to
but excluding the Early Termination Date.&nbsp; Also for purposes
of this Section 7(d): &ldquo;Termination Trading Days&rdquo; shall
mean the number of Exchange Business Days (excluding any day(s) on
which the Valuation Period was suspended in accordance with Section
5 herein or as a result of any Scheduled Trading Day being a
Disrupted Day) from and including the Valuation Period Start Date
to and including the Early Termination Date; &ldquo;Termination
Valuation Period&rdquo; shall mean the Exchange Business&nbsp; Days
during the period commencing on and including the Valuation Period
Start Date to and including the Early Termination Date (but
excluding any day(s) on which the Valuation Period was suspended in
accordance with Section 5 herein or as a result of any Scheduled
Trading Day being a Disrupted Day and including any day(s) by which
the Valuation Period was extended pursuant to the provision below);
and the &ldquo;Termination Settlement Price&rdquo; shall mean the
arithmetic mean of the Relevant Prices of the Shares for each
Exchange Business Day in the Termination Valuation
Period.&nbsp;</p>

<p><a name=
"_DV_M259"></a>&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;8.&nbsp;&nbsp;<u>
Automatic Termination Provisions</u>.&nbsp; Notwithstanding
anything to the contrary in Section 6 of the Agreement:</p>

<p><a name=
"_DV_M260"></a>&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;(a)&nbsp;&nbsp;An
Additional Termination Event with Counterparty as the sole Affected
Party will automatically occur without any notice or action by
GS&amp;Co. or Counterparty if the price of the Shares on the
Exchange at any time falls below the Termination Price (as
specified in the related Supplemental Confirmation) provided that
(for the avoidance of doubt only) such Additional Termination Event
shall be an Additional Termination Event only with respect to the
Transaction documented in such related Supplemental
Confirmation.&nbsp; The Exchange Business Day that the price of the
Shares on the Exchange at any time falls below the Termination
Price will be the &ldquo;Early Termination Date&rdquo; for purposes
of the Agreement.</p>

<p><a name=
"_DV_M261"></a>&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;(b)&nbsp;&nbsp;Notwithstanding
anything to the contrary in Section 6(d) of the Agreement,
following the occurrence of such an Additional Termination Event,
GS&amp;Co. will notify Counterparty of the amount owing under
Section 6(e) of the Agreement within a commercially reasonable time
period (with such period based upon the amount of time, determined
by GS&amp;Co. (or any of its Affiliates) in its reasonable
discretion, that it would take to unwind any of its Hedge
Position(s) related to the Transaction in a commercially reasonable
manner based on relevant market indicia).&nbsp; For purposes of the
&ldquo;Net Share Settlement Upon Early Termination&rdquo;
provisions herein, (i) the date that such notice is effective (the
&ldquo;Notice Date&rdquo;) shall constitute the &ldquo;Net Share
Valuation Date&rdquo;, (ii) the Exchange Business Day immediately
following the Notice Date shall be the Net Share Settlement Date
and (iii) all references to the <a name="_DV_M262"></a>Forward Cash
Amount<a name="_DV_M263"></a> <a name="_DV_M264"></a>or the Fixed
Amount <a name="_DV_M265"></a>in Annex B hereto shall be deemed to
be the Early Termination Amount.&nbsp; For the avoidance of doubt,
Hedge Position shall only mean any purchase, sale, entry into or
maintenance of one or more stock borrowing transactions by
GS&amp;Co. or its Affiliates in respect of the Shares in connection
with this Transaction and, notwithstanding the forgoing portions of
this paragraph and Sections 6(d) and (e) of the Agreement,
Counterparty shall be entitled to satisfy the Hedge Position by
delivery of the Number of Early Settlement Shares as defined in and
pursuant to the provisions of Section 10.</p>

<p><a name=
"_DV_M266"></a>&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;9.&nbsp;&nbsp;<u>
Special Provisions for Merger Events</u>.&nbsp; Notwithstanding
anything to the contrary herein or in the Equity Definitions, to
the extent that an Announcement Date for a potential Merger
Transaction occurs during any Valuation Period:</p>

<p><a name=
"_DV_M267"></a>&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;(a)&nbsp;&nbsp;Promptly
after request from GS&amp;Co., Counterparty shall provide
GS&amp;Co. with written notice specifying (i) Counterparty&rsquo;s
average daily Rule 10b-18 Purchases (as defined in Rule 10b-18)
during the three full calendar months immediately preceding the
Announcement Date that were not effected through GS&amp;Co. or its
affiliates and (ii) the number of Shares purchased pursuant to the
proviso in Rule 10b-18(b)(4) under the Exchange Act for the three
full calendar months preceding the Announcement Date.&nbsp; Such
written notice shall be deemed to be a certification by
Counterparty to GS&amp;Co. that such information is true and
correct.&nbsp; Counterparty understands that GS&amp;Co. will use
this information in calculating the trading volume for purposes of
Rule 10b-18; and</p>

<p><a name=
"_DV_M268"></a>&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;(b)&nbsp;&nbsp;GS&amp;Co.
in its sole discretion may (i) make adjustments to the terms of any
Transaction, including, without limitation, the Valuation Date and
the Number of Shares to account for the number of Shares that could
be purchased on each day during the Valuation Period in compliance
with Rule 10b-18 following the Announcement Date or (ii) treat the
occurrence of the Announcement Date as an Additional Termination
Event with Counterparty as the sole Affected Party.&nbsp;</p>

<p><a name=
"_DV_M269"></a>&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;
&ldquo;Merger Transaction&rdquo; means any merger, acquisition or
similar transaction involving a recapitalization as contemplated by
Rule 10b-18(a)(13)(iv) under the Exchange Act.</p>

<p><a name=
"_DV_M270"></a>&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;10.&nbsp;&nbsp;<u>
Special Settlement Following Early Termination and Extraordinary
Events</u>.&nbsp; Notwithstanding anything to the contrary in this
Master Confirmation or any Supplemental Confirmation hereunder, in
the event that an Extraordinary Event under Article 12 of the
Equity Definitions occurs or an Early Termination Date <a name=
"_DV_M271"></a>under Section 6 of the Agreement <a name=
"_DV_M272"></a>occurs or is designated with respect to any
Transaction (each an &ldquo;Affected Transaction&rdquo;), then <a
name="_DV_M273"></a>either party may elect, <a name=
"_DV_M275"></a>by notice to <a name="_DV_M276"></a>the other party,
to have Counterparty deliver the Number of Early Settlement Shares
to GS&amp;Co. on the date that such notice is effective<a name=
"_DV_M278"></a> (provided that GS&amp;Co. determines in its good
faith sole discretion that such delivery is in compliance with any
legal, regulatory or self-regulatory requirements or related
policies and procedures), except for a termination as a result of
Section 7(d), in which event the date of delivery shall be the
tenth Business Day <a name="_DV_M279"></a>thereafter.&nbsp; To the
extent that Counterparty elects to deliver Shares <a name=
"_DV_M280"></a>to GS&amp;Co.<a name="_DV_M281"></a> accompanied by
an effective Registration Statement (satisfactory to GS&amp;Co. in
its <a name="_DV_M282"></a>reasonable<a name="_DV_M283"></a>
discretion) covering such Early Settlement Shares, Counterparty
must be in compliance with the conditions specified in (iii) though
(ix) in Annex B hereto at the time of such delivery.&nbsp; If
Counterparty elects to deliver Unregistered Shares (as defined in
Annex B) to GS&amp;Co., Counterparty and GS&amp;Co. will negotiate
in good faith on acceptable procedures and documentation relating
to the sale of such Unregistered Shares.</p>

<p><a name=
"_DV_M284"></a>&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;
&ldquo;Number of Early Settlement Shares&rdquo; means a number of
Shares based on the Hedge Positions of GS&amp;Co. or any of its
Affiliates&rsquo; with respect to each Affected Transaction under
this Master Confirmation at the time of the Extraordinary Event or
Early Termination Date, as applicable.</p>

<p><a name=
"_DV_M285"></a>&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;<a
 name="_DV_M286"></a>In determining the amount of Loss under
Section 6(e) of the Agreement or the Cancellation Amount under
Article 12, the parties shall take into account the Floating Rate
Amount that would have otherwise been due to the Counterparty and
the Fixed Amount that would have otherwise been due to GS&amp;Co.,
and the difference between the New York 10b-18 Volume Weighted
Average Price per share of the Shares over the Valuation Period as
compared to the Forward Price.&nbsp; Further, if Counterparty
delivers Early Settlement Shares, an amount equal to the product of
(i) &nbsp;<a name="_DV_M287"></a>the Number of Early Settlement
Shares multiplied by (ii) the Forward Price (or if Counterparty
delivers Unregistered Shares, as reduced by a discount determined
by GS&amp;Co. in a good faith commercially reasonable manner based
on the discount to the New York 10b-18 Volume Weighted Average
Price at which it could sell the Shares and whether GS&amp;Co. and
Counterparty have agreed on acceptable procedures and documentation
relating to such Unregistered Shares as described above) shall be
credited against any amount owing under Section 6(e) of the
Agreement or pursuant to Article 12 of the Equity Definitions<a
name="_DV_M288"></a> or otherwise under this Master
Confirmation.</p>

<p><a name=
"_DV_M290"></a>&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;11.&nbsp;&nbsp;<u>
Acknowledgments</u>.&nbsp; The parties hereto intend for:</p>

<p><a name=
"_DV_M291"></a>&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;(a)&nbsp;&nbsp;Each
Transaction to be a &ldquo;securities contract&rdquo; as defined in
Section 741(7) of the U.S. Bankruptcy Code (Title 11 of the United
States Code) (the &ldquo;Bankruptcy Code&rdquo;), a &ldquo;swap
agreement&rdquo; as defined in Section 101(53B) of the Bankruptcy
Code, or a &ldquo;forward contract&rdquo; as defined in Section
101(25) of the Bankruptcy Code, and the parties hereto to be
entitled to the protections afforded by, among other Sections,
Sections 362(b)(6), 362(b)(17), 555, 556, and 560 of the Bankruptcy
Code;</p>

<p><a name=
"_DV_M292"></a>&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;(b)&nbsp;&nbsp;A
party&rsquo;s right to liquidate or terminate any Transaction, net
out or offset termination values of payment amounts, and to
exercise any other remedies upon the occurrence of any Event of
Default under the Agreement with respect to the other party to
constitute a &ldquo;contractual right&rdquo; (as defined in the
Bankruptcy Code);</p>

<p><a name=
"_DV_M293"></a>&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;(c)&nbsp;&nbsp;All
payments for, under or in connection with each Transaction, all
payments for the Shares and the transfer of such Shares to
constitute &ldquo;settlement payments&rdquo; and
&ldquo;transfers&rdquo; (as defined in the Bankruptcy Code).</p>

<p><a name="_Ref39818512"></a><a name=
"_DV_M294"></a>&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;12.&nbsp;&nbsp;<u>
Set-Off</u>.&nbsp; The parties agree to amend Section 6 of the
Agreement by adding a new Section 6(f) thereto as follows:</p>

<p><a name="_DV_M295"></a>&ldquo;(f)&nbsp; Upon the occurrence of
an Event of Default or Termination Event with respect to a party
who is the Defaulting Party or the Affected Party ("X"), the other
party ("Y") will have the right (but not be obliged) without prior
notice to X or any other person to set-off or apply any obligation
of X owed to Y<a name="_DV_M296"></a>&nbsp; (whether or not matured
or contingent and whether or not arising under the Agreement, and
regardless of the currency, place of payment or booking office of
the obligation) against any obligation of Y<a name="_DV_M297"></a>
owed to X (whether or not matured or contingent and whether or not
arising under the Agreement, and regardless of the currency, place
of payment or booking office of the obligation).&nbsp; Y will give
notice to the other party of any set-off effected under this
Section 6(f).</p>

<p><a name="_DV_M298"></a>Amounts (or the relevant portion of such
amounts) subject to set-off may be converted by Y into the
Termination Currency at the rate of exchange at which such party
would be able, acting in a reasonable manner and in good faith, to
purchase the relevant amount of such currency.&nbsp; If any
obligation is unascertained, Y may in good faith estimate that
obligation and set-off in respect of the estimate, subject to the
relevant party accounting to the other when the obligation is
ascertained.&nbsp; Nothing in this Section 6(f) shall be effective
to create a charge or other security interest.&nbsp; This Section
6(f) shall be without prejudice and in addition to any right of
set-off, combination of accounts, lien or other right to which any
party is at any time otherwise entitled (whether by operation of
law, contract or otherwise).&rdquo;</p>



<p><a name=
"_DV_M299"></a>&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;13.&nbsp;&nbsp;<u>
Payment Date Upon Early Termination</u>.&nbsp; Notwithstanding
anything to the contrary in Section 6(d)(ii) of the Agreement, all
amounts calculated as being due in respect of an Early Termination
Date under Section 6(e) of the Agreement will be payable on the day
that notice of the amount payable is effective, except as otherwise
provided in this Master Confirmation or any Supplemental
Confirmation.</p>

<p><a name=
"_DV_M300"></a>&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;14.&nbsp;&nbsp;<u>
Share Settlement; Maximum Shares</u>.&nbsp; Notwithstanding
anything contained in this Master Confirmation, the Agreement or
the Equity Definitions, Counterparty may satisfy all amounts it may
owe GS&amp;Co. hereunder and under each Supplemental Confirmation
by delivery of Shares in accordance with Annex B and/or Section 10
hereof, and is solely vested with the right to determine whether to
satisfy its obligations in Shares, in cash or in a combination of
the two.&nbsp; Notwithstanding anything contained in this Master
Confirmation, the Agreement or the Equity Definitions, Counterparty
and GS&amp;Co. agree that if Counterparty elects to satisfy its
obligations to GS&amp;Co. by delivery of Shares, the delivery of a
number of Shares equal to the Reserved Shares will satisfy in full
the obligation of Counterparty to make any payments pursuant to
Section 6(e) of the Agreement, Article 12 of the Equity Definitions
or otherwise in respect of the Transaction.</p>

<p><a name=
"_DV_M301"></a>&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;15.&nbsp;&nbsp;<u>
Governing Law</u>.&nbsp; The Agreement, this Master Confirmation
and each Supplemental Confirmation and all matters arising in
connection with the Agreement, this Master Confirmation and each
Supplemental Confirmation shall be governed by, and construed and
enforced in accordance with, the law of the State of New York
without reference to its choice of law doctrine.</p>

<p><a name=
"_DV_M302"></a>&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;16.&nbsp;&nbsp;<u>
Offices</u>.</p>

<p><a name=
"_DV_M303"></a>&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;(a)&nbsp;&nbsp;The
Office of GS&amp;Co. for each Transaction is:&nbsp; One New York
Plaza, New York, New York 10004.&nbsp;</p>

<p><a name=
"_DV_M304"></a>&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;(b)&nbsp;&nbsp;The
Office of Counterparty for each Transaction is:&nbsp; One Market
Spear Tower, Suite 2400 San Francisco, CA 94105.</p>

<p><a name=
"_DV_M305"></a>&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;<b>
17.&nbsp;&nbsp;<u>Arbitration</u>.</b></p>

<p><a name=
"_DV_M306"></a>&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;<b>
(a)&nbsp;&nbsp;Arbitration is final and binding on Counterparty and
GS&amp;Co.</b></p>

<p><a name=
"_DV_M307"></a>&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;<b>
(b)&nbsp;&nbsp;Counterparty and GS&amp;Co. are waiving their right
to seek remedies in court, including the right to a jury
trial.</b></p>

<p><a name=
"_DV_M308"></a>&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;<b>
(c)&nbsp;&nbsp;Pre-arbitration discovery is generally more limited
than and different from court proceedings.</b></p>

<p><a name=
"_DV_M309"></a>&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;<b>
(d)&nbsp;&nbsp;The arbitrators&rsquo; award is not required to
include factual findings or legal reasoning and any party&rsquo;s
right to appeal or to seek modification of rulings by the
arbitrators is strictly limited.</b></p>

<p><a name=
"_DV_M310"></a>&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;<b>
(e)&nbsp;&nbsp;The panel of arbitrators will typically include a
minority of arbitrators who were or are affiliated with the
securities industry.</b></p>

<p><a name=
"_DV_M311"></a>&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;<b>
Any controversy between or among GS&amp;Co. or its affiliates, or
any of its or their partners, directors, agents or employees, on
the one hand, and Counterparty or its agents and affiliates, on the
other hand, arising out of or relating to the Agreement or any
Transaction entered into hereunder, shall be settled by
arbitration, in accordance with the then current rules of<a name=
"_DV_M312"></a> the American Arbitration Association
(&ldquo;AAA&rdquo;), except that&nbsp; the provisions of this
Section 17 shall supersede any conflicting or inconsistent
provisions of such rules.&nbsp; Each party shall appoint a
qualified arbitrator within 5 days after the giving of notice by
either party.&nbsp; If either party shall fail timely to appoint a
qualified arbitrator, the appointed, qualified arbitrator shall
select the second qualified arbitrator within 5 days after such
party's failure to appoint.&nbsp; The qualified arbitrators so
appointed shall meet and shall, if possible, determine such matter
within 10 days after the second qualified arbitrator is appointed,
and their determination shall be binding on the parties.&nbsp; If
for any reason such two qualified arbitrators fail to agree on such
matter within such period of 10 days, then either party may request
the AAA to appoint a qualified arbitrator who shall be impartial
within 7 days of such request and both parties shall be bound by
any appointment so made by the AAA.&nbsp; Within 7 days after the
third qualified arbitrator has been appointed, each of the first
two qualified arbitrators shall submit their respective
determinations to the third qualified arbitrator who must select
one or the other of such determinations (whichever the third
qualified arbitrator believes to be correct or closest to a correct
determination) within 7 days after the first two qualified
arbitrators shall have submitted their respective determinations to
the third qualified arbitrator, and the selection so made shall in
all cases be binding upon the parties, and judgment upon such
decision may be entered into any court having jurisdiction.&nbsp;
In the event of the failure, refusal or inability of a qualified
arbitrator to act, a successor shall be appointed within 10 days as
hereinbefore provided.&nbsp; The costs of the arbitration shall be
funded 50% by each party, and the parties shall bear their own
attorneys' fees, during the arbitration.&nbsp; The prevailing party
shall be repaid all of such expenses by the non-prevailing party
within 10 days after the final determination of the qualified
arbitrator(s).&nbsp; The award of the arbitrators shall be final,
and judgment upon the award rendered may be entered in any court,
state or Federal, having jurisdiction.</b></p>

<p><a name=
"_DV_M313"></a>&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;<b>
Neither party shall bring a putative or certified class action to
arbitration, nor seek to enforce any pre-dispute arbitration
agreement against any person who has initiated in court a putative
class action; who is a member of a putative class who has not opted
out of the class with respect to any claims encompassed by the
putative class action until:</b></p>

<p><a name=
"_DV_M314"></a>&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;<b>
(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the class certification is
denied;</b></p>

<p><a name=
"_DV_M315"></a>&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;<b>
(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the class is decertified;
or</b></p>

<p><a name=
"_DV_M316"></a>&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;<b>
(iii)&nbsp;&nbsp;&nbsp;&nbsp;the party is excluded from the class
by the court.</b></p>

<p><a name="_DV_M317"></a><b>Such forbearance to enforce an
agreement to arbitrate shall not constitute a waiver of any rights
under the Agreement except to the extent stated herein.</b></p>

<p align="center">[SIGNATURE PAGE FOLLOWS]</p>
</div>

<br clear="all" />


<div>
<p><a name=
"_DV_M318"></a>&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;18.&nbsp;&nbsp;Counterparty
hereby agrees (a)&nbsp;to check this Master Confirmation carefully
and immediately upon receipt so that errors or discrepancies can be
promptly identified and rectified and (b)&nbsp;to confirm that the
foregoing (in the exact form provided by GS&amp;Co.) correctly sets
forth the terms of the agreement between GS&amp;Co. and
Counterparty with respect to any Transaction, by manually signing
this Master Confirmation or this page hereof as evidence of
agreement to such terms and providing the other information
requested herein and immediately returning an executed copy to
Equity Derivatives Documentation Department, facsimile No.
212-428-1980/83.</p>

<a name="_DV_M322"></a><a name="_DV_M324"></a>
<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top"></td>
<td valign="top">
<p>Yours sincerely,</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p><a name="_DV_M319"></a><b>GOLDMAN, SACHS &amp; CO.<a name=
"_DV_M320"></a></b></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:<a name=
"_DV_M321"></a><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Frank
Huber&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br />

 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vice
President&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br />

 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Authorized
Signatory</p>
</td>
</tr>

<tr>
<td valign="top">
<p>Agreed and Accepted By:</p>
</td>
<td valign="top"></td>
</tr>

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

<tr>
<td valign="top">
<p><b>PG&amp;E CORPORATION<a name="_DV_M323"></a></b></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>
By:<u>&nbsp;&nbsp;Leroy T. Barnes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>&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;<u>&nbsp;</u><br />

 Name:&nbsp;&nbsp;Leroy T. Barnes<br />
 Title:&nbsp;&nbsp;Vice President and Treasurer</p>
</td>
<td valign="top"></td>
</tr>
</table>

<p></p>
</div>

<br clear="all" />


<hr>


<div>
<p align="center"><a name="_DV_M325"></a><b>ANNEX A<br />
<br />
SUPPLEMENTAL CONFIRMATION FOR FULLY UNCOLLARED TRANSACTIONS</b></p>

<p><b></b></p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p><b>To:</b></p>
</td>
<td valign="top">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
<td valign="top">
<p>PG&amp;E Corporation<br />
 One Market Spear Tower<br />
 Suite 2400<br />
 San Francisco, CA 94105</p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><b>From:</b></p>
</td>
<td valign="top">
</td>
<td valign="top">
<p>Goldman, Sachs &amp; Co.</p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><b>Subject:</b></p>
</td>
<td valign="top">
</td>
<td valign="top">
<p>Accelerated Share Repurchase Transaction &ndash; VWAP
Pricing</p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><b>Ref. No:</b></p>
</td>
<td valign="top">
</td>
<td valign="top">
<p>EN50BJ000000000</p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><b>Date:</b></p>
</td>
<td valign="top">
</td>
<td valign="top">
<p>March 4, 2005</p>
</td>
</tr>
</table>

<div>
<hr>
<p><b></b></p>
</div>

<p><a name=
"_DV_M326"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
purpose of this Supplemental Confirmation is to confirm the terms
and conditions of the Transaction entered into between Goldman,
Sachs &amp; Co. (&ldquo;GS&amp;Co.&rdquo;) and PG&amp;E Corporation
(&ldquo;Counterparty&rdquo;) (together, the &ldquo;Contracting
Parties&rdquo;) on the Trade Date specified below.&nbsp; This
Supplemental Confirmation is a binding contract between GS&amp;Co.
and Counterparty as of the relevant Trade Date for the Transaction
referenced below.&nbsp;</p>

<p><a name="_DV_M327"></a>1.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Supplemental Confirmation supplements, forms part of, and is
subject to the Master Confirmation dated as of <b></b>March 4, 2005
(the &ldquo;Master Confirmation&rdquo;) between the Contracting
Parties, as amended and supplemented from time to time.&nbsp; The
definitions and provisions contained in the Master Confirmation are
incorporated into this Supplemental Confirmation, except as
expressly modified below.&nbsp; In the event of any inconsistency
between those definitions and provisions and this Supplemental
Confirmation, this Supplemental Confirmation will govern.</p>

<p><a name="_DV_M328"></a>2.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
terms of the Transaction to which this Supplemental Confirmation
relates are as follows:</p>

<table border="0" cellspacing="0" cellpadding="0" width="658">
<tr>
<td valign="top" width="212">
<p>Trade Date:</p>
</td>
<td valign="top" width="442">
<p>March 4, 2005.</p>
</td>
</tr>

<tr>
<td valign="top" width="212">
</td>
<td valign="top" width="442">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="212">
<p>Forward Price:</p>
</td>
<td valign="top" width="442">
<p>USD 35.60 per Share</p>
</td>
</tr>

<tr>
<td valign="top" width="212">
</td>
<td valign="top" width="442">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="212">
<p>Number of Shares:</p>
</td>
<td valign="top" width="442">
<p>29,489,400 Shares</p>
</td>
</tr>

<tr>
<td valign="top" width="212">
</td>
<td valign="top" width="442">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="212">
<p>Valuation Period Start Date:</p>
</td>
<td valign="top" width="442">
<p>March 7, 2005</p>
</td>
</tr>

<tr>
<td valign="top" width="212">
</td>
<td valign="top" width="442">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="212">
<p>Valuation Date:</p>
</td>
<td valign="top" width="442">
<p>September 7, 2005</p>
</td>
</tr>

<tr>
<td valign="top" width="212">
</td>
<td valign="top" width="442">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="212">
<p>Termination Price:</p>
</td>
<td valign="top" width="442">
<p>$10 per Share</p>
</td>
</tr>

<tr>
<td valign="top" width="212">
</td>
<td valign="top" width="442">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="212">
<p>Fixed Rate:</p>
</td>
<td valign="top" width="442">
<p>25 basis points</p>
</td>
</tr>

<tr>
<td valign="top" width="212">
</td>
<td valign="top" width="442">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="212">
<p>Reserved Shares:</p>
</td>
<td valign="top" width="442">
<p>Two times the Number of Shares</p>
</td>
</tr>

<tr>
<td valign="top" width="212">
</td>
<td valign="top" width="442">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="212">
<p>Extraordinary Dividends:</p>
</td>
<td valign="top" width="442">
<p>Any cash dividend declared by the Issuer in excess of $0.00 per
Share except for the dividend in the amount of $0.30 per Share
payable on April 15, 2005</p>
</td>
</tr>

<tr>
<td valign="top" width="212">
</td>
<td valign="top" width="442">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="212">
<p>Initial Number of Daily Reference Shares:</p>
</td>
<td valign="top" width="442">
<p>228,600 Shares</p>
</td>
</tr>

<tr>
<td valign="top" width="212">
</td>
<td valign="top" width="442">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="212">
<p>Initial Notional Amount:</p>
</td>
<td valign="top" width="442">
<p>The Number of Shares multiplied by the Forward Price.</p>
</td>
</tr>

<tr>
<td valign="top" width="212">
</td>
<td valign="top" width="442">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="212">
<p>Counterparty Additional Payment Amount:</p>
</td>
<td valign="top" width="442">
<p>USD 7,818,120.00</p>
</td>
</tr>
</table>

<p align="center"><a name="_DV_M329"></a>[SIGNATURE PAGE
FOLLOWS]</p>

<p></p>
</div>

<br clear="all" />


<div>
<p>3.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Counterparty
represents and warrants to GS&amp;Co. that neither it (nor any
&ldquo;affiliated purchaser&rdquo; as defined in Rule 10b-18 under
the Exchange Act) have made any purchases of blocks except through
GS&amp;Co. or an entity affiliated with GS&amp;Co. pursuant to the
proviso in Rule 10b-18(b)(4) under the Exchange Act during the four
full calendar weeks immediately preceding the Trade Date.</p>

<p><a name=
"_DV_M330"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Counterparty
hereby agrees (a)&nbsp;to check this Supplemental Confirmation
carefully and immediately upon receipt so that errors or
discrepancies can be promptly identified and rectified and
(b)&nbsp;to confirm that the foregoing (in the exact form provided
by GS&amp;Co.) correctly sets forth the terms of the agreement
between GS&amp;Co. and Counterparty with respect to this
Transaction, by manually signing this Supplemental Confirmation or
this page hereof as evidence of agreement to such terms and
providing the other information requested herein and immediately
returning an executed copy to Equity Derivatives Documentation
Department, facsimile No. 212-428-1980/83.</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top"></td>
<td valign="top">
<p><a name="_DV_M331"></a>Yours sincerely,</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><b>GOLDMAN, SACHS &amp; CO.</b></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vanessa
Marling&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br />

 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vice
President&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br />

 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Authorized
Signatory</p>
</td>
</tr>

<tr>
<td valign="top">
<p>Agreed and Accepted By:</p>
</td>
<td valign="top"></td>
</tr>

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

<tr>
<td valign="top">
<p><b>PG&amp;E CORPORATION</b></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>
By:<u>&nbsp;&nbsp;Leroy T. Barnes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>&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;<u>&nbsp;</u><br />

 Name:&nbsp;&nbsp;Leroy T. Barnes<br />
 Title:&nbsp;&nbsp;Vice President and Treasurer</p>
</td>
<td valign="top"></td>
</tr>
</table>

<p></p>
</div>

<br clear="all" />


<hr>


<div>
<p align="center"><a name="_DV_M335"></a><b>ANNEX B</b></p>

<p align="center"><a name="_DV_M336"></a><b>NET SHARE SETTLEMENT
PROCEDURES</b></p>

<p><a name=
"_DV_M337"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following Net Share Settlement Procedures shall apply to the extent
that Counterparty elects Net Share Settlement in accordance with
the Master Confirmation:</p>

<p><a name=
"_DV_M338"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
Share Settlement shall be made by delivery of the number of Shares
equal in value to the sum of the Forward Cash Settlement Amount, <a
name="_DV_M339"></a>the Fixed Amount<a name="_DV_M340"></a> and the
Counterparty Additional Payment Amount (the &ldquo;Settlement
Shares&rdquo;), with such Shares&rsquo; value based on the Net
Share Settlement Price.&nbsp; Delivery of such Settlement Shares
shall be made free of any contractual or other restrictions in good
transferable form (other than under the Securities Act with respect
to any Unregistered Shares (as defined below)) on the Net Share
Settlement Date with Counterparty (i) representing and warranting
to GS&amp;Co. at the time of such delivery that it has good, valid
and marketable title or right to sell and transfer all such Shares
to GS&amp;Co. under the terms of the related Transaction free of
any lien charge, claim or other encumbrance and (ii) making the
representations and agreements contained in Section 9.11(ii)
through (iv) of the Equity Definitions to GS&amp;Co. with respect
to the Settlement Shares.&nbsp; GS&amp;Co. or any affiliate of
GS&amp;Co. designated by GS&amp;Co. (GS&amp;Co. or such affiliate,
&ldquo;GS&rdquo;) shall resell the Settlement Shares during a
period (the &ldquo;Resale Period&rdquo;) commencing no earlier than
the Exchange Business Day on which the Settlement Shares are
delivered.&nbsp; GS shall use its good faith, commercially
reasonable efforts to sell the Settlement Shares as promptly as
possible at commercially reasonable prices based on prevailing
market prices for the Shares.&nbsp; The Resale Period shall end on
the Exchange Business Day on which GS completes the sale of all
Settlement Shares or a sufficient number of Settlement Shares so
that the realized net proceeds of such sales exceed the sum of
Forward Cash Settlement Amount, the Fixed Amount and the
Counterparty Additional Payment Amount.&nbsp; Notwithstanding the
foregoing, if resale by GS of the Settlement Shares, as determined
by GS in its sole discretion (i)&nbsp;occurs during a distribution
for purposes of Regulation M, and if GS would be subject to the
restrictions of Rule&nbsp;101 of Regulation M in connection with
such distribution, the Resale Period will be postponed or tolled,
as the case may be, until the Exchange Business Day immediately
following the end of any &ldquo;restricted period&rdquo; as such
term is defined in Regulation&nbsp;M with respect to such
distribution under Regulation M or (ii)&nbsp;conflict with any
legal, regulatory or self-regulatory requirements or related
policies and procedures applicable to GS (whether or not such
requirements, policies or procedures are imposed by law or have
been voluntarily adopted by GS), the Resale Period will be
postponed or tolled, as the case may be, until such conflict is no
longer applicable.&nbsp; During the Resale Period, if the realized
net proceeds from the resale of the Settlement Shares exceed the
sum of the Forward Cash Settlement Amount, the Fixed Amount and the
Counterparty Additional Payment Amount, GS shall refund such excess
in cash to Counterparty by the close of business on the third
Exchange Business Day immediately following the last day of the
Resale Period.&nbsp; If the sum of the Forward Cash Settlement
Amount, the Fixed Amount and the Counterparty Additional Payment
Amount exceeds the realized net proceeds from such resale,
Counterparty shall transfer to GS by the open of the regular
trading session on the Exchange on the third Scheduled Trading Day
immediately following the last day of the Resale Period the amount
of such excess (the &ldquo;Additional Amount&rdquo;) in <a name=
"_DV_M341"></a>the number of Shares (&ldquo;Make-whole
Shares&rdquo;) in an amount that, based on the Net Share Settlement
Price on the last day of the Resale Period (as if such day was the
&ldquo;Net Share Valuation Date&rdquo; for purposes of computing
such Net Share Settlement Price), has a dollar value equal to the
Additional Amount.&nbsp; The Resale Period shall continue to enable
the sale of the Make-whole Shares.&nbsp; The requirements and
provisions set forth below shall apply to Shares delivered to pay
such Additional Amounts.&nbsp; This provision shall be applied
successively until the Additional Amount is equal to zero.<a name=
"_DV_M342"></a>&nbsp;</p>

<p><a name="_DV_M343"></a>Net Share Settlement of a Transaction is
subject to the following conditions:</p>

<p><a name="_DV_M344"></a>Counterparty at its sole expense
shall:</p>

<p><a name=
"_DV_M345"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;as promptly as practicable (but in no event more
than five (5) Exchange Business Days immediately following the
Settlement Method Election Date or, in the case of an election of
Net Share Settlement upon the occurrence of an Extraordinary Event
or an Early Termination Date, no more than one Exchange Business
Day immediately following either the Cancellation Date or the Early
Termination Date, as the case may be) file under the Securities Act
and use its best efforts to make effective, as promptly as
practicable, a registration statement or supplement or amend an
outstanding registration statement, in any such case, in form and
substance reasonably satisfactory to GS (the &ldquo;Registration
Statement&rdquo;) covering the offering and sale by GS of not less
than 150% of the Shares necessary to fulfill the Net Share
Settlement delivery obligation by Counterparty (determining the
number of such Shares to be registered on the basis of the average
of the Settlement Prices on the five (5)&nbsp;Exchange Business
Days prior to the date of such filing, amendment or supplement, as
the case may be);</p>

<p><a name=
"_DV_M346"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;&nbsp;maintain the effectiveness of the Registration
Statement until GS has sold all shares to be delivered by
Counterparty necessary to satisfy its Net Share Settlement
obligations;</p>

<p><a name=
"_DV_M347"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iii)&nbsp;&nbsp;have afforded GS and its counsel and other
advisers a reasonable opportunity to conduct a due diligence
investigation of Counterparty customary in scope for transactions
in which GS acts as underwriter of equity securities, and GS shall
have been satisfied (with the approval of its Commitments Committee
in accordance with its customary review process) with the results
of such investigation;</p>

<p><a name=
"_DV_M348"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iv)&nbsp;&nbsp;have negotiated and entered into an agreement with
GS providing for such covenants, conditions, representations and
warranties, underwriting discounts, commissions, indemnities and
contribution rights as are customary for GS equity underwriting
agreements, together with customary certificates and opinions of
counsel and letters of independent auditors of Counterparty to be
delivered to GS covering the shares to be delivered by Counterparty
in satisfaction of its Net Share Settlement obligations;</p>

<p><a name=
"_DV_M349"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(v)&nbsp;&nbsp;have delivered to GS such number of prospectuses
relating thereto as GS shall have reasonably requested and shall
promptly update and provide GS with replacement prospectuses as
necessary to ensure the prospectus does not contain any untrue
statement of a material fact or any omission of a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made,
not misleading;</p>

<p><a name=
"_DV_M350"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(vi)&nbsp;&nbsp; have retained for GS nationally-recognized
underwriting counsel acceptable to GS (in its sole discretion) with
broad experience in similar registered securities offerings and
such counsel shall have agreed to act as such;</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a name=
"_DV_M351"></a>(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
have taken all steps necessary for the shares sold by GS to be
listed or quoted on the primary exchange or quotation system that
the Shares are listed or quoted on;</p>

<p><a name=
"_DV_M352"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(viii)&nbsp;&nbsp;have paid all reasonable and actual out-of-pocket
costs and expenses of GS and all reasonable and actual fees and
expenses of GS&rsquo;s outside counsel and other independent
experts in connection with the foregoing; and</p>

<p><a name=
"_DV_M353"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ix)&nbsp;&nbsp;take such action as is required to ensure that
GS&rsquo;s sale of the Shares does not violate, or result in a
violation of, the federal or state securities laws.</p>

<p><a name=
"_DV_M354"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the event that the Registration Statement is not declared
effective by the Securities Exchange Commission (the
&ldquo;SEC&rdquo;) or any of the conditions specified in (ii)
through (ix) above are not satisfied on or prior to the Valuation
Date (or, in the case of an election of Net Share Settlement upon
the occurrence of an Extraordinary Event or an Early Termination
Date, on or prior to the first Exchange Business Day following
either the Cancellation Date or the Early Termination Date, as the
case may be except for any Early Termination as result of Section
7(d) of the Master Confirmation, in which case, such date shall be
the tenth Exchange Business Day following such Early Termination
Date), then Counterparty may deliver Unregistered Shares to GS in
accordance with the following conditions.&nbsp; If GS and
Counterparty can agree on acceptable pricing, procedures and
documentation relating to the sale of such Unregistered Shares
(including, without limitation, applicable requirements in (iii)
through (ix) above and insofar as pertaining to private offerings),
then such Unregistered Shares shall be deemed to be the
&ldquo;Settlement Shares&rdquo; for the purposes of the related
Transaction and the settlement procedure specified in this Annex B
shall be followed except that in the event that the Forward Cash
Settlement Amount plus the Fixed Amount, exceeds the proceeds from
the sale of such Unregistered Shares then for the purpose of
calculating the number of &ldquo;Make-whole Shares&rdquo; to be
delivered by Counterparty, GS shall determine the discount to the
Net Share Settlement Price at which it can sell the Unregistered
Shares.&nbsp; Notwithstanding the delivery of the Unregistered
Shares, Counterparty shall endeavor in good faith to have a
registration statement declared effective by the SEC as soon as
practical.&nbsp; In the event that GS has not sold sufficient
Unregistered Shares to satisfy Counterparty&rsquo;s obligations to
GS contained herein at the time that a Registration Statement
covering the offering and sale by GS of a number of Shares equal in
value to not less than 150% of the amount then owed to GS is
declared effective (based on the Net Share Settlement Price on the
Exchange Business Day (as if such Exchange Business Day were the
&ldquo;Net Share Valuation Date&rdquo; for purposes of computing
such Net Share Settlement Price) that the Registration Statement
was declared effective), GS shall return all unsold Unregistered
Shares to Counterparty and Counterparty shall deliver such number
of Shares covered by the effective Registration Statement equal to
100% of the amount then owed to GS based on such Net Share
Settlement Price.&nbsp; Such delivered shares shall be deemed to be
the &ldquo;Settlement Shares&rdquo; for the purposes of the related
Transaction and the settlement procedure specified in this Master
Confirmation, including, without limitation, this Annex B,
(including the obligation to deliver any Make-whole Shares, if
applicable) shall be followed.&nbsp; In all cases GS shall be
entitled to take any and all required actions in the course of its
sales of the Settlement Shares, including without limitation making
sales of the Unregistered Shares only to &ldquo;Qualified
Institutional Buyers&rdquo; (as such term is defined under the
Securities Act), to ensure that the sales of the Unregistered
Shares and the Settlement Shares covered by the Registration
Statement are not integrated resulting in a violation of the
securities laws and Counterparty agrees to take all actions
requested by GS in furtherance thereof.</p>

<p><a name=
"_DV_M355"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If GS and Counterparty cannot agree on acceptable pricing,
procedures and documentation relating to the sales of such
Unregistered Shares then the number of Unregistered Shares to be
delivered to GS pursuant to the provisions above shall not be based
on the Net Share Settlement Price but rather GS shall determine the
value attributed to each Unregistered Share in a commercially
reasonable manner and based on such value Counterparty shall
deliver a number of Shares equal in value to the Forward Cash
Settlement Amount plus the Fixed Amount.&nbsp; For the purposes
hereof &ldquo;Unregistered Shares&rdquo; means Shares that have not
been registered pursuant to an effective registration statement
under the Securities Act or any state securities laws (&ldquo;Blue
Sky Laws&rdquo;) and that cannot be sold, transferred, pledged or
otherwise disposed of without registration under the Securities Act
or under applicable Blue Sky Laws unless such sale, transfer,
pledge or other disposition is made in a transaction exempt from
registration thereunder.</p>

<p><a name=
"_DV_M356"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the event that Counterparty delivers Shares pursuant to an
election of Net Share Settlement then Counterparty agrees to
indemnify and hold harmless GS, its affiliates and its assignees
and their respective directors, officers, employees, agents and
controlling persons (GS and each such person being an
&ldquo;Indemnified Party&rdquo;) from and against any and all
losses, claims, damages and liabilities (or actions in respect
thereof), joint or several, to which such Indemnified Party may
become subject, under the Securities Act or otherwise, (i) relating
to or arising out of any of the Transactions contemplated by this
Master Confirmation concerning Net Share Settlement or (ii) arising
out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any preliminary
prospectus, prospectus, Registration Statement or other written
material relating to the Shares delivered to prospective
purchasers, including in each case any amendments or supplements
thereto and including but not limited to any documents deemed to be
incorporated in any such document by reference (the &ldquo;Offering
Materials&rdquo;), or arising out of or based upon any omission or
alleged omission to state in the Offering Materials a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided, however, that, in the case of this clause (ii),
Counterparty will not be liable to the extent that any loss, claim,
damage or liability arises out of or is based upon any untrue
statement or omission or alleged untrue statement or omission in
the Offering Materials made in reliance upon and in conformity with
written information furnished to Counterparty by GS expressly for
use in the Offering Materials, as expressly identified in a letter
to be delivered at the closing of the delivery of Shares by
Counterparty to GS.&nbsp; The foregoing indemnity shall exclude
losses that GS incurs solely by reason of the proceeds from the
sale of the Capped Number of Shares being less than the Forward
Cash Settlement Amount.&nbsp; Counterparty will not be liable under
the foregoing indemnification provision to the extent that any
loss, claim, damage, liability or expense is found in a
nonappealable judgment by a court of competent jurisdiction to have
resulted from GS&rsquo;s willful misconduct, gross negligence or
bad faith in performing the services that are subject of this
Master Confirmation or from information provided in writing by GS
for inclusion in the Registration Statement.&nbsp; If for any
reason the foregoing indemnification is unavailable to any
Indemnified Party or insufficient to hold harmless any Indemnified
Party, then Counterparty shall contribute, to the maximum extent
permitted by law, to the amount paid or payable by the Indemnified
Party as a result of such loss, claim, damage or liability.&nbsp;
In addition, Counterparty will reimburse any Indemnified Party for
all expenses (including reasonable counsel fees and expenses) as
they are incurred (after notice to Counterparty) in connection with
the investigation of, preparation for or defense or settlement of
any pending or threatened claim or any action, suit or proceeding
arising therefrom, whether or not such Indemnified Party is a party
thereto and whether or not such claim, action, suit or proceeding
is initiated or brought by or on behalf of Counterparty.&nbsp;
Counterparty also agrees that no Indemnified Party shall have any
liability to Counterparty or any person asserting claims on behalf
of or in right of Counterparty in connection with or as a result of
any matter referred to in the Agreement or this Master Confirmation
concerning Net Share Settlement except to the extent that any
losses, claims, damages, liabilities or expenses incurred by
Counterparty result from the gross negligence, willful misconduct
or bad faith of the Indemnified Party.&nbsp; This indemnity shall
survive the completion of any Transaction contemplated by this
Master Confirmation and any assignment and delegation of a
Transaction made pursuant to this Master Confirmation or the
Agreement shall inure to the benefit of any permitted assignee of
GS&amp;Co.</p>

<p><a name=
"_DV_M357"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In no event shall the number of Settlement Shares (including, but
without duplication or double counting, any Unregistered Shares)
and any Make-whole Shares, be greater than the Reserved Shares
minus the amount of any Shares actually delivered under any other
Transaction(s) under this Master Confirmation (the result of such
calculation, the &ldquo;Capped Number&rdquo;).&nbsp; Counterparty
represents and warrants (which shall be deemed to be repeated on
each day that a Transaction is outstanding) that the Capped Number
is equal to or less than the number of Shares determined according
to the following formula:</p>

<p align="center"><a name="_DV_M358"></a>A &ndash; B</p>

<p><a name=
"_DV_M359"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Where&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
= the number of authorized but unissued shares of the Issuer that
are not reserved for future issuance on the date of the
determination of the Capped Number; and</p>

<p><a name="_DV_M360"></a>&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;B = the maximum number of Shares required
to be delivered to third parties if Counterparty elected Net Share
Settlement of all transactions in the Shares (other than
Transactions in the Shares under this Master Confirmation) with all
third parties that are then currently outstanding and
unexercised.</p>

<p><a name="_DV_M361"></a></p>
</div>
</body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>q105_ex10-2.htm
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
<html>
<head>
<title>EXECUTION COPY First Amendment</title>
</head>
<body link="blue" vlink="purple">
<div>
<p align="right"><b>Exhibit 10.2</b></p>

<p align="right"><b>Execution Version</b></p>

<p align="center"><b><u>FIRST AMENDMENT</u></b></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FIRST
AMENDMENT, dated as of April 8, 2005 (this &ldquo;First
Amendment&rdquo;), to the Credit Agreement, dated as of December
10, 2004 (as amended, supplemented, restated or otherwise modified
from time to time, the &ldquo;Credit Agreement&rdquo;), among
PG&amp;E CORPORATION, a California corporation (the
&ldquo;Borrower&rdquo;), the several banks and other financial
institutions or entities from time to time parties to the Credit
Agreement (the &ldquo;Lenders&rdquo;), BNP PARIBAS
(&ldquo;BNP&rdquo;) and DEUTSCHE BANK SECURITIES INC.
(&ldquo;Deutsche&rdquo;), as joint lead arrangers and joint
bookrunners (together and in such capacities, the&nbsp;
&ldquo;Arrangers&rdquo;), Deutsche, as syndication agent (in such
capacity, the &ldquo;Syndication Agent&rdquo;), ABN AMRO BANK N.V.,
GOLDMAN SACHS CREDIT PARTNERS L.P. and UNION BANK OF CALIFORNIA,
N.A., as documentation agents (together and in such capacities, the
&ldquo;Documentation Agents&rdquo;), and BNP, as administrative
agent (in such capacity, together with any successors thereto, the
&ldquo;Administrative Agent&rdquo;).</p>

<p align="center">
<u>W&nbsp;I&nbsp;T&nbsp;N&nbsp;E&nbsp;S&nbsp;S&nbsp;E&nbsp;T&nbsp;H</u>:</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
pursuant to the Credit Agreement, the Lenders have agreed to make
certain loans and other extensions of credit to the Borrower;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Borrower has requested, and, upon this First Amendment becoming
effective, the Lenders have agreed, that certain provisions of the
Credit Agreement be amended as set forth below;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW,
THEREFORE, the parties hereto hereby agree as follows:</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
1.&nbsp; <u>Defined Terms</u>.&nbsp; Unless otherwise defined
herein, capitalized terms that are defined in the Credit Agreement
are used herein as therein defined.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
2.&nbsp; <u>Amendments to Section 1.1 (Defined
Terms)</u>.&nbsp;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;
The definition of &ldquo;Applicable Margin&rdquo; that appears in
Section 1.1 of the Credit Agreement is hereby amended (i) by
replacing the reference to &ldquo;level 3&rdquo; in the last
sentence therein with &ldquo;level 4&rdquo; and (ii) amending and
restating the grid that appears therein to read as follows:</p>

<div align="center">
<table border="1" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p align="center">Level</p>
</td>
<td valign="top">
<p align="center">Rating</p>

<p align="center">S&amp;P/Moody&rsquo;s</p>
</td>
<td valign="top">
<p align="center">Applicable Margin<br />
 for<br />
 Eurodollar Loans</p>
</td>
<td valign="top">
<p align="center">Applicable Margin<br />
 for<br />
 ABR Loans</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">1</p>
</td>
<td valign="top">
<p align="center">&uuml; BBB+/Baa1</p>
</td>
<td valign="top">
<p align="center">0.50%</p>
</td>
<td valign="top">
<p align="center">0.00%</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">2</p>
</td>
<td valign="top">
<p align="center">BBB/Baa2</p>
</td>
<td valign="top">
<p align="center">0.70%</p>
</td>
<td valign="top">
<p align="center">0.00%</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">3</p>
</td>
<td valign="top">
<p align="center">BBB-/Baa3</p>
</td>
<td valign="top">
<p align="center">1.05%</p>
</td>
<td valign="top">
<p align="center">0.00%</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">4</p>
</td>
<td valign="top">
<p align="center">&lt; BBB-/Baa3</p>
</td>
<td valign="top">
<p align="center">1.35%</p>
</td>
<td valign="top">
<p align="center">0.50%</p>
</td>
</tr>
</table>
</div>

<p></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;
The definition of &ldquo;Facility Fee Rate&rdquo; that appears in
Section 1.1 of the Credit Agreement is hereby amended (i) by
replacing the reference to &ldquo;level 3&rdquo; in the last
sentence therein with &ldquo;level 4&rdquo; and (ii) amending and
restating the grid that appears therein to read as follows:</p>

<div align="center">
<table border="1" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p align="center">Level</p>
</td>
<td valign="top">
<p align="center">Rating<br />
 S&amp;P/Moody&rsquo;s</p>
</td>
<td valign="top">
<p align="center">Facility Fee Rate</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">1</p>
</td>
<td valign="top">
<p align="center">&uuml; BBB+/Baa1</p>
</td>
<td valign="top">
<p align="center">0.15%</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">2</p>
</td>
<td valign="top">
<p align="center">BBB/Baa2</p>
</td>
<td valign="top">
<p align="center">0.175%</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">3</p>
</td>
<td valign="top">
<p align="center">BBB-/Baa3</p>
</td>
<td valign="top">
<p align="center">0.20%</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">4</p>
</td>
<td valign="top">
<p align="center">&lt; BBB-/Baa3</p>
</td>
<td valign="top">
<p align="center">0.40%</p>
</td>
</tr>
</table>
</div>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;
The following definitions contained in Section 1.1 of the Credit
Agreement are hereby amended and restated in their respective
entireties to read as follows:&nbsp;&nbsp;</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>&ldquo;<u>Material Adverse Effect</u>&rdquo;:&nbsp; (a) a change
in the business, property, operations or financial condition of the
Borrower and its Subsidiaries taken as a whole that could
reasonably be expected to materially and adversely affect the
Borrower&rsquo;s ability to perform its obligations under the Loan
Documents or (b) a material adverse effect on the validity or
enforceability of this Agreement or any of the other Loan
Documents.&nbsp;</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>&ldquo;<u>PG&amp;E Utility Credit Agreement</u>&rdquo;:&nbsp;
the $1,000,000,000 credit agreement, dated as of April 8, 2005,
among PG&amp;E Utility, the lenders parties thereto, the
syndication agent and the documentation agents named therein and
Citicorp North America, Inc., as administrative agent (as amended,
supplemented, restated or otherwise modified from time to
time).</p>
</td>
</tr>
</table>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;
The definition of &ldquo;Termination Date&rdquo; that appears in
Section 1.1 of the Credit Agreement is hereby amended by replacing
the word &ldquo;third&rdquo; therein with the word
&ldquo;fifth.&rdquo;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;
The following definitions that appear in Section 1.1 of the Credit
Agreement are hereby deleted in their respective entireties:&nbsp;
&ldquo;Dividend Commencement Date&rdquo; and &ldquo;Specified
Indebtedness&rdquo;.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
3.&nbsp; <u>Amendment to Section 2.3(b) (Commitment
Increases)</u>.&nbsp; Section 2.3(b) of the Credit Agreement is
hereby amended by replacing the reference to
&ldquo;$10,000,000&rdquo; therein with
&ldquo;$5,000,000.&rdquo;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
4.&nbsp; <u>Amendment to Section 4.1 (Financial
Condition)</u>.&nbsp; The first two sentences of Section 4.1 of the
Credit Agreement are hereby amended and restated in their entirety
to read as follows:</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>4.1&nbsp; <u>Financial Condition</u>.&nbsp; The audited
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as of December&nbsp;31, 2004, and the related
consolidated statement of operations and cash flows for the fiscal
year ended on such date, reported on by Deloitte &amp; Touche LLP,
present fairly in all material respects the consolidated financial
condition of the Borrower and its consolidated Subsidiaries as of
such date, and the consolidated results of its operations and its
consolidated cash flows for the respective fiscal year then
ended.&nbsp; All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods
involved.&nbsp;</p>
</td>
</tr>
</table>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
5.&nbsp;&nbsp;<u>Amendment to Section 4.10 (ERISA)</u>.&nbsp; The
first sentence of Section 4.10 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>4.10&nbsp;&nbsp; ERISA.&nbsp; Neither a Reportable Event (other
than the Post-event Notices of Reportable Events filed with the
PBGC on May&nbsp;2, 2001, in respect of the April&nbsp;6, 2001,
bankruptcy filing of PG&amp;E Utility, on July&nbsp;16, 2003, in
respect of the July&nbsp;8, 2003, bankruptcy filing of National
Energy &amp; Gas Transmission (&ldquo;NEGT&rdquo;), and on November
4, 2004, in respect of the departure of NEGT from the PG&amp;E
Utility controlled group of companies on October 29, 2004) nor an
&ldquo;accumulated funding deficiency&rdquo; (within the meaning of
Section&nbsp;412 of the Code or Section&nbsp;302 of ERISA) has
occurred during the five&#8209;year period prior to the date on
which this representation is made or deemed made with respect to
any Plan, and each Plan has complied with the applicable provisions
of ERISA and the Code, except, in each case, to the extent that any
such Reportable Event, &ldquo;accumulated funding deficiency&rdquo;
or failure to comply with the applicable provisions of ERISA or the
Code could not reasonably be expected to result in a Material
Adverse Effect.&nbsp;</p>
</td>
</tr>
</table>

<p><a name="_DV_M0"></a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
6.&nbsp;&nbsp;<u>Amendment to Section 4.14 (Accuracy of
Information)</u>.&nbsp; The last sentence of Section 4.14 of the
Credit Agreement is hereby amended and restated in its entirety to
read as follows:</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>There is no fact known to the Borrower that could reasonably be
expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, in the
Information Memorandum (including any attachments thereto)<a name=
"_DV_C1">, the Specified Exchange Act Filings</a><a name=
"_DV_M2"></a> or in any other documents, certificates and
statements furnished to the Administrative Agent and the Lenders
for use in connection with the transactions contemplated hereby and
by the other Loan Documents.</p>
</td>
</tr>
</table>

<p><a name="_DV_M1"></a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
7.&nbsp; <u>Amendment to Section 5.2(b) (Conditions to Each Credit
Event)</u>.&nbsp; Section 5.2(b) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>(b)&nbsp; Representations and Warranties.&nbsp; Each of the
representations and warranties made by the Borrower in this
Agreement that does not contain a materiality qualification (other
than the representations and warranties set forth in Sections 4.2
and 4.6(b)) shall be true and correct in all material respects on
and as of the date of such extension of credit as if made on and as
of such date, and each of the representations and warranties made
by the Borrower in this Agreement that contains a materiality
qualification <a name="_DV_C14">(other than the representations and
warranties set forth in Sections 4.2 and 4.6(b))</a> shall be true
and correct on and as of such date (or, to the extent such
representations and warranties specifically relate to an earlier
date, that such representations were true and correct in all
material respects, or true and correct, as the case may be, as of
such earlier date).</p>
</td>
</tr>
</table>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
8. <u>Amendment to Section 6.5(b) (Maintenance of Property;
Insurance)</u>.&nbsp; Section 6.5 of the Credit Agreement is hereby
amended by deleting each reference to the phrase &ldquo;or the
applicable Significant Subsidiary&rdquo; therein.&nbsp;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
9.&nbsp; <u>Amendment to Section 6.7(b) (Notices)</u>.&nbsp;
Section 6.7(b) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p><a name="_DV_C18">(b)&nbsp; any litigation or proceeding or, to
the knowledge of the Borrower, and investigation that, in each
case, may exist at any time between the Borrower or any of its
Significant Subsidiaries and any Governmental Authority, including
environmental proceeding, that could reasonably be expected to have
a Material Adverse Effect;</a></p>
</td>
</tr>
</table>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
10.&nbsp; <u>Amendment to Section 7.2 of the Credit Agreement
(Indebtedness)</u>.&nbsp;&nbsp; Section 7.2 of the Credit Agreement
is hereby amended (i) by deleting clause (a) of such section in its
entirety and (ii) replacing the phrase &ldquo;(b) permit&rdquo;
therein with the word &ldquo;Permit&rdquo;.&nbsp;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
11.&nbsp; <u>Amendment to Section 7.4 of the Credit Agreement
(Fundamental Changes)</u>.&nbsp; Section 7.4 of the Credit
Agreement is hereby amended and restated in its entirety to read as
follows:</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>7.4&nbsp; Fundamental Changes.&nbsp; Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or Dispose of
all or substantially all of its property or business, except that
the Borrower may be merged, consolidated or amalgamated with
another Person or Dispose of all or substantially all of its
property or business so long as, after giving effect to such
transaction, (a) no Default or Event of Default shall have occurred
and be continuing, (b) either (i) the Borrower is the continuing or
surviving corporation of such merger, consolidation or amalgamation
or (ii) the continuing or surviving corporation of such merger,
consolidation or amalgamation, if not the Borrower or the
purchaser, as the case may be, shall have assumed all obligations
of the Borrower under the Loan Documents pursuant to arrangements
reasonably satisfactory to the Administrative Agent and
(c)&nbsp;the ratings by Moody&rsquo;s and S&amp;P of the continuing
or surviving corporation&rsquo;s or purchaser&rsquo;s, as the case
may be, senior, unsecured, non credit-enhanced debt shall be at
least the higher of (1) Baa3 from Moody&rsquo;s and BBB- from
S&amp;P and (2)&nbsp;the ratings by such rating agencies of the
Borrower&rsquo;s senior, unsecured, non credit-enhanced debt in
effect before the earlier of the occurrence or the public
announcement of such event.</p>
</td>
</tr>
</table>

<p></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
12.&nbsp; <u>Amendments to Section 8 (Events of Default)</u>.&nbsp;
Section 8 is hereby amended as follows:</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;by
amending and restating clause (c) of such section in its entirety
to read as follows:</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>(c)&nbsp; the Borrower shall default in the observance or
performance of any agreement contained in Sections 7.1, 7.2, 7.4 or
7.5 of the Credit Agreement; or</p>
</td>
</tr>
</table>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;by
adding the following proviso at the end of clause (e) of such
section:&nbsp;</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>;provided further, that unless payment of the Loans hereunder
has already been accelerated, if such default shall be cured by the
Borrower or such Significant Subsidiary or waived by the holders of
such Indebtedness and any acceleration of maturity having resulted
from such default shall be rescinded or annulled, in each case, in
accordance with the terms of such agreement or instrument, without
any modification of the terms of such Indebtedness requiring the
Borrower or such Significant Subsidiary to furnish security or
additional security therefor, reducing the average life to maturity
thereof or increasing the principal amount thereof, or any
agreement by the Borrower or such Significant Subsidiary to furnish
security or additional security therefor or to issue in lieu
thereof Indebtedness secured by additional or other collateral or
with a shorter average life to maturity or in a greater principal
amount, then any Default hereunder by reason thereof shall be
deemed likewise to have been thereupon cured or waived; or</p>
</td>
</tr>
</table>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;by
amending and restating clause (g) of such section in its entirety
to read as follows:</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>(g) a trustee shall be appointed to administer any Plan under
Section 4042 of ERISA, or the PBGC shall institute proceedings to
terminate, or to have a trustee appointed to administer any Plan
and such proceedings shall continue undismissed or unstayed and in
effect for a period of 30 days, and any such event could reasonably
be expected to result in a Material Adverse Effect; or</p>
</td>
</tr>
</table>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
13.&nbsp; <u>Conditions to Effectiveness</u>.&nbsp; This First
Amendment shall become effective on the date first set forth above
(such date, the &ldquo;First Amendment Effective Date&rdquo;) upon
the satisfaction of the following conditions precedent:</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;the
Administrative Agent shall have received counterparts of this First
Amendment duly executed and delivered by the Borrower and each of
the Lenders;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;the
Borrower shall have paid all reasonable, out-of-pocket expenses of
the Administrative Agent incurred in connection with this First
Amendment, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent; and</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;the
Administrative Agent shall have received (i) for the account of
each Lender which executes this First Amendment, an amendment fee
in the amount equal to the product of (x) 0.075% and (y) such
Lender&rsquo;s outstanding Commitments on the First Amendment
Effective Date.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
14.&nbsp; <u>Representations and Warranties</u>.&nbsp; The Borrower
represents and warrants to each of the Lenders and the
Administrative Agent that each of the representations and
warranties made by the Borrower in or pursuant to the Credit
Agreement, as amended by this First Amendment, that does not
contain a materiality qualification is true and correct in all
material respects on and as of the First Amendment Effective Date
as if made on and as of such date, and each of the representations
and warranties made by the Borrower in or pursuant to the Credit
Agreement, as amended by this First Amendment, that contains a
materiality qualification is true and correct on and as of such
date (or, to the extent such representations and warranties
specifically relate to an earlier date, that such representations
and warranties were true and correct in all material respects, or
true and correct, as the case may be, as of such earlier
date).&nbsp;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
15.&nbsp; <u>Counterparts</u>.&nbsp; This First Amendment may be
executed by one or more of the parties to this First Amendment on
any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this First
Amendment by facsimile transmission shall be effective as delivery
of a manually executed counterpart hereof.&nbsp; A set of the
copies of this First Amendment signed by all the parties shall be
lodged with the Borrower and the Administrative Agent.&nbsp; From
and after the First Amendment Effective Date, this First Amendment
shall be binding upon each of the parties hereto and each of their
respective successors and assigns (including transferees of its
Commitments and Loans in whole or in part prior to effectiveness
hereof) and binding in respect of all of its Commitments and Loans,
including any acquired subsequent to its execution and delivery
hereof and prior to the effectiveness hereof.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
16.&nbsp; <u>Continuing Effect; No Other Amendments</u>.&nbsp;
Except as expressly amended, modified and supplemented hereby, the
provisions of the Credit Agreement and each other Loan Document are
and shall remain unchanged and in full force and effect.&nbsp; Any
references in the Credit Agreement to &ldquo;this Agreement&rdquo;,
&ldquo;hereunder&rdquo;, &ldquo;herein&rdquo; or words of like
import, and each reference in any other document executed in
connection with the Credit Agreement to &ldquo;the
Agreement&rdquo;, &ldquo;the Credit Agreement&rdquo;,
&ldquo;thereunder&rdquo;, &ldquo;therein&rdquo; or words of like
import, shall mean and be a reference to the Credit Agreement as
amended hereby.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
17.&nbsp; <u>GOVERNING LAW</u>.&nbsp; THIS FIRST AMENDMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.</p>

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

<i><br clear="all" />
</i>

<div>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be executed by their respective officers thereunto
duly authorized as of the day and year first above written.</p>

<div align="center">
<table border="0" cellspacing="0" cellpadding="0" width="671">
<tr>
<td valign="top">
<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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>PG&amp;E CORPORATION</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Leroy T. Barnes, Jr.</u>_________</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Leroy T.
Barnes, Jr.</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp; Vice President and Treasurer</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>BNP PARIBAS, as Administrative Agent and as a Lender</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Mark A. Renaud</u>______</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp;
Mark A. Renaud</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; Managing Director</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Francis J. DeLaney</u>____</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Francis
J. DeLaney</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; Managing Director</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>DEUTSCHE BANK SECURITIES INC., as Syndication Agent</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Richard Henshall&nbsp;</u> ___</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Richard
Henshall</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; David J. Bell</u>________</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; David J.
Bell</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Managing Director</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>ABN AMRO BANK N.V., as Documentation Agent and as a Lender</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; John D.
Reed_&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; John D.
Reed</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Todd D. Vaubel</u>____&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Todd D.
Vaubel</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Assistant Vice President</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>GOLDMAN SACHS CREDIT PARTNERS L.P., as Documentation Agent and
as a Lender</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By: &nbsp;&nbsp;<u>/s/ Bruce S. Mendelsohn&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;Bruce S. Mendelsohn<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp;&nbsp;&nbsp;Authorized Signatory</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>UNION BANK OF CALIFORNIA, N.A., as Documentation Agent and as a
Lender</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Dennis G. Blank</u>_____</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Dennis G.
Blank</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; Vice President</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>BARCLAYS BANK PLC</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Sydney G.
Dennis&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Sydney G.
Dennis</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>CITICORP USA, INC.</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Dhaya Ranganathan</u>________</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Dhaya
Ranganathan</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>DEUTSCHE BANK AG NEW YORK BRANCH</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Richard
Henshall&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Richard
Henshall</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; David J. Bell</u>____</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; David J.
Bell</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; Managing Director</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>JPMORGAN CHASE BANK, N.A.</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Thomas Casey</u>_______</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Thomas
Casey</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; Vice President</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>KBC BANK N.V.</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Jean-Pierre
Diels</u>___&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; Name:&nbsp;&nbsp;&nbsp;
Jean-Pierre Diels</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; First Vice President</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Eric Raskin</u>_________</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Eric
Raskin</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; Vice President</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>LEHMAN BROTHERS BANK, FSB</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Janine M. Shugan</u>___&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Janine M.
Shugan</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; Authorized Signatory</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>MORGAN STANLEY BANK</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Daniel Twenge </u>__</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Daniel
Twenge</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; Vice President</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>ROYAL BANK OF CANADA</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp; By:&nbsp; <u>/s/&nbsp; Linda M. Stephens__</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Name:&nbsp;&nbsp; Linda M. Stephens</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; Authorized Signatory</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>THE BANK OF NEW YORK</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Jesus Williams______</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Jesus
Williams</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Title:
&nbsp;&nbsp;&nbsp;&nbsp; Vice President</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>THE BANK OF NOVA SCOTIA</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Thane Rattew</u>&nbsp;&nbsp;
__________</p>
</td>
</tr>

<tr>
<td valign="top">
<p>&nbsp;</p>
</td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Thane
Rattew</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Managing Director</p>
</td>
</tr>
</table>
</div>

<p></p>
</div>
</body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>5
<FILENAME>q105_ex10-3.htm
<DESCRIPTION>EXHIBIT 10.3
<TEXT>
<html>
<head>
<title>Pacific Gas and Electric Credit Agreement</title>
</head>
<body>
<div>
<div></div>

<p align="right"><b>Exhibit 10.3</b>
</p>

<p align="center">$1,000,000,000<br />
</p>

<p align="center">CREDIT AGREEMENT<br />
</p>

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

<p align="center">PACIFIC GAS AND ELECTRIC COMPANY,<br />
</p>

<p align="center">as Borrower,<br />
</p>

<p align="center">The Several Lenders from Time to Time Parties
Hereto,<br />
</p>

<p align="center">CITICORP NORTH AMERICA, INC.,<br />
<br />
as Administrative Agent,<br />
</p>

<p align="center">JPMORGAN CHASE BANK, N.A.,<br />
<br />
as Syndication Agent,<br />
</p>

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

<p align="center">BARCLAYS BANK PLC, BNP PARIBAS<br />
</p>

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

<p align="center">DEUTSCHE BANK SECURITIES INC.,<br />
<br />
as Documentation Agents</p>

<p align="center">Dated as of April 8, 2005</p>

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

<p align="center">CITIGROUP GLOBAL MARKETS, INC.</p>

<p align="center">and J.P. MORGAN SECURITIES INC.,<br />
as Joint Lead Arrangers and<br />
Joint Bookrunners</p>
</div>

<br clear="all" />


<div>
<p>TABLE OF CONTENTS</p>

<div align="center">
<table border="0" cellspacing="0" cellpadding="0" width="658">
<tr>
<td colspan="3" valign="top" width="139"></td>
<td valign="top" width="483"></td>
<td valign="top" width="30">
<p>Page</p>
</td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>Section 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="483">
<p>
DEFINITIONS..............................................................................................</p>
</td>
<td valign="top" width="30">
<p>1</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>1.1</p>
</td>
<td valign="top" width="483">
<p>Defined
Terms.................................................................................................</p>
</td>
<td valign="top" width="30">
<p>1</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>1.2</p>
</td>
<td valign="top" width="483">
<p>Other Definitional
Provisions............................................................................</p>
</td>
<td valign="top" width="30">
<p>17</p>
</td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="483"></td>
<td valign="top" width="30"></td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>Section 2.</p>
</td>
<td valign="top" width="483">
<p>AMOUNT AND TERMS OF
COMMITMENTS..........................................</p>
</td>
<td valign="top" width="30">
<p>18</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.1</p>
</td>
<td valign="top" width="483">
<p>
Commitments..................................................................................................</p>
</td>
<td valign="top" width="30">
<p>18</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.2</p>
</td>
<td valign="top" width="483">
<p>Proceudre for Revolving Loan
Borrowing........................................................</p>
</td>
<td valign="top" width="30">
<p>19</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.3</p>
</td>
<td valign="top" width="483">
<p>Commitment
Increases....................................................................................</p>
</td>
<td valign="top" width="30">
<p>19</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.4</p>
</td>
<td valign="top" width="483">
<p>Swingline
Commitment....................................................................................</p>
</td>
<td valign="top" width="30">
<p>21</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.5</p>
</td>
<td valign="top" width="483">
<p>Procedure for Swingline Borrowing; Refunding of Swingline
Loans...................</p>
</td>
<td valign="top" width="30">
<p>21</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.6</p>
</td>
<td valign="top" width="483">
<p>Facility Fees, Utilization Fees,
etc....................................................................</p>
</td>
<td valign="top" width="30">
<p>23</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.7</p>
</td>
<td valign="top" width="483">
<p>Termination or Reduction of commitments; Extension of
Termination Date........</p>
</td>
<td valign="top" width="30">
<p>23</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.8</p>
</td>
<td valign="top" width="483">
<p>Optional
Prepayments.....................................................................................</p>
</td>
<td valign="top" width="30">
<p>25</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.9</p>
</td>
<td valign="top" width="483">
<p>Conversion and Continuation
Options..............................................................</p>
</td>
<td valign="top" width="30">
<p>26</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.10</p>
</td>
<td valign="top" width="483">
<p>Limitations on Eurodollar
Tranches..................................................................</p>
</td>
<td valign="top" width="30">
<p>26</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.11</p>
</td>
<td valign="top" width="483">
<p>Interest Rates and Payment
Dates....................................................................</p>
</td>
<td valign="top" width="30">
<p>26</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.12</p>
</td>
<td valign="top" width="483">
<p>Computation of Interest and
Fees....................................................................</p>
</td>
<td valign="top" width="30">
<p>27</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.13</p>
</td>
<td valign="top" width="483">
<p>Inability to Determine Interest
Rate..................................................................</p>
</td>
<td valign="top" width="30">
<p>27</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.14</p>
</td>
<td valign="top" width="483">
<p>Pro Rata Treatment and Payments;
Notes........................................................</p>
</td>
<td valign="top" width="30">
<p>28</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.15</p>
</td>
<td valign="top" width="483">
<p>Requirements of
Law.......................................................................................</p>
</td>
<td valign="top" width="30">
<p>29</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.16</p>
</td>
<td valign="top" width="483">
<p>
Taxes..............................................................................................................</p>
</td>
<td valign="top" width="30">
<p>31</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.17</p>
</td>
<td valign="top" width="483">
<p>
Indemnity........................................................................................................</p>
</td>
<td valign="top" width="30">
<p>33</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2,18</p>
</td>
<td valign="top" width="483">
<p>Change of Lending
Office................................................................................</p>
</td>
<td valign="top" width="30">
<p>33</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>2.19</p>
</td>
<td valign="top" width="483">
<p>Replacement of
Lenders..................................................................................</p>
</td>
<td valign="top" width="30">
<p>33</p>
</td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="483"></td>
<td valign="top" width="30"></td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>Section 3.</p>
</td>
<td valign="top" width="483">
<p>LETTERS OF
CREDIT..................................................................................
........................................................................................................................</p>
</td>
<td valign="top" width="30">
<p>34</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>3.1</p>
</td>
<td valign="top" width="483">
<p>L/C
Commitment.............................................................................................</p>
</td>
<td valign="top" width="30">
<p>34</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>3.2</p>
</td>
<td valign="top" width="483">
<p>Procedure for Issuance of Letters of
Credit......................................................</p>
</td>
<td valign="top" width="30">
<p>35</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>3.3</p>
</td>
<td valign="top" width="483">
<p>Fees and Other
Charges..................................................................................</p>
</td>
<td valign="top" width="30">
<p>35</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>3.4</p>
</td>
<td valign="top" width="483">
<p>L/C
Participations............................................................................................</p>
</td>
<td valign="top" width="30">
<p>35</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>3.5</p>
</td>
<td valign="top" width="483">
<p>Reimbursement Obligation of the
Borrower......................................................</p>
</td>
<td valign="top" width="30">
<p>37</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>3.6</p>
</td>
<td valign="top" width="483">
<p>Obligations
Absolute.......................................................................................</p>
</td>
<td valign="top" width="30">
<p>37</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>3.7</p>
</td>
<td valign="top" width="483">
<p>Letter of Credit
Payments................................................................................</p>
</td>
<td valign="top" width="30">
<p>38</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>3.8</p>
</td>
<td valign="top" width="483">
<p>
Applications....................................................................................................</p>
</td>
<td valign="top" width="30">
<p>38</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>3.9</p>
</td>
<td valign="top" width="483">
<p>Actions of Issuing
Lenders...............................................................................</p>
</td>
<td valign="top" width="30">
<p>38</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>3.10</p>
</td>
<td valign="top" width="483">
<p>Borrower&rsquo;s
Indemnification..............................................................................</p>
</td>
<td valign="top" width="30">
<p>38</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>3.11</p>
</td>
<td valign="top" width="483">
<p>Lenders&rsquo;
Indemnification..................................................................................</p>
</td>
<td valign="top" width="30">
<p>39</p>
</td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="483"></td>
<td valign="top" width="30"></td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>Section 4.</p>
</td>
<td valign="top" width="483">
<p>REPRESENTATION AND
WARRANTIES.................................................</p>
</td>
<td valign="top" width="30">
<p>39</p>
</td>
</tr>

<tr>
<td width="7">
<p>&nbsp;</p>
</td>
<td valign="top" width="7"></td>
<td valign="top" width="121">
<p>4.1</p>
</td>
<td valign="top" width="483">
<p>Financial
Condition..........................................................................................</p>
</td>
<td valign="top" width="30">
<p>39</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>4.2</p>
</td>
<td valign="top" width="483">
<p>No
Change.....................................................................................................</p>
</td>
<td valign="top" width="30">
<p>40</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>4.3</p>
</td>
<td valign="top" width="483">
<p>Existence; Compliance with
Law......................................................................</p>
</td>
<td valign="top" width="30">
<p>40</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>4.4</p>
</td>
<td valign="top" width="483">
<p>Power; Authorization; Enforceable
Obligations.................................................</p>
</td>
<td valign="top" width="30">
<p>40</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>4.5</p>
</td>
<td valign="top" width="483">
<p>No Legal
Bar..................................................................................................</p>
</td>
<td valign="top" width="30">
<p>40</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>4.6</p>
</td>
<td valign="top" width="483">
<p>
Litigation.........................................................................................................</p>
</td>
<td valign="top" width="30">
<p>41</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>4.7</p>
</td>
<td valign="top" width="483">
<p>No
Default......................................................................................................</p>
</td>
<td valign="top" width="30">
<p>41</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>4.8</p>
</td>
<td valign="top" width="483">
<p>
Taxes..............................................................................................................</p>
</td>
<td valign="top" width="30">
<p>41</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>4.9</p>
</td>
<td valign="top" width="483">
<p>Federal
Regulations.........................................................................................</p>
</td>
<td valign="top" width="30">
<p>41</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>4.10</p>
</td>
<td valign="top" width="483">
<p>
ERISA............................................................................................................</p>
</td>
<td valign="top" width="30">
<p>41</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>4.11</p>
</td>
<td valign="top" width="483">
<p>Investment Company Act; Other
Regulations...................................................</p>
</td>
<td valign="top" width="30">
<p>42</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>4.12</p>
</td>
<td valign="top" width="483">
<p>Use of
Proceeds..............................................................................................</p>
</td>
<td valign="top" width="30">
<p>42</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>4.13</p>
</td>
<td valign="top" width="483">
<p>Environmental
Matters.....................................................................................</p>
</td>
<td valign="top" width="30">
<p>42</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>4.14</p>
</td>
<td valign="top" width="483">
<p>Accuracy of Information,
etc............................................................................</p>
</td>
<td valign="top" width="30">
<p>43</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>4.15</p>
</td>
<td valign="top" width="483">
<p>Regulatory
Matters..........................................................................................</p>
</td>
<td valign="top" width="30">
<p>44</p>
</td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="483"></td>
<td valign="top" width="30"></td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>Section 5.</p>
</td>
<td valign="top" width="483">
<p>CONDITIONS
PRECEDENT.......................................................................</p>
</td>
<td valign="top" width="30">
<p>44</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>5.1</p>
</td>
<td valign="top" width="483">
<p>Conditions to the Effective
Date.......................................................................</p>
</td>
<td valign="top" width="30">
<p>44</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>5.2</p>
</td>
<td valign="top" width="483">
<p>Conditions to Each Credit
Event......................................................................</p>
</td>
<td valign="top" width="30">
<p>46</p>
</td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="483"></td>
<td valign="top" width="30"></td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>Section 6.</p>
</td>
<td valign="top" width="483">
<p>AFFIRMATIVE
COVENANTS....................................................................</p>
</td>
<td valign="top" width="30">
<p>47</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>6.1</p>
</td>
<td valign="top" width="483">
<p>Financial
Statements........................................................................................</p>
</td>
<td valign="top" width="30">
<p>47</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>6.2</p>
</td>
<td valign="top" width="483">
<p>Certificates; Other
Information.........................................................................</p>
</td>
<td valign="top" width="30">
<p>47</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>6.3</p>
</td>
<td valign="top" width="483">
<p>Payment of
Taxes............................................................................................</p>
</td>
<td valign="top" width="30">
<p>48</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>6.4</p>
</td>
<td valign="top" width="483">
<p>Maintenance of Existence;
Compliance............................................................</p>
</td>
<td valign="top" width="30">
<p>48</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>6.5</p>
</td>
<td valign="top" width="483">
<p>Maintenance of Property;
Insurance.................................................................</p>
</td>
<td valign="top" width="30">
<p>48</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>6.6</p>
</td>
<td valign="top" width="483">
<p>Inspection of Property; Books and Records;
Discussions.................................</p>
</td>
<td valign="top" width="30">
<p>48</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>6.7</p>
</td>
<td valign="top" width="483">
<p>
Notices...........................................................................................................</p>
</td>
<td valign="top" width="30">
<p>49</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>6.8</p>
</td>
<td valign="top" width="483">
<p>Maintenance of Licenses,
etc...........................................................................</p>
</td>
<td valign="top" width="30">
<p>50</p>
</td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="483"></td>
<td valign="top" width="30"></td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>Section 7.</p>
</td>
<td valign="top" width="483">
<p>NEGATIVE
COVENANTS...........................................................................</p>
</td>
<td valign="top" width="30">
<p>50</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>7.1</p>
</td>
<td valign="top" width="483">
<p>Consolidated Capitalization
Ratio.....................................................................</p>
</td>
<td valign="top" width="30">
<p>50</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>7.2</p>
</td>
<td valign="top" width="483">
<p>
Liens...............................................................................................................</p>
</td>
<td valign="top" width="30">
<p>50</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>7.3</p>
</td>
<td valign="top" width="483">
<p>Fundamental
Changes......................................................................................</p>
</td>
<td valign="top" width="30">
<p>50</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>7.4</p>
</td>
<td valign="top" width="483">
<p>Release
Date...................................................................................................</p>
</td>
<td valign="top" width="30">
<p>50</p>
</td>
</tr>

<tr>
<td colspan="3" valign="top" width="139"></td>
<td valign="top" width="483"></td>
<td valign="top" width="30"></td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>Section 8.</p>
</td>
<td valign="top" width="483">
<p>EVENTS OF
DEFAULT................................................................................</p>
</td>
<td valign="top" width="30">
<p>51</p>
</td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="483"></td>
<td valign="top" width="30"></td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>Section 9.</p>
</td>
<td valign="top" width="483">
<p>THE
AGENTS...............................................................................................</p>
</td>
<td valign="top" width="30">
<p>54</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>9.1</p>
</td>
<td valign="top" width="483">
<p>
Appointment...................................................................................................</p>
</td>
<td valign="top" width="30">
<p>54</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>9.2</p>
</td>
<td valign="top" width="483">
<p>Delegation of
Duties........................................................................................</p>
</td>
<td valign="top" width="30">
<p>54</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>9.3</p>
</td>
<td valign="top" width="483">
<p>Exculpatory
Provisions....................................................................................</p>
</td>
<td valign="top" width="30">
<p>54</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>9.4</p>
</td>
<td valign="top" width="483">
<p>Reliance by Administrative
Agent.....................................................................</p>
</td>
<td valign="top" width="30">
<p>54</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>9.5</p>
</td>
<td valign="top" width="483">
<p>Notice of
Default.............................................................................................</p>
</td>
<td valign="top" width="30">
<p>55</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>9.6</p>
</td>
<td valign="top" width="483">
<p>Non-Reliance on Agents and Other
Lenders....................................................</p>
</td>
<td valign="top" width="30">
<p>55</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>9.7</p>
</td>
<td valign="top" width="483">
<p>
Indemnification................................................................................................</p>
</td>
<td valign="top" width="30">
<p>56</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>9.8</p>
</td>
<td valign="top" width="483">
<p>Agent in Its Individual
Capacity........................................................................</p>
</td>
<td valign="top" width="30">
<p>56</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>9.9</p>
</td>
<td valign="top" width="483">
<p>Successor Administrative
Agent.......................................................................</p>
</td>
<td valign="top" width="30">
<p>56</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>9.10</p>
</td>
<td valign="top" width="483">
<p>Documentation Agents and Syndication
Agent..................................................</p>
</td>
<td valign="top" width="30">
<p>57</p>
</td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top" width="483"></td>
<td valign="top" width="30"></td>
</tr>

<tr>
<td colspan="3" valign="top" width="139">
<p>Section 10.</p>
</td>
<td valign="top" width="483">
<p>
MISCELLANEOUS......................................................................................</p>
</td>
<td valign="top" width="30">
<p>57</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>10.1</p>
</td>
<td valign="top" width="483">
<p>Amendments and
Waivers...............................................................................</p>
</td>
<td valign="top" width="30">
<p>57</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>10.2</p>
</td>
<td valign="top" width="483">
<p>
Notices...........................................................................................................</p>
</td>
<td valign="top" width="30">
<p>59</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>10.3</p>
</td>
<td valign="top" width="483">
<p>No Waiver; Cumulative
Remedies...................................................................</p>
</td>
<td valign="top" width="30">
<p>60</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>10.4</p>
</td>
<td valign="top" width="483">
<p>Survival of Representations and
Warranties......................................................</p>
</td>
<td valign="top" width="30">
<p>60</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>10.5</p>
</td>
<td valign="top" width="483">
<p>Payment of Expenses and
Taxes......................................................................</p>
</td>
<td valign="top" width="30">
<p>60</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>10.6</p>
</td>
<td valign="top" width="483">
<p>Successors and Assigns; Participations and
Assignments..................................</p>
</td>
<td valign="top" width="30">
<p>61</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>10.7</p>
</td>
<td valign="top" width="483">
<p>Adjustments;
Set&#8209;off........................................................................................</p>
</td>
<td valign="top" width="30">
<p>64</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>10.8</p>
</td>
<td valign="top" width="483">
<p>
Counterparts...................................................................................................</p>
</td>
<td valign="top" width="30">
<p>65</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>10.9</p>
</td>
<td valign="top" width="483">
<p>
Severability.....................................................................................................</p>
</td>
<td valign="top" width="30">
<p>65</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>10.10</p>
</td>
<td valign="top" width="483">
<p>
Integration.......................................................................................................</p>
</td>
<td valign="top" width="30">
<p>65</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>10.11</p>
</td>
<td valign="top" width="483">
<p><b>Governing
Law....................................................................................</b></p>
</td>
<td valign="top" width="30">
<p>65</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>10.12</p>
</td>
<td valign="top" width="483">
<p>Submission To Jurisdiction;
Waivers................................................................</p>
</td>
<td valign="top" width="30">
<p>65</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>10.13</p>
</td>
<td valign="top" width="483">
<p>
Acknowledgments...........................................................................................</p>
</td>
<td valign="top" width="30">
<p>66</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>10.14</p>
</td>
<td valign="top" width="483">
<p>
Confidentiality.................................................................................................</p>
</td>
<td valign="top" width="30">
<p>66</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>10.15</p>
</td>
<td valign="top" width="483">
<p><b>WAIVERS OF JURY
TRIAL......................................................................</b></p>
</td>
<td valign="top" width="30">
<p>67</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>10.16</p>
</td>
<td valign="top" width="483">
<p>Releases of Senior
Bond..................................................................................</p>
</td>
<td valign="top" width="30">
<p>67</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top" width="16"></td>
<td valign="top" width="121">
<p>10.17</p>
</td>
<td valign="top" width="483">
<p>USA Patriot
Act..............................................................................................</p>
</td>
<td valign="top" width="30">
<p>67</p>
</td>
</tr>
</table>
</div>
</div>

<br clear="all" />


<div>
<table border="0" cellspacing="0" cellpadding="0" width="647">
<tr>
<td valign="top">
<p><u>SCHEDULES:</u></p>
</td>
<td valign="top"></td>
</tr>

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

<tr>
<td valign="top">
<p>1.1A</p>
</td>
<td valign="top">
<p>Commitments</p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><u>EXHIBITS:</u></p>
</td>
<td valign="top"></td>
</tr>

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

<tr>
<td valign="top">
<p>A</p>
</td>
<td valign="top">
<p>Form of Bond Delivery Agreement</p>
</td>
</tr>

<tr>
<td valign="top">
<p>B</p>
</td>
<td valign="top">
<p>Form of New Lender Supplement</p>
</td>
</tr>

<tr>
<td valign="top">
<p>C</p>
</td>
<td valign="top">
<p>Form of Commitment Increase Supplement</p>
</td>
</tr>

<tr>
<td valign="top">
<p>D</p>
</td>
<td valign="top">
<p>Form of Compliance Certificate</p>
</td>
</tr>

<tr>
<td valign="top">
<p>E</p>
</td>
<td valign="top">
<p>Form of Closing Certificate</p>
</td>
</tr>

<tr>
<td valign="top">
<p>F</p>
</td>
<td valign="top">
<p>Form of Assignment and Assumption</p>
</td>
</tr>

<tr>
<td valign="top">
<p>G-1</p>
</td>
<td valign="top">
<p>Form of Legal Opinion of Orrick, Herrington &amp; Sutcliffe LLP,
as to corporate matters</p>
</td>
</tr>

<tr>
<td valign="top">
<p>G-2</p>
</td>
<td valign="top">
<p>Form of Legal Opinion of Orrick, Herrington &amp; Sutcliffe LLP,
as to regulatory matters</p>
</td>
</tr>

<tr>
<td valign="top">
<p>G-3</p>
</td>
<td valign="top">
<p>Form of Legal Opinion of Bruce R. Worthington, Esq.</p>
</td>
</tr>

<tr>
<td valign="top">
<p>H</p>
</td>
<td valign="top">
<p>Form of Exemption Certificate</p>
</td>
</tr>

<tr>
<td valign="top">
<p>I</p>
</td>
<td valign="top">
<p>Form of Senior Bond</p>
</td>
</tr>

<tr>
<td valign="top">
<p>J</p>
</td>
<td valign="top">
<p>Form of Note</p>
</td>
</tr>

<tr>
<td valign="top">
<p>K</p>
</td>
<td valign="top">
<p>Form of Escrow Deposit and Disbursement Agreement</p>
</td>
</tr>
</table>

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

<br clear="all" />


<div>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CREDIT
AGREEMENT (this &ldquo;<u>Agreement</u>&rdquo;), dated as of April
8, 2005, among PACIFIC GAS AND ELECTRIC COMPANY, a California
corporation (the &ldquo;<u>Borrower</u>&rdquo;), the several banks
and other financial institutions or entities from time to time
parties to this Agreement (the &ldquo;<u>Lenders</u>&rdquo;),
CITIGROUP GLOBAL MARKETS, INC. and J.P. MORGAN SECURITIES INC., as
joint lead arrangers and joint bookrunners (together and in such
capacities, the &ldquo;<u>Arrangers</u>&rdquo;), JPMORGAN CHASE
BANK, N.A. (&ldquo;<u>JPMorgan Chase Bank</u>&rdquo;), as
syndication agent (in such capacity, the &ldquo;<u>Syndication
Agent</u>&rdquo;), BARCLAYS BANK PLC, BNP PARIBAS and DEUTSCHE BANK
SECURITIES INC., as documentation agents (together and in such
capacities, the &ldquo;<u>Documentation Agents</u>&rdquo;), and
CITICORP NORTH AMERICA, INC. (&ldquo;<u>Citicorp</u>&rdquo;), as
administrative agent (in such capacity, together with any successor
thereto, the &ldquo;<u>Administrative Agent</u>&rdquo;).</p>

<p align="center">
<u>W</u>&nbsp;<u>I</u>&nbsp;<u>T</u>&nbsp;<u>N</u>&nbsp;<u>E</u>&nbsp;<u>
S</u>&nbsp;<u>S</u>&nbsp;<u>E</u>&nbsp;<u>T</u>&nbsp;<u>H</u>:<br />

</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Borrower has requested the Lenders to make available to it the
credit facilities described herein;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the credit facilities made available hereunder consist of
(i)&nbsp;a facility permitting the issuance, for the
Borrower&rsquo;s account, of letters of credit, in an aggregate
face amount at any time outstanding not exceeding $546,000,000, to
provide for payment under energy procurement contracts and
(ii)&nbsp;a facility permitting the issuance, for the
Borrower&rsquo;s account, of letters of credit for purposes other
than energy procurement and revolving credit loans and swingline
loans, in an aggregate face and principal amount at any time
outstanding not exceeding $454,000,000, including loans to repay
the outstanding principal amount of the term loans made to the
Borrower pursuant to the Bond Refunding Loan Agreements (as defined
in Section 1.1); and</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Lenders are willing to make available the credit facilities
described herein upon and subject to the terms and conditions set
forth herein;</p>

<p>NOW THEREFORE, the parties hereto hereby agree as follows:</p>

<p align="center"><a name="_Ref65150001"></a><a name=
"_Toc98641074"></a><a name="_Toc100971118">SECTION 1.&nbsp;
DEFINITIONS</a></p>

<p><a name="_Ref64114080"></a><a name="_Toc98641075"></a><a name=
"_Toc100971119">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1&nbsp;&nbsp;<u>
Defined Terms</u></a>.&nbsp;&nbsp;As used in this Agreement, the
terms listed in this Section 1.1 shall have the respective meanings
set forth in this Section 1.1.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>ABR</u>&rdquo;:&nbsp; for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to
the greater of (a)&nbsp;the Base Rate in effect on such day and
(b)&nbsp;the Federal Funds Effective Rate in effect on such day
<u>plus</u> &frac12; of 1%.&nbsp; For purposes hereof,
&ldquo;<u>Base Rate</u>&rdquo; shall mean the rate of interest per
annum publicly announced from time to time by the Administrative
Agent as its base rate in effect at its principal office in New
York City (the Base Rate not being intended to be the lowest rate
of interest charged by the Administrative Agent in connection with
extensions of credit to debtors).&nbsp; Any change in the ABR due
to a change in the Base Rate or the Federal Funds Effective Rate
shall be effective as of the opening of business on the effective
day of such change in the Base Rate or the Federal Funds Effective
Rate, respectively.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>ABR Loans</u>&rdquo;:&nbsp; Loans the rate of interest
applicable to which is based upon the ABR.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Act</u>&rdquo;:&nbsp; as defined in Section 10.17.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Administrative Agent</u>&rdquo;:&nbsp; as defined in the
preamble hereto.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Agents</u>&rdquo;:&nbsp; the collective reference to the
Syndication Agent, the Documentation Agents and the Administrative
Agent.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Agreement</u>&rdquo;:&nbsp; as defined in the preamble
hereto.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Applicable Margin</u>&rdquo;:&nbsp; for any day, the
applicable rate per annum set forth under the relevant column
heading below, based upon the Ratings then in effect:</p>

<div align="center">
<table border="1" cellspacing="0" cellpadding="0">
<tr>
<td valign="bottom">
<p>Level</p>
</td>
<td valign="bottom">
<p>Rating<br />
 S&amp;P/Moody&rsquo;s</p>
</td>
<td valign="bottom">
<p>Applicable Margin<br />
 for<br />
 ABR Loans</p>
</td>
<td valign="bottom">
<p>Applicable Margin<br />
 for<br />
 Eurodollar Loans</p>
</td>
</tr>

<tr>
<td>
<p align="center">1</p>
</td>
<td>
<p>A/A2 or higher</p>
</td>
<td>
<p>0%</p>
</td>
<td>
<p>0.220%</p>
</td>
</tr>

<tr>
<td>
<p align="center">2</p>
</td>
<td>
<p>A-/A3</p>
</td>
<td>
<p align="center">0%</p>
</td>
<td>
<p align="center">0.300%</p>
</td>
</tr>

<tr>
<td>
<p align="center">3</p>
</td>
<td>
<p align="center">BBB+/Baa1</p>
</td>
<td>
<p align="center">0%</p>
</td>
<td>
<p align="center">0.350%</p>
</td>
</tr>

<tr>
<td>
<p align="center">4</p>
</td>
<td>
<p align="center">BBB/Baa2</p>
</td>
<td>
<p align="center">0%</p>
</td>
<td>
<p align="center">0.425%</p>
</td>
</tr>

<tr>
<td>
<p align="center">5</p>
</td>
<td>
<p align="center">BBB-/Baa3</p>
</td>
<td>
<p align="center">0%</p>
</td>
<td>
<p align="center">0.575%</p>
</td>
</tr>

<tr>
<td>
<p align="center">6</p>
</td>
<td>
<p align="center">BB+/Ba1 or lower</p>
</td>
<td>
<p align="center">0%</p>
</td>
<td>
<p align="center">0.675%</p>
</td>
</tr>
</table>
</div>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to the provisions of this paragraph regarding split ratings,
changes in the Applicable Margins shall become effective on the
date on which S&amp;P and/or Moody&rsquo;s changes its relevant
Rating.&nbsp; In the event the Ratings of S&amp;P and Moody&rsquo;s
are in different levels set forth in the grid above, the higher of
the two Ratings (<u>i</u>.<u>e</u>., the Rating set forth in the
grid above opposite the lower numerical level number) shall
govern.&nbsp; In the event that, at any time, a Rating is not
available from one of such rating agencies, the Applicable Margins
shall be determined on the basis of the Rating from the other
rating agency. In the event that, at any time, Ratings from each
such rating agency are not available for companies generally, the
Applicable Margins shall be determined on the basis of the last
Rating(s) made available.&nbsp; In the event that, at any time,
such Ratings are not available for the Borrower but are generally
available for other companies, then the Applicable Margins shall be
those set forth above opposite level 6.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Application</u>&rdquo;:&nbsp; an application, in such
form as the relevant Issuing Lender may reasonably specify from
time to time, requesting such Issuing Lender to issue a Letter of
Credit.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Arrangers</u>&rdquo;:&nbsp; as defined in the preamble
hereto.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Assignee</u>&rdquo;:&nbsp; as defined in Section
10.6(b).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Assignment and Assumption</u>&rdquo;:&nbsp; an Assignment
and Assumption, substantially in the form of Exhibit&nbsp;F.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Available Commitment</u>&rdquo;:&nbsp; as to any Lender
at any time, an amount equal to the excess, if any, of
(a)&nbsp;such Lender&rsquo;s Commitment then in effect <u>over</u>
(b)&nbsp;such Lender&rsquo;s Extensions of Credit then
outstanding.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Beneficial Owner</u>&rdquo;:&nbsp; as defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in
calculating the beneficial ownership of any particular
&ldquo;person&rdquo; (as that term is used in Sections 13(d) and
14(d) of the Exchange Act), such &ldquo;person&rdquo; will be
deemed to have beneficial ownership of all securities that such
&ldquo;person&rdquo; has the right to acquire by conversion or
exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a
subsequent condition. The terms &ldquo;Beneficially Owns&rdquo; and
&ldquo;Beneficially Owned&rdquo; have correlative meanings.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Benefitted Lender</u>&rdquo;:&nbsp; as defined in
Section&nbsp;10.7(a).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Board</u>&rdquo;:&nbsp; the Board of Governors of the
Federal Reserve System of the United States (or any successor).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Bond Delivery Agreement</u>&rdquo;:&nbsp; the Bond
Delivery Agreement to be executed by the Borrower and the
Administrative Agent, substantially in the form of
Exhibit&nbsp;A.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Bond Fund Loan Agreements</u>&rdquo;: means (a) the Bond
Refunding Loan Agreement (1996 Series B), dated as of April 12,
2004, by and among the Borrower, the lenders named therein,
JPMorgan Chase Bank, as Administrative Agent, and Citicorp, as
Syndication Agent, (b) the Bond Refunding Loan Agreement (1996
Series D), dated as of April 12, 2004, by and among the Borrower,
the lenders named therein, JPMorgan Chase Bank, as Administrative
Agent, and Citicorp, as Syndication Agent, (c) the Bond Refunding
Loan Agreement (1997 Series A), dated as of April 12, 2004, by and
among the Borrower, the lenders named therein, JPMorgan Chase Bank,
as Administrative Agent, and Citicorp, as Syndication Agent, and
(d) the Bond Refunding Loan Agreement (1997 Series C), dated as of
April 12, 2004, by and among the Borrower, the lenders named
therein, JPMorgan Chase Bank, as Administrative Agent, and
Citicorp, as Syndication Agent.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Bond Maturity Date</u>&rdquo; means April 8, 2010; and if
such date is extended from time to time pursuant to
Section&nbsp;2.7(g), &ldquo;Bond Maturity Date&rdquo; shall mean
such extended date.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Borrower</u>&rdquo;:&nbsp; as defined in the preamble
hereto.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Borrowing Date</u>&rdquo;:&nbsp; any Business Day
specified by the Borrower as a date on which the Borrower requests
the Lenders to make Loans hereunder.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Business</u>&rdquo;:&nbsp; as defined in Section
4.13(b)&nbsp;.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Business Day</u>&rdquo;:&nbsp; a day other than a
Saturday, Sunday or other day on which commercial banks in New York
City or San Francisco, California are authorized or required by law
to close, <u>provided</u>, that with respect to notices and
determinations in connection with, and payments of principal and
interest on, Eurodollar Loans, such day is also a day for trading
by and between banks in Dollar deposits in the London interbank
eurodollar market.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Capital Stock</u>&rdquo;:&nbsp; any and all shares,
interests, participations or other equivalents (however designated)
of capital stock of a corporation, any and all equivalent ownership
interests in a Person (other than a corporation) and any and all
warrants, rights or options to purchase any of the foregoing.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Change of Control</u>&rdquo;:&nbsp; PCG and its
Subsidiaries shall at any time not be the Beneficial Owner,
directly or indirectly, of at least 80% of the common stock or 70%
of the voting Capital Stock of the Borrower; <u>provided</u> that
any such event shall not constitute a Change of Control if, after
giving effect to such event, the Borrower&rsquo;s senior,
unsecured, non credit-enhanced debt ratings shall be at least the
higher of (1) Baa3 from Moody&rsquo;s <u>and</u> BBB- from S&amp;P
and (2)&nbsp;the ratings by such rating agencies of such debt in
effect immediately before the earlier of the occurrence or the
public announcement of such event.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Citicorp</u>&rdquo;: as defined in the preamble
hereto.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Code</u>&rdquo;:&nbsp; the Internal Revenue Code of 1986,
as amended from time to time.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Commitment</u>&rdquo;:&nbsp; as to any Lender, the
obligation of such Lender, if any, to make Revolving Loans and
participate in Swingline Loans and Letters of Credit in an
aggregate principal and/or face amount not to exceed the amount set
forth under the heading &ldquo;Commitment&rdquo; opposite such
Lender&rsquo;s name on <u>Schedule&nbsp;1.1A</u> or in the
Assignment and Assumption or New Lender Supplement pursuant to
which such Lender became a party hereto, as the same may be changed
from time to time pursuant to the terms hereof.&nbsp; The original
amount of the Total Commitments is $1,000,000,000.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Commitment Increase Notice</u>&rdquo;:&nbsp; as defined
in Section 2.3(a).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Commitment Increase Supplement</u>&rdquo;:&nbsp; as
defined in Section 2.3(c).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Commitment Period</u>&rdquo;:&nbsp; the period from and
including the Effective Date to the Termination Date.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Commonly Controlled Entity</u>&rdquo;:&nbsp; an entity,
whether or not incorporated, that is under common control with the
Borrower within the meaning of Section&nbsp;4001 of ERISA or is
part of a group that includes the Borrower and that is treated as a
single employer under Section&nbsp;414 of the Code.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Compliance Certificate</u>&rdquo;:&nbsp; a certificate
duly executed by a Responsible Officer substantially in the form of
Exhibit&nbsp;D.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Conduit Lender</u>&rdquo;:&nbsp; any special purpose
corporation organized and administered by any Lender for the
purpose of making Loans otherwise required to be made by such
Lender and designated by such Lender in a written instrument;
<u>provided</u>, that the designation by any Lender of a Conduit
Lender shall not relieve the designating Lender of any of its
obligations to fund a Loan under this Agreement if, for any reason,
its Conduit Lender fails to fund any such Loan, and the designating
Lender (and not the Conduit Lender) shall have the sole right and
responsibility to deliver all consents and waivers required or
requested under this Agreement with respect to its Conduit Lender,
and <u>provided</u>, <u>further</u>, that no Conduit Lender shall
(a)&nbsp;be entitled to receive any greater amount pursuant to
Section&nbsp;2.15, 2.16, 2.17 or 10.5 than the designating Lender
would have been entitled to receive in respect of the extensions of
credit made by such Conduit Lender or (b)&nbsp;be deemed to have
any Commitment.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Consolidated Capitalization</u>&rdquo;: on any date of
determination, the sum of (a)&nbsp;Consolidated Total Debt on such
date <u>plus</u> (b)&nbsp;without duplication, the amount set forth
opposite the caption &ldquo;shareholders&rsquo; equity&rdquo; (or
any similar caption) on the consolidated balance sheet, prepared in
accordance with GAAP, of the Borrower and its Subsidiaries as of
such date.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Consolidated Capitalization Ratio</u>&rdquo; means, on
any date of determination, the ratio of (a)&nbsp;Consolidated Total
Debt to (b)&nbsp;Consolidated Capitalization.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Consolidated Total Debt</u>&rdquo;:&nbsp; at any date,
the aggregate principal amount of all obligations of the Borrower
and its Significant Subsidiaries at such date that in accordance
with GAAP would be classified as debt on a consolidated balance
sheet of the Borrower, and without duplication all Guarantee
Obligations of the Borrower and its Significant Subsidiaries at
such date in respect of obligations of any other Person that in
accordance with GAAP would be classified as debt on a consolidated
balance sheet of such Person; <u>provided</u> that, the
determination of &ldquo;Consolidated Total Debt&rdquo; shall
exclude (a) the Securitized Bonds and (b)&nbsp;Indebtedness of the
Borrower and its Significant Subsidiaries in an amount equal to the
amount of cash held as cash collateral for any fully cash
collateralized letter of credit issued for the account of the
Borrower or any Significant Subsidiary.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Continuing Lender</u>&rdquo;:&nbsp; as defined in Section
2.7.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Contractual Obligation</u>&rdquo;:&nbsp; as to any
Person, any provision of any security issued by such Person or of
any agreement, instrument or other undertaking to which such Person
is a party or by which it or any of its property is bound.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>CPUC</u>&rdquo;:&nbsp; the California Public Utilities
Commission or its successor.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Credit Event</u>&rdquo;:&nbsp; as defined in Section
5.2.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Default</u>&rdquo;:&nbsp; any of the events specified in
Section 8, whether or not any requirement for the giving of notice,
the lapse of time, or both, has been satisfied.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Disposition</u>&rdquo;:&nbsp; with respect to any
property, any sale, lease, sale and leaseback, assignment,
conveyance, transfer or other disposition thereof.&nbsp; The terms
&ldquo;<u>Dispose</u>&rdquo; and &ldquo;<u>Disposed of</u>&rdquo;
shall have correlative meanings.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Documentation Agents</u>&rdquo;:&nbsp; as defined in the
preamble hereto.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Dollars</u>&rdquo; and &ldquo;<u>$</u>&rdquo;:&nbsp;
dollars in lawful currency of the United States.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Effective Date</u>&rdquo;: the date on which the
conditions precedent set forth in Section&nbsp;5.1 shall have been
satisfied or waived.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Eligible Assignee</u>&rdquo;: (a)&nbsp;any commercial
bank or other financial institution having a senior unsecured debt
rating by Moody&rsquo;s of A3 or better and by S&amp;P of A- or
better, which is domiciled in a country which is a member of the
OECD or (b)&nbsp;with respect to any Person referred to in the
preceding clause&nbsp;(a), any other Person that is engaged in
making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of business all of the
Capital Stock of which is owned, directly or indirectly, by such
Person; <u>provided</u> that in the case of clause (b), the
Borrower and the Issuing Lender shall have consented to the
designation of such Person as an Eligible Assignee (such consent of
the Borrower not to be unreasonably withheld).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Environmental Laws</u>&rdquo;:&nbsp; any and all foreign,
Federal, state, local or municipal laws, rules, orders,
regulations, statutes, ordinances, codes, decrees, requirements of
any Governmental Authority or other Requirements of Law (including
common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the
environment, as now or may at any time hereafter be in effect.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>ERISA</u>&rdquo;:&nbsp; the Employee Retirement Income
Security Act of 1974, as amended from time to time.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Escrow Deposit and Disbursement Agreement</u>&rdquo;: an
Escrow Deposit Agreement and Disbursement Agreement, substantially
in the form of Exhibit K.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Eurocurrency Liabilities</u>&rdquo;:&nbsp; as defined in
Regulation&nbsp;D of the Board.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Eurocurrency Reserve Requirements</u>&rdquo;:&nbsp; of
any Lender for any Interest Period as applied to a Eurodollar Loan,
the reserve percentage applicable during such Interest Period (or
if more than one such percentage shall be so applicable, the daily
average of such percentages for those days in such Interest Period
during any such percentage shall be so applicable) under any
regulations of the Board or other Governmental Authority having
jurisdiction with respect to determining the maximum reserve
requirement (including basic, supplemental and emergency reserves)
for such Lender with respect to liabilities or assets consisting of
or including Eurocurrency Liabilities having a term equal to such
Interest Period.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Eurodollar Base Rate</u>&rdquo;:&nbsp; with respect to
each day during each Interest Period pertaining to a Eurodollar
Loan, the rate per annum determined on the basis of the rate for
deposits in Dollars for a period equal to such Interest Period
commencing on the first day of such Interest Period appearing on
Page&nbsp;3750 of the Telerate screen as of 11:00&nbsp;A.M., London
time, two Business Days prior to the beginning of such Interest
Period.&nbsp; In the event that such rate does not appear on
Page&nbsp;3750 of the Telerate screen (or otherwise on such
screen), the &ldquo;<u>Eurodollar Base Rate</u>&rdquo; shall be
determined by reference to such other comparable publicly available
service for displaying eurodollar rates as may be selected by the
Administrative Agent or, in the absence of such availability, by
reference to the rate at which the Administrative Agent is offered
Dollar deposits at or about 11:00&nbsp;A.M., New York City time,
two Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where its eurodollar and foreign
currency and exchange operations are then being conducted for
delivery on the first day of such Interest Period for the number of
days comprised therein.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Eurodollar Loans</u>&rdquo;:&nbsp; Loans the rate of
interest applicable to which is based upon the Eurodollar Rate.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Eurodollar Rate</u>&rdquo;:&nbsp; with respect to each
day during each Interest Period pertaining to a Eurodollar Loan, a
rate per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100<sup>th</sup>
of&nbsp;1%):<br>
</p>

<div align="center">

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p align="center"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Eurodollar Base Rate&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<center>

<tr>
<td valign="bottom">
<p>1.00 - Eurocurrency Reserve Requirements</p>

</td>
</tr>
</table>

  </center>
</div>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Eurodollar Tranche</u>&rdquo;:&nbsp; the collective
reference to Eurodollar Loans the then current Interest Periods
with respect to all of which begin on the same date and end on the
same later date (whether or not such Loans shall originally have
been made on the same day).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Event of Default</u>&rdquo;:&nbsp; any of the events
specified in Section 8, <u>provided</u> that any requirement for
the giving of notice, the lapse of time, or both, has been
satisfied.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Exchange Act</u>&rdquo;:&nbsp; Securities Exchange Act of
1934, as amended.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Existing Credit Agreement</u>&rdquo;:&nbsp; the Credit
Agreement, dated as of March 5, 2004, among the Borrower, the
lenders parties thereto, the syndication agent and co-documentation
agents named therein and Citicorp, as administrative agent.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Existing Issuing Lender</u>&rdquo;:&nbsp; JPMorgan Chase
Bank, N.A. (successor by merger to Bank One, NA).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Existing Letters of Credit</u>&rdquo;:&nbsp; each of the
letters of credit issued by the Existing Issuing Lender under the
Existing Credit Agreement and outstanding on the Effective
Date.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Extension Notice</u>&rdquo;:&nbsp; as defined in
Section&nbsp;2.7(b).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Extensions of Credit</u>&rdquo;:&nbsp; as to any Lender
at any time, an amount equal to the sum of (a)&nbsp;the aggregate
principal amount of all Revolving Loans held by such Lender then
outstanding, (b)&nbsp;such Lender&rsquo;s Percentage of the L/C
Obligations then outstanding and (c)&nbsp;such Lender&rsquo;s
Percentage of the aggregate principal amount of Swingline Loans
then outstanding.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Facility Fee Rate</u>&rdquo;:&nbsp; for any day, the rate
per annum determined pursuant to the grid set forth below, based
upon the Ratings then in effect:</p>

<div align="center">
<table border="1" cellspacing="0" cellpadding="0">
<tr>
<td valign="bottom">
<p align="center">Level</p>
</td>
<td valign="bottom">
<p align="center">Rating<br />
 S&amp;P/Moody&rsquo;s</p>
</td>
<td valign="bottom">
<p align="center">Facility Fee Rate</p>
</td>
<td>
<p>&nbsp;</p>
</td>
</tr>

<tr>
<td>
<p align="center">1</p>
</td>
<td>
<p align="center">A/A2 or higher</p>
</td>
<td colspan="2">
<p align="center">0.080%</p>
</td>
</tr>

<tr>
<td>
<p align="center">2</p>
</td>
<td>
<p align="center">A-/A3</p>
</td>
<td colspan="2">
<p align="center">0.100%</p>
</td>
</tr>

<tr>
<td>
<p align="center">3</p>
</td>
<td>
<p align="center">BBB+/Baa1</p>
</td>
<td colspan="2">
<p align="center">0.125%</p>
</td>
</tr>

<tr>
<td>
<p align="center">4</p>
</td>
<td>
<p align="center">BBB/Baa2</p>
</td>
<td colspan="2">
<p align="center">0.150%</p>
</td>
</tr>

<tr>
<td>
<p align="center">5</p>
</td>
<td>
<p align="center">BBB-/Baa3</p>
</td>
<td colspan="2">
<p align="center">0.175%</p>
</td>
</tr>

<tr>
<td>
<p align="center">6</p>
</td>
<td>
<p align="center">BB+/Ba1 or lower</p>
</td>
<td colspan="2">
<p align="center">0.200%</p>
</td>
</tr>
</table>
</div>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to the provisions of this paragraph regarding split ratings,
changes in the Facility Fee Rate shall become effective on the date
on which S&amp;P and/or Moody&rsquo;s changes its relevant
Rating.&nbsp; In the event the Ratings of S&amp;P and Moody&rsquo;s
are in different levels set forth in the grid above, the higher of
the two Ratings (<u>i.e</u>., the Rating set forth in the grid
above opposite the lower numerical level number) shall
govern.&nbsp; In the event that, at any time, a Rating is not
available from one of such rating agencies, the Facility Fee Rate
shall be determined on the basis of the Rating from the other
rating agency. In the event that, at any time, Ratings from each
such rating agency are not available for companies generally, the
Facility Fee Rate shall be determined on the basis of the last
Rating(s) made available.&nbsp; In the event that, at any time,
such Ratings are not available for the Borrower but are generally
available for other companies, then the Facility Fee Rate shall be
that set forth above opposite level 6.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Federal Funds Effective Rate</u>&rdquo;:&nbsp; for any
day, the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New&nbsp;York, or, if such rate
is not so published for any day that is a Business Day, the average
of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized
standing selected by it.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Fee Payment Date</u>&rdquo;:&nbsp; (a)&nbsp;the third
Business Day following the last day of each March, June, September
and December during the Commitment Period, (b)&nbsp;the last day of
the Commitment Period and (c)&nbsp;the last day of each March,
June, September and December after the last day of the Commitment
Period, so long as any principal amount of the Loans or any
Reimbursement Obligations remain outstanding after the last day of
the Commitment Period.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>FPA</u>&rdquo;:&nbsp; the Federal Power Act, as amended,
and the rules and regulations promulgated thereunder.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Funding Office</u>&rdquo;:&nbsp; the office of the
Administrative Agent specified in Section&nbsp; 10.2 or such other
office as may be specified from time to time by the Administrative
Agent as its funding office by written notice to the Borrower and
the Lenders.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>GAAP</u>&rdquo;:&nbsp; generally accepted accounting
principles in the United States as in effect from time to time,
except as noted below.&nbsp; In the event that any &ldquo;Change in
Accounting Principles&rdquo; (as defined below) shall occur and
such change results in a change in the method of calculation of
financial covenants, standards or terms in this Agreement, then,
upon the request of the Borrower or the Required Lenders, the
Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so
as to reflect equitably such Change in Accounting Principles with
the desired result that the criteria for evaluating the
Borrower&rsquo;s financial condition shall be the same after such
Change in Accounting Principles as if such Change in Accounting
Principles had not been made.&nbsp; Until such time as such an
amendment shall have been executed and delivered by the Borrower,
the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to
be calculated or construed as if such Change in Accounting
Principles had not occurred.&nbsp; &ldquo;<u>Change in Accounting
Principles</u>&rdquo; refers to changes in accounting principles
required by the promulgation of any rule, regulation, pronouncement
or opinion by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants or any successor
thereto, the SEC or, if applicable, the Public Company Accounting
Oversight Board.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Governmental Authority</u>&rdquo;:&nbsp; any nation or
government, any state or other political subdivision thereof, any
agency, authority, instrumentality, regulatory body, court, central
bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative functions of or pertaining to
government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance
Commissioners).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Guarantee Obligation</u>&rdquo;:&nbsp; as to any Person
(the &ldquo;<u>guaranteeing person</u>&rdquo;), any obligation,
including a reimbursement, counterindemnity or similar obligation,
of the guaranteeing person that guarantees any Indebtedness,
leases, dividends or other obligations (the &ldquo;<u>primary
obligations</u>&rdquo;) of any other third Person (the
&ldquo;<u>primary obligor</u>&rdquo;) in any manner, whether
directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i)&nbsp;to
purchase any such primary obligation or any property constituting
direct or indirect security therefor, (ii)&nbsp;to advance or
supply funds (1)&nbsp;for the purchase or payment of any such
primary obligation or (2)&nbsp;to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii)&nbsp;to
purchase property, securities or services primarily for the purpose
of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation,
(iv)&nbsp;otherwise to assure or hold harmless the owner of any
such primary obligation against loss in respect thereof or
(v)&nbsp;to reimburse or indemnify an issuer of a letter of credit,
surety bond or guarantee issued by such issuer in respect of
primary obligations of a primary obligor other than the Borrower or
any Significant Subsidiary; <u>provided</u>, <u>however</u>, that
the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of
business.&nbsp; The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a)&nbsp;an
amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made
and (b)&nbsp;the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying
such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are
not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person&rsquo;s
reasonably anticipated liability in respect thereof as determined
by the Borrower in good faith.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Indebtedness</u>&rdquo;:&nbsp; of any Person at any date,
without duplication, (a)&nbsp;all indebtedness of such Person for
borrowed money, (b)&nbsp;all obligations of such Person for the
deferred purchase price of property or services (other than trade
payables, including under energy procurement and transportation
contracts, incurred in the ordinary course of such Person&rsquo;s
business), (c)&nbsp;all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments, (d)&nbsp;all
indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to
repossession or sale of such property), (e)&nbsp;all obligations of
such Person as lessee which are capitalized in accordance with
GAAP, (f)&nbsp;all obligations of such Person, contingent or
otherwise, as an account party or applicant under or in respect of
acceptances, letters of credit, surety bonds or similar
arrangements (other than reimbursement obligations, which are not
due and payable on such date, in respect of documentary letters of
credit issued to provide for the payment of goods and services in
the ordinary course of business), (g)&nbsp;the liquidation value of
all mandatorily redeemable preferred Capital Stock of such Person,
(h)&nbsp;all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses&nbsp;(a) through (g)
above, (i)&nbsp;all obligations of the kind referred to in
clauses&nbsp;(a) through (h) above secured by (or for which the
holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including
accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such
obligation (<u>provided</u>, that if such Person is not liable for
such obligation, the amount of such Person&rsquo;s Indebtedness
with respect thereto shall be deemed to be the lesser of the stated
amount of such obligation and the value of the property subject to
such Lien), and (j)&nbsp;for the purposes of Section 8(e) only, all
obligations of such Person in respect of Swap Agreements,
<u>provided</u> that Indebtedness as used in this Agreement shall
exclude any Non-Recourse Debt.&nbsp; The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such
Person&rsquo;s ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness
expressly provide that such Person is not liable therefor.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Indenture</u>&rdquo;:&nbsp; the Indenture of Mortgage,
dated as of March 11, 2004, between the Borrower and the Indenture
Trustee, as supplemented by the First Supplemental Indenture, dated
as of March 23, 2004 and the Second Supplemental Indenture, dated
as of April 12, 2004.</p>

<p><a name=
"_DV_M181"></a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Indenture Trustee</u>&rdquo;:&nbsp; The Bank of New York
Trust Company, N.A., as successor to BNY Western Trust Company, and
any successor thereto as trustee under the Indenture.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Information Memorandum</u>&rdquo;:&nbsp; the Information
Memorandum dated March 2005, and furnished to certain Lenders in
connection with the syndication of the Commitments, as supplemented
by each and all Specified Exchange Act Filings filed by the
Borrower during the period from March 15, 2005 through the date of
this Agreement.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Insolvency</u>&rdquo;:&nbsp; with respect to any
Multiemployer Plan, the condition that such Plan is insolvent
within the meaning of Section&nbsp;4245 of ERISA.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Insolvent</u>&rdquo;:&nbsp; pertaining to a condition of
Insolvency.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Interest Payment Date</u>&rdquo;:&nbsp; (a)&nbsp;as to
any ABR Loan (other than any Swingline Loan), the last day of each
March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b)&nbsp;as
to any Eurodollar Loan having an Interest Period of three months or
less, the last day of such Interest Period, (c)&nbsp;as to any
Eurodollar Loan having an Interest Period longer than three months,
each day that is three months, or a whole multiple thereof, after
the first day of such Interest Period and the last day of such
Interest Period, (d)&nbsp;as to any Eurodollar Loan, the date of
any repayment or prepayment made in respect thereof and (e)&nbsp;as
to any Swingline Loan, the day that such Loan is required to be
repaid.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Interest Period</u>&rdquo;:&nbsp; as to any Eurodollar
Loan, (a)&nbsp;initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three or six or (if available
to all Lenders) nine or twelve months thereafter, as selected by
the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and
(b)&nbsp;thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan
and ending one, two, three or six or (if available to all Lenders)
nine or twelve months thereafter, as selected by the Borrower by
irrevocable notice to the Administrative Agent not later than
12:00&nbsp;Noon, New York City time, on the date that is three
Business Days prior to the last day of the then current Interest
Period with respect thereto; <u>provided</u> that, all of the
foregoing provisions relating to Interest Periods are subject to
the following:</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;&nbsp;the Borrower may not select an Interest Period that
would extend beyond the Termination Date;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iii)&nbsp;&nbsp;any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of a
calendar month; and</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iv)&nbsp;&nbsp;the Borrower shall select Interest Periods so as
not to require a payment or prepayment of any Eurodollar Loan
during an Interest Period for such Loan.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Issuing Lender</u>&rdquo;:&nbsp; (a) in respect of the
Existing Letters of Credit, the Existing Issuing Lender and (b) in
respect of any Letters of Credit issued hereunder on or after the
Effective Date, (i) JPMorgan Chase Bank or any affiliate thereof
selected by JPMorgan Chase Bank with the consent of the Borrower
(such consent not to be unreasonably withheld) and (ii)&nbsp;any
other Lender selected by the Borrower as an Issuing Lender with the
consent of such Lender and the Administrative Agent.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>L/C Commitment</u>&rdquo;:&nbsp; $600,000,000.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>L/C Obligations</u>&rdquo;:&nbsp; at any time, an amount
equal to the sum of (a)&nbsp;the aggregate then undrawn and
unexpired amount of the then outstanding Letters of Credit and
(b)&nbsp;the aggregate amount of drawings under issued Letters of
Credit that have not then been reimbursed pursuant to
Section&nbsp;3.5.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>L/C Participants</u>&rdquo;:&nbsp; in respect of any
Letter of Credit, the collective reference to all the Lenders other
than the Issuing Lender that issued such Letter of Credit.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Lenders</u>&rdquo;:&nbsp; as defined in the preamble
hereto; <u>provided</u>, that unless the context otherwise
requires, each reference herein to the Lenders shall be deemed to
include any Conduit Lender.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Letters of Credit</u>&rdquo;:&nbsp; as defined in
Section&nbsp;3.1.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Lien</u>&rdquo;:&nbsp; any mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), charge or other security interest or any
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital
lease having substantially the same economic effect as any of the
foregoing).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Loan</u>&rdquo;:&nbsp; any loan made by any Lender
pursuant to this Agreement, including Swingline Loans and Revolving
Loans.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Loan Documents</u>&rdquo;:&nbsp; (i)&nbsp;this Agreement,
the Notes and the Applications and (ii)&nbsp;prior to the Release
Date, the Bond Delivery Agreement, the Senior Bond and the
Indenture and, in each case, any amendment, waiver, supplement or
other modification to any of the foregoing, <u>provided</u> that,
the term &ldquo;Loan Documents&rdquo; shall not include the
Indenture for the purposes of Section 8 and 10.1.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Material Adverse Effect</u>&rdquo;:&nbsp; (a)&nbsp;a
change in the business, property, operations or financial condition
of the Borrower and its Subsidiaries taken as a whole that could
reasonably be expected to materially and adversely affect the
Borrower&rsquo;s ability to perform its obligations under the Loan
Documents or (b) a material adverse effect on the validity or
enforceability of this Agreement or any of the other Loan
Documents.&nbsp;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Materials of Environmental Concern</u>&rdquo;:&nbsp; any
gasoline or petroleum (including crude oil or any fraction thereof)
or petroleum products or any hazardous or toxic substances,
materials or wastes, defined or regulated as such in or under any
Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Moody&rsquo;s</u>&rdquo;: Moody&rsquo;s Investors
Service, Inc.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Mortgaged Property</u>&rdquo;:&nbsp; as defined in the
Indenture.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Multiemployer Plan</u>&rdquo;:&nbsp; a Plan that is a
multiemployer plan as defined in Section&nbsp;4001(a)(3) of
ERISA.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>New Lender Supplement</u>&rdquo;:&nbsp; as defined in
Section 2.3(b).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>New Revolving Credit Lender</u>&rdquo;:&nbsp; as defined
in Section 2.3(b).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Non-Excluded Taxes</u>&rdquo;:&nbsp; as defined in
Section&nbsp;2.16(a).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Non-Extending Lender</u>&rdquo;:&nbsp; as defined in
Section&nbsp;2.7.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Non-Procurement Facility Limit</u>&rdquo;:&nbsp;
$454,000,000.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Non-Procurement Letter of Credit</u>&rdquo;: a Letter of
Credit issued for any purpose other than energy procurement.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Non-Recourse Debt</u>&rdquo;:&nbsp; Indebtedness of the
Borrower or any of its Significant Subsidiaries that is incurred in
connection with the acquisition, construction, sale, transfer or
other disposition of specific assets, to the extent recourse,
whether contractual or as a matter of law, for non-payment of such
Indebtedness is limited (a)&nbsp;to such assets, or (b)&nbsp;if
such assets are (or are to be) held by a Subsidiary formed solely
for such purpose, to such Subsidiary or the Capital Stock of such
Subsidiary.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Non-U.S. Lender</u>&rdquo;:&nbsp; as defined in
Section&nbsp;2.16(d).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Notes</u>&rdquo;:&nbsp; as defined in Section
2.14(g).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Obligations</u>&rdquo;:&nbsp; the unpaid principal of and
interest on (including, without limitation, interest accruing after
the maturity of the Loans and Reimbursement Obligations and
interest accruing after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such
proceeding) the Loans, the Reimbursement Obligations and all other
obligations and liabilities of the Borrower to the Administrative
Agent or to the Issuing Lender or to any Lender, whether direct or
indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or
in connection with, this Agreement, any other Loan Document or any
other document made, delivered or given in connection herewith or
therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid
by the Borrower pursuant hereto) or otherwise.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>OECD</u>&rdquo;: the countries constituting the
&ldquo;Contracting Parties&rdquo; to the Convention on the
Organisation For Economic Co-operation and Development, as such
term is defined in Article 4 of such Convention.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Other Taxes</u>&rdquo;:&nbsp; any and all present or
future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Loan
Document.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Participant</u>&rdquo;:&nbsp; as defined in
Section&nbsp;10.6(c).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>PBGC</u>&rdquo;:&nbsp; the Pension Benefit Guaranty
Corporation established pursuant to Subtitle&nbsp;A of
Title&nbsp;IV of ERISA (or any successor).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>PCG</u>&rdquo;:&nbsp; PG&amp;E Corporation, a California
corporation and the holder of approximately 89% of the issued and
outstanding voting Capital Stock of the Borrower.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Percentage</u>&rdquo;:&nbsp; as to any Lender at any
time, the percentage which such Lender&rsquo;s Commitment then
constitutes of the Total Commitments or, at any time after the
Commitments shall have expired or terminated, the percentage which
the aggregate principal amount of such Lender&rsquo;s Revolving
Loans then outstanding constitutes of the aggregate principal
amount of the Revolving Loans then outstanding, <u>provided</u>,
that, in the event that the Revolving Loans are paid in full prior
to the reduction to zero of the Total Extensions of Credit, the
Percentages shall be determined in a manner designed to ensure that
the other outstanding Extensions of Credit shall be held by the
Lenders on a comparable basis.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Person</u>&rdquo;:&nbsp; an individual, partnership,
corporation, limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Plan</u>&rdquo;:&nbsp; at a particular time, any employee
benefit plan that is covered by ERISA and in respect of which the
Borrower or a Commonly Controlled Entity is (or, if such plan were
terminated at such time, would under Section&nbsp;4069 of ERISA be
deemed to be) an &ldquo;employer&rdquo; as defined in
Section&nbsp;3(5) of ERISA.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Procurement L/C Facility Limit</u>&rdquo;:&nbsp;
$546,000,000.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Properties</u>&rdquo;:&nbsp; as defined in
Section&nbsp;4.13(a).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>PUHCA</u>&rdquo;: the Public Utility Holding Company Act
of 1935, as amended, and rules and regulations promulgated
thereunder.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Rating</u>&rdquo;: each rating announced by S&amp;P and
Moody&rsquo;s in respect of (a)&nbsp;prior to the Release Date, the
Borrower&rsquo;s senior secured debt and (b)&nbsp;from and after
the Release Date, the Borrower&rsquo;s senior unsecured, non
credit-enhanced debt.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Receivables Facility</u>&rdquo;:&nbsp; the Receivables
Purchase Agreement, dated as of March 5, 2004, among the Borrower,
PG&amp;E Accounts Receivable Company LLC, a Delaware limited
liability company, the Conduit Purchasers party thereto, the
Committed Purchasers party thereto, the Managing Agents party
thereto, and JPMorgan Chase Bank.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Refunded Swingline Loans</u>&rdquo;:&nbsp; as defined in
Section&nbsp;2.5.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Register</u>&rdquo;:&nbsp; as defined in
Section&nbsp;10.6(b).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Regulation&nbsp;U</u>&rdquo;:&nbsp; Regulation&nbsp;U of
the Board as in effect from time to time.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Reimbursement Obligation</u>&rdquo;:&nbsp; the obligation
of the Borrower to reimburse each Issuing Lender pursuant to
Section&nbsp;3.5 for amounts drawn under Letters of Credit issued
by such Issuing Lender.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Release Date</u>&rdquo;:&nbsp; as defined in the
Indenture; <u>provided</u>, that the Release Date may not in any
event be earlier than the date that the Borrower delivers written
evidence pursuant to the Indenture that the ratings of the
Borrower&rsquo;s senior unsecured long-term debt (after giving
<u>pro</u> <u>forma</u> effect to the release of all collateral
securing the Senior Bond Indenture Securities and the other bonds
outstanding under the Indenture) are at least Baa2 from
Moody&rsquo;s <u>and</u> BBB from S&amp;P.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Reorganization</u>&rdquo;:&nbsp; with respect to any
Multiemployer Plan, the condition that such plan is in
reorganization within the meaning of Section&nbsp;4241 of
ERISA.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Reportable Event</u>&rdquo;:&nbsp; any of the events set
forth in Section&nbsp;4043(c) of ERISA, other than those events as
to which the thirty-day notice period is waived under
subsections&nbsp;.27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Reg. &sect;&nbsp;4043.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Required Lenders</u>&rdquo;:&nbsp; at any time, the
holders of more than 50% of the Total Commitments then in effect
or, if the Commitments have been terminated, the Total Extensions
of Credit then outstanding.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Requirement of Law</u>&rdquo;:&nbsp; as to any Person,
the Articles of Incorporation and By-Laws or other organizational
or governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any
of its property is subject.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Responsible Officer</u>&rdquo;:&nbsp; the chief executive
officer, president, chief financial officer, treasurer or assistant
treasurer of the Borrower, but in any event, with respect to
financial matters, the chief financial officer, treasurer or
assistant treasurer of the Borrower.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Revolving Credit Offered Increase
Amount</u>&rdquo;:&nbsp; as defined in Section 2.3(a).</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;<u>Revolving Credit Re-Allocation Date</u>&rdquo;:&nbsp;
as defined in Section 2.3(d).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Revolving Loans</u>&rdquo;:&nbsp; as defined in
Section&nbsp;2.1(a).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>S&amp;P</u>&rdquo;:&nbsp; Standard &amp; Poor&rsquo;s
Ratings Services.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>SEC</u>&rdquo;:&nbsp; the Securities and Exchange
Commission, any successor thereto and any analogous Governmental
Authority.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Securitized Bonds</u>&rdquo;:&nbsp; any securitized bonds
or similar asset-backed securities that are non-recourse to the
Borrower, are issued by a special purpose subsidiary of the
Borrower and are payable from a specific or dedicated rate
component, including the approximately $2,900,000,000 in rate
reduction certificates backed by transition property that were
issued in 1997, the approximately $1,900,000,000 in energy recovery
bonds backed by energy recovery property that the Borrower issued
in February 2005 and the approximately $1,100,000,000 in energy
recovery bonds backed by energy recovery property that the Borrower
expects to be issued by no later than February 2006.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Senior Bond</u>&rdquo;:&nbsp; the bond to be issued by
the Borrower to the Administrative Agent pursuant to the Indenture
on the Effective Date substantially in the form of Exhibit I.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Senior Bond Indenture Securities</u>&rdquo;: the
approximately $5,300,000,000 aggregate principal amount of
outstanding publicly issued securities issued by the Borrower under
the Indenture.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Significant Subsidiary</u>&rdquo;:&nbsp; as defined in
Article 1, Rule&nbsp;1-02(w) of Regulation&nbsp;S-X of the Exchange
Act as of the Effective Date, <u>provided</u> that notwithstanding
the foregoing, none of PG&amp;E Funding LLC, PG&amp;E Accounts
Receivable LLC, PG&amp;E Energy Recovery Funding LLC or any other
special purpose finance subsidiary shall constitute a Significant
Subsidiary.&nbsp; Unless otherwise qualified, all references to a
&ldquo;Significant Subsidiary&rdquo; or to &ldquo;Significant
Subsidiaries&rdquo; in this Agreement shall refer to a Significant
Subsidiary or Significant Subsidiaries of the Borrower.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Single Employer Plan</u>&rdquo;:&nbsp; any Plan that is
covered by Title&nbsp;IV of ERISA, but that is not a Multiemployer
Plan.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Specified Exchange Act Filings</u>&rdquo;:&nbsp; the
Borrower&rsquo;s Form 10-K annual report for the year ended
December 31, 2004 and each and all of the Form 8-Ks (and to the
extent applicable proxy statements) filed by the Borrower or PCG
with the SEC after December 31, 2004 and prior to the date that is
one Business Day before the date of this Agreement.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Subsidiary</u>&rdquo;:&nbsp; as to any Person, a
corporation, partnership, limited liability company or other entity
of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at
the time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both,
by such Person.&nbsp; Unless otherwise qualified, all references to
a &ldquo;Subsidiary&rdquo; or to &ldquo;Subsidiaries&rdquo; in this
Agreement shall refer to a Subsidiary or Subsidiaries of the
Borrower.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Swap Agreement</u>&rdquo;:&nbsp; any agreement with
respect to any swap, forward, future or derivative transaction or
option or similar agreement involving, or settled by reference to,
one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing
indices or measures of economic, financial or pricing risk or value
or any similar transaction or any combination of these
transactions; <u>provided</u> that no phantom stock or similar plan
providing for payments only on account of services provided by
current or former directors, officers, employees or consultants of
the Borrower or any of its Subsidiaries shall be a &ldquo;Swap
Agreement&rdquo;.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Swingline Commitment</u>&rdquo;:&nbsp; the obligation of
the Swingline Lender to make Swingline Loans pursuant to
Section&nbsp;2.4 in an aggregate principal amount at any one time
outstanding not to exceed $100,000,000.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Swingline Lender</u>&rdquo;:&nbsp; Citicorp, in its
capacity as the lender of Swingline Loans.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Swingline Loans</u>&rdquo;:&nbsp; as defined in
Section&nbsp;2.4.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Swingline Participation Amount</u>&rdquo;:&nbsp; as
defined in Section&nbsp;2.5.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Syndication Agent</u>&rdquo;:&nbsp; as defined in the
preamble hereto.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Termination Date</u>&rdquo;:&nbsp; the date that is the
fifth anniversary of the Effective Date or such later date as may
be determined pursuant to Section&nbsp;2.7(b) or such earlier date
as otherwise determined pursuant to Section&nbsp;2.7.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Total Commitments</u>&rdquo;:&nbsp; at any time, the
aggregate amount of the Commitments of all Lenders at such
time.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Total Extensions of Credit</u>&rdquo;:&nbsp; at any time,
the aggregate amount of the Extensions of Credit of all Lenders at
such time.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Transferee</u>&rdquo;:&nbsp; any Assignee or
Participant.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Type</u>&rdquo;:&nbsp; as to any Loan, its nature as an
ABR Loan or a Eurodollar Loan.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>United States</u>&rdquo;:&nbsp; the United States of
America.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&ldquo;<u>Utilization Fee Rate</u>&rdquo;: for any day, the
applicable rate per annum determined pursuant to the grid set forth
below, based upon the Ratings then in effect:</p>

<div align="center">
<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p align="center">Level</p>
</td>
<td valign="top">
<p align="center">Rating<br />
 S&amp;P/Moody&rsquo;s</p>
</td>
<td valign="top">
<p align="center">Utilization Fee</p>

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

<tr>
<td valign="top">
<p align="center">1</p>
</td>
<td>
<p align="center">A/A2 or higher</p>
</td>
<td valign="top">
<p align="center">0.100%</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">2</p>
</td>
<td>
<p align="center">A-/A3</p>
</td>
<td valign="top">
<p align="center">0.100%</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">3</p>
</td>
<td>
<p align="center">BBB+/Baa1</p>
</td>
<td valign="top">
<p align="center">0.125%</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">4</p>
</td>
<td>
<p align="center">BBB/Baa2</p>
</td>
<td valign="top">
<p align="center">0.125%</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">5</p>
</td>
<td>
<p align="center">BBB-/Baa3</p>
</td>
<td valign="top">
<p align="center">0.125%</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">6</p>
</td>
<td>
<p align="center">BB+/Ba1 or lower</p>
</td>
<td valign="top">
<p align="center">0.250%</p>
</td>
</tr>
</table>
</div>

<p></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to the provisions of this paragraph regarding split ratings,
changes in the Utilization Fee Rate shall become effective on the
date on which S&amp;P and/or Moody&rsquo;s changes its relevant
Rating.&nbsp; In the event the Ratings of S&amp;P and Moody&rsquo;s
are in different levels set forth in the grid above, the higher of
the two Ratings (<u>i.e</u>., the Rating set forth in the grid
above opposite the lower numerical level number) shall
govern.&nbsp; In the event that, at any time, a Rating is not
available from one of such rating agencies, the Utilization Fee
Rate shall be determined on the basis of the Rating from the other
rating agency. In the event that, at any time, Ratings from each
such rating agency are not available for companies generally, the
Utilization Fee Rate shall be determined on the basis of the last
Rating(s) made available.&nbsp; In the event that, at any time,
such Ratings are not available for the Borrower but are generally
available for other companies, then the Utilization Fee Rate shall
be that set forth above opposite level 6.</p>

<p><a name="_Toc98641076"></a><a name=
"_Toc100971120">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2&nbsp;
<u>Other Definitional Provisions</u></a>.&nbsp;
(a)&nbsp;&nbsp;Unless otherwise specified therein, all terms
defined in this Agreement shall have the defined meanings when used
in the other Loan Documents or any certificate or other document
made or delivered pursuant hereto or thereto.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp; As used herein and, except as otherwise provided therein,
in the other Loan Documents, and any certificate or other document
made or delivered pursuant hereto or thereto, (i)&nbsp;accounting
terms relating to the Borrower and its Significant Subsidiaries
defined in Section&nbsp;1.1 and accounting terms partly defined in
Section&nbsp;1,1, to the extent not defined, shall have the
respective meanings given to them under GAAP, (ii)&nbsp;the words
&ldquo;include&rdquo;, &ldquo;includes&rdquo; and
&ldquo;including&rdquo; shall be deemed to be followed by the
phrase &ldquo;without limitation&rdquo;, (iii)&nbsp;the word
&ldquo;incur&rdquo; shall be construed to mean incur, create,
issue, assume or become liable in respect of (and the words
&ldquo;incurred&rdquo; and &ldquo;incurrence&rdquo; shall have
correlative meanings), (iv)&nbsp;the words &ldquo;asset&rdquo; and
&ldquo;property&rdquo; shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible
assets and properties, including cash, Capital Stock, securities,
revenues, accounts, leasehold interests and contract rights, and
(v)&nbsp;references to agreements or other Contractual Obligations
shall, unless otherwise specified, be deemed to refer to such
agreements or Contractual Obligations as amended, supplemented,
restated or otherwise modified from time to time.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;The words &ldquo;hereof&rdquo;, &ldquo;herein&rdquo;
and &ldquo;hereunder&rdquo; and words of similar import, when used
in this Agreement, shall refer to this Agreement as a whole and not
to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless
otherwise specified.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;The Borrower shall not be required to perform, nor
shall it be required to guarantee the performance of, any of the
affirmative covenants set forth in Section 6 that apply to any of
its Significant Subsidiaries nor shall any of the Borrower&rsquo;s
Significant Subsidiaries be required to perform, nor shall any of
such Significant Subsidiaries be required to guarantee the
performance of, any of the Borrower&rsquo;s affirmative covenants
set forth in Section 6 or any of the affirmative covenants set
forth in Section 6 that apply to any other Significant Subsidiary;
<u>provided</u>, that nothing in this Section 1.2(e) shall prevent
the occurrence of a Default or an Event of Default arising out of
the Borrower&rsquo;s failure to cause any Significant Subsidiary to
comply with the provisions of this Agreement applicable to such
Significant Subsidiary.</p>

<p align="center"><a name="_Ref64130742"></a><a name=
"_Toc98641077"></a><a name="_Toc100971121">SECTION
2.&nbsp;&nbsp;AMOUNT AND TERMS OF COMMITMENTS</a><br />
</p>

<p><a name="_Ref64470736"></a><a name="_Toc98641078"></a><a name=
"_Toc100971122">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1&nbsp;&nbsp;<u>
Commitments</u></a>.&nbsp;&nbsp;(a)&nbsp;&nbsp;Subject to the terms
and conditions hereof, each Lender severally agrees to make
revolving credit loans (&ldquo;<u>Revolving Loans</u>&rdquo;) to
the Borrower from time to time on or after the Effective Date and
during the Commitment Period in an aggregate principal amount at
any one time outstanding which, when added to such Lender&rsquo;s
Percentage of the sum of (i)&nbsp;the L/C Obligations then
outstanding and (ii)&nbsp;the aggregate principal amount of the
Swingline Loans then outstanding, does not exceed the amount of
such Lender&rsquo;s Commitment; <u>provided</u> that,
(x)&nbsp;subject to Section 10.1, the aggregate outstanding
principal amount of all Loans plus the aggregate outstanding amount
of L/C Obligations in respect of Non-Procurement Letters of Credit
may not at any time exceed the Non-Procurement Facility Limit, (y)
the Total Extensions of Credit may not at any time prior to the
Release Date exceed the outstanding principal amount of the Senior
Bond and (z)&nbsp;after giving effect to the Revolving Loans
requested to be made, the aggregate amount of the Available
Commitments shall not be less than zero.&nbsp; During the
Commitment Period, the Borrower may use the Commitments by
borrowing, prepaying the Revolving Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions
hereof.&nbsp; The Revolving Loans may from time to time be
Eurodollar Loans or ABR Loans, as determined by the Borrower and
notified to the Administrative Agent in accordance with
Sections&nbsp;2.2 and 2.9.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;The Borrower shall repay all outstanding Revolving
Loans on the Termination Date; <u>provided</u> that, prior to the
release of the Senior Bond pursuant to Section&nbsp;10.16, any
principal payment under the Senior Bond shall automatically be
deemed to be an equal principal payment in respect of the Loans
(but any such principal payment under the Senior Bond shall not
reduce the face amount thereof unless such payment is accompanied
by an equal permanent reduction in the Total Commitments).<br />
</p>

<p><a name="_Ref64119091"></a><a name="_Toc98641079"></a><a name=
"_Toc100971123">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2&nbsp;&nbsp;<u>
Procedure for Revolving Loan Borrowing</u></a>.&nbsp;&nbsp;The
Borrower may borrow under the Commitments during the Commitment
Period on any Business Day, <u>provided</u> that the Borrower shall
give the Administrative Agent irrevocable notice (which notice must
be received by the Administrative Agent prior to 12:00&nbsp;Noon,
New York City time, (a)&nbsp;three Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans, or
(b)&nbsp;one Business Day prior to the requested Borrowing Date, in
the case of ABR Loans) specifying (i)&nbsp;the amount and Type of
Revolving Loans to be borrowed, (ii)&nbsp;the requested Borrowing
Date and (iii)&nbsp;in the case of Eurodollar Loans, the respective
amounts of each such Type of Loan and the respective lengths of the
initial Interest Period therefor.&nbsp; Each borrowing under the
Commitments shall be in an amount equal to $1,000,000 or a whole
multiple of $500,000 in excess thereof (or, if the then aggregate
Available Commitments are less than $1,000,000, such lesser
amount); <u>provided</u>, that the Swingline Lender may request, on
behalf of the Borrower, borrowings under the Commitments that are
ABR Loans in other amounts pursuant to Section&nbsp;2.5.&nbsp; Upon
receipt of any such notice from the Borrower, the Administrative
Agent shall promptly notify each Lender thereof.&nbsp; Each Lender
will make the amount of its <i>pro rata</i> share of each borrowing
available to the Administrative Agent for the account of the
Borrower at the Funding Office prior to 12:00&nbsp;Noon, New York
City time, on the Borrowing Date requested by the Borrower in funds
immediately available to the Administrative Agent.&nbsp; Such
borrowing will then be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower on the
books of such office with the aggregate of the amounts made
available to the Administrative Agent by the Lenders and in like
funds as received by the Administrative Agent.</p>

<p><a name="_Toc98641080"></a><a name=
"_Toc100971124">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3&nbsp;&nbsp;<u>
Commitment Increases</u>.</a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;In the event that the Borrower wishes to increase
the Total Commitments at any time when no Default or Event of
Default has occurred and is continuing (or shall result of such
increase) and subject to obtaining all necessary regulatory
approvals, it shall notify the Administrative Agent in writing of
the amount (the &ldquo;<u>Revolving Credit Offered Increase
Amount</u>&rdquo;) of such proposed increase (such notice, a&nbsp;
&ldquo;<u>Commitment Increase Notice</u>&rdquo;) in a minimum
amount equal to $10,000,000.&nbsp; The Borrower shall offer each of
the Lenders the opportunity to provide such Lender&rsquo;s
Percentage of the Revolving Credit Offered Increase Amount, and if
any Lender declines such offer, in whole or in part, the Borrower
may offer such declined amount to (i) other Lenders and/or (ii)
other banks, financial institutions or other entities with the
consent of the Administrative Agent and, unless any such other
bank, financial institution or other entity would qualify as an
Eligible Assignee, the Issuing Lender (which consents of the
Administrative Agent and the Issuing Lender shall not be
unreasonably withheld or delayed).&nbsp; The Commitment Increase
Notice shall specify the Lenders and/or banks, financial
institutions or other entities that will be requested to provide
such Revolving Credit Offered Increase Amount.&nbsp; The Borrower
or, if requested by the Borrower, the Administrative Agent will
notify such Lenders, and/or banks, financial institutions or other
entities of such offer.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;Any additional bank, financial institution or other
entity which the Borrower selects to offer a portion of the
increased Total Commitments and which elects to become a party to
this Agreement and obtain a Commitment in an amount so offered and
accepted by it pursuant to Section&nbsp;2.3(a) shall execute a new
lender supplement (the &ldquo;<u>New Lender Supplement</u>&rdquo;)
with the Borrower, the Issuing Lender and the Administrative Agent,
substantially in the form of Exhibit&nbsp;B, whereupon such bank,
financial institution or other entity (herein called a
&ldquo;<u>New Revolving Credit Lender</u>&rdquo;) shall become a
Lender for all purposes and to the same extent as if originally a
party hereto and shall be bound by and entitled to the benefits of
this Agreement, <u>provided</u> that the Commitment of any such New
Revolving Credit Lender shall be in an amount not less than
$5,000,000.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;Any Lender which accepts an offer to it by the
Borrower to increase its Commitment pursuant to Section&nbsp;2.3(a)
shall, in each case, execute a Commitment Increase Supplement with
the Borrower and the Administrative Agent, substantially in the
form of Exhibit C, whereupon such Lender shall be bound by and
entitled to the benefits of this Agreement with respect to the full
amount of its Commitment as so increased.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;If any bank, financial institution or other entity
becomes a New Revolving Credit Lender pursuant to
Section&nbsp;2.3(b) or any Lender&rsquo;s Commitment is increased
pursuant to Section&nbsp;2.3(c), additional Revolving Loans made on
or after the effectiveness thereof (the &ldquo;<u>Revolving Credit
Re-Allocation Date</u>&rdquo;) shall be made <i>pro rata</i> based
on the Percentages in effect on and after such Revolving Credit
Re-Allocation Date (except to the extent that any such <i>pro
rata</i> borrowings would result in any Lender making an aggregate
principal amount of Revolving Loans in excess of its Commitment, in
which case such excess amount will be allocated to, and made by,
such New Revolving Credit Lenders and/or Lenders with such
increased Commitments to the extent of, and <i>pro rata</i> based
on, their respective Commitments otherwise available for Revolving
Loans), and continuations of Eurodollar Loans outstanding on such
Revolving Credit Re-Allocation Date shall be effected by repayment
of such Eurodollar Loans on the last day of the Interest Period
applicable thereto and the making of new Eurodollar Loans <i>pro
rata</i> based on such new Percentages.&nbsp; In the event that on
any such Revolving Credit Re-Allocation Date there is an unpaid
principal amount of ABR Loans, the Borrower shall make prepayments
thereof and borrowings of ABR Loans so that, after giving effect
thereto, the ABR Loans outstanding are held <i>pro rata</i> based
on such new Percentages.&nbsp; In the event that on any such
Revolving Credit Re-Allocation Date there is an unpaid principal
amount of Eurodollar Loans, such Eurodollar Loans shall remain
outstanding with the respective holders thereof until the
expiration of their respective Interest Periods (unless the
Borrower elects to prepay any thereof in accordance with the
applicable provisions of this Agreement), and interest on and
repayments of such Eurodollar Loans will be paid thereon to the
respective Lenders holding such Eurodollar Loans <i>pro rata</i>
based on the respective principal amounts thereof outstanding.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;Notwithstanding anything to the contrary in this
Section&nbsp;2.3, (i)&nbsp;in no event may the Borrower deliver
more than one Commitment Increase Notice each year, (ii)&nbsp;no
Lender shall have any obligation to increase its Commitment unless
it agrees to do so in its sole discretion and (iii) in no event
shall any transaction effected pursuant to this Section&nbsp;2.3
cause the Total Commitments to exceed $1,500,000,000;
<u>provided</u> that if the Borrower&rsquo;s Receivables Facility
is terminated or expires, no transaction effected pursuant to this
Section 2.3 shall cause the Total Commitments to exceed
$1,850,000,000.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;The Administrative Agent shall have received on or
prior to the Revolving Credit Re-Allocation Date, for the benefit
of the Lenders, (i)&nbsp;a legal opinion of counsel to the Borrower
covering such matters as are customary for transactions of this
type as may be reasonably requested by the Administrative Agent,
which opinions shall be substantially the same, to the extent
appropriate, as the opinions rendered by counsel to the Borrower on
the Effective Date, (ii)&nbsp;certified copies of resolutions of
the board of directors of the Borrower authorizing the Borrower to
borrow the Revolving Credit Offered Increase Amount and (iii) prior
to the Release Date and upon the Administrative Agent&rsquo;s
delivery to the Borrower of the existing Senior Bond, a new Senior
Bond, with a face amount equal to the Total Commitments, as
increased pursuant to this Section 2.3.</p>

<p><a name="_Ref64118602"></a><a name="_Ref64130669"></a><a name=
"_Toc98641081"></a><a name=
"_Toc100971125">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4&nbsp;&nbsp;<u>
Swingline Commitment</u></a>.&nbsp;&nbsp;(a)&nbsp;&nbsp;Subject to
the terms and conditions hereof, the Swingline Lender agrees to
make a portion of the credit otherwise available to the Borrower
under the Commitments from time to time on or after the Effective
Date during the Commitment Period by making swingline loans
(&ldquo;Swingline Loans&rdquo;) to the Borrower; provided that
(i)&nbsp;the aggregate principal amount of Swingline Loans
outstanding at any time shall not exceed the Swingline Commitment
then in effect (notwithstanding that the Swingline Loans
outstanding at any time, when aggregated with the Swingline
Lender&rsquo;s other outstanding Revolving Loans, may exceed the
Swingline Commitment or the Swingline Lender&rsquo;s Commitment
then in effect) and (ii)&nbsp;the Borrower shall not request, and
the Swingline Lender shall not make, any Swingline Loan if, after
giving effect to the making of such Swingline Loan, (x)&nbsp;the
aggregate amount of the Available Commitments would be less than
zero, (y) subject to Section 10.1, the aggregate outstanding
principal amount of all Loans plus the aggregate outstanding amount
of L/C Obligations in respect of Non-Procurement Letters of Credit
would exceed the Non-Procurement Facility Limit or (z)&nbsp;the
Total Extensions of Credit would exceed the outstanding principal
amount of the Senior Bond at any time prior to the Release
Date.&nbsp; During the Commitment Period, the Borrower may use the
Swingline Commitment by borrowing, repaying and reborrowing, all in
accordance with the terms and conditions hereof.&nbsp; Swingline
Loans shall be ABR Loans only.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;The
Borrower shall repay to the Swingline Lender the then unpaid
principal amount of each Swingline Loan on or prior to the date
that is the earlier of (i)&nbsp;30&nbsp;days after the date such
Swingline Loan is made and (ii)&nbsp;the Termination Date;
<u>provided</u> that on each date on which a Revolving Loan is
borrowed, the Borrower shall repay all Swingline Loans then
outstanding.</p>

<p><a name="_Ref64118350"></a><a name="_Toc98641082"></a><a name=
"_Toc100971126">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5&nbsp;&nbsp;<u>
Procedure for Swingline Borrowing; Refunding of Swingline
Loans</u></a><u>.<br />
</u>(a)&nbsp;&nbsp;Whenever the Borrower wishes to borrow Swingline
Loans, it shall give the Swingline Lender irrevocable telephonic
notice confirmed promptly in writing (which telephonic notice must
be received by the Swingline Lender not later than 1:00&nbsp;P.M.,
New York City time, on the proposed Borrowing Date), specifying
(i)&nbsp;the amount to be borrowed and (ii)&nbsp;the requested
Borrowing Date (which shall be a Business Day during the Commitment
Period).&nbsp; Each borrowing under the Swingline Commitment shall
be in an amount equal to $100,000 or a whole multiple
thereof.&nbsp; Not later than 2:00&nbsp;P.M., New York City time,
on the Borrowing Date specified in a notice in respect of Swingline
Loans, the Swingline Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately
available funds equal to the amount of the Swingline Loan to be
made by the Swingline Lender.&nbsp; The Administrative Agent shall
make the proceeds of such Swingline Loan available to the Borrower
on such Borrowing Date by depositing such proceeds in the account
of the Borrower with the Administrative Agent on such Borrowing
Date in immediately available funds.</p>

<p><a name=
"_Ref64120754">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;The Swingline Lender, at any time and from time to
time in its sole and absolute discretion may, on behalf of the
Borrower (which hereby irrevocably directs the Swingline Lender to
act on its behalf), on one Business Day&rsquo;s notice given by the
Swingline Lender no later than 12:00&nbsp;Noon, New York City time,
request each Lender to make, and each Lender hereby agrees to make,
a Revolving Loan, in an amount equal to such Lender&rsquo;s
Percentage of the aggregate amount of the Swingline Loans (the
&ldquo;<u>Refunded Swingline Loans</u>&rdquo;) outstanding on the
date of such notice, to repay the Swingline Lender.&nbsp; Each
Lender shall make the amount of such Revolving Loan available to
the Administrative Agent at the Funding Office in immediately
available funds, not later than 10:00&nbsp;A.M., New York City
time, one Business Day after the date of such notice.&nbsp; The
proceeds of such Revolving Loans shall be immediately made
available by the Administrative Agent to the Swingline Lender for
application by the Swingline Lender to the repayment of the
Refunded Swingline Loans.&nbsp; The Borrower irrevocably authorizes
the Swingline Lender to charge the Borrower&rsquo;s accounts with
the Administrative Agent (up to the amount available in each such
account) in order to immediately pay the amount of such Refunded
Swingline Loans to the extent amounts received from the Lenders are
not sufficient to repay in full such Refunded Swingline
Loans.</a><a name="_Ref64126182"></a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;If prior to the time a Revolving Loan would have
otherwise been made pursuant to Section&nbsp;2.5(b), one of the
events described in Section&nbsp;8(f) shall have occurred and be
continuing with respect to the Borrower or if for any other reason,
as determined by the Swingline Lender in its sole discretion,
Revolving Loans may not be made as contemplated by
Section&nbsp;2.5(b), each Lender shall, on the date such Revolving
Loan was to have been made pursuant to the notice referred to in
Section&nbsp;2.5(b), purchase for cash an undivided participating
interest in the then outstanding Swingline Loans by paying to the
Swingline Lender an amount (the &ldquo;<u>Swingline Participation
Amount</u>&rdquo;) equal to (i)&nbsp;such Lender&rsquo;s Percentage
<u>times</u> (ii)&nbsp;the sum of the aggregate principal amount of
Swingline Loans then outstanding that were to have been repaid with
such Revolving Loans.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;Whenever, at any time after the Swingline Lender has
received from any Lender such Lender&rsquo;s Swingline
Participation Amount, the Swingline Lender receives any payment on
account of the Swingline Loans, the Swingline Lender will
distribute to such Lender its Swingline Participation Amount
(appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender&rsquo;s
participating interest was outstanding and funded and, in the case
of principal and interest payments, to reflect such Lender&rsquo;s
<i>pro rata</i> portion of such payment if such payment is not
sufficient to pay the principal of and interest on all Swingline
Loans then due); <u>provided</u>, <u>however</u>, that in the event
that such payment received by the Swingline Lender is required to
be returned, such Lender will return to the Swingline Lender any
portion thereof previously distributed to it by the Swingline
Lender.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;Each Lender&rsquo;s obligation to make the Loans
referred to in Section&nbsp;2.5(b) and to purchase participating
interests pursuant to Section&nbsp;2.5(c) shall be absolute and
unconditional and shall not be affected by any circumstance,
including (i)&nbsp;any setoff, counterclaim, recoupment, defense or
other right that such Lender or the Borrower may have against the
Swingline Lender, the Borrower or any other Person for any reason
whatsoever, (ii)&nbsp;the occurrence or continuance of a Default or
an Event of Default or the failure to satisfy any of the other
conditions specified in Section&nbsp;5, (iii)&nbsp;any adverse
change in the condition (financial or otherwise) of the Borrower,
(iv)&nbsp;any breach of this Agreement or any other Loan Document
by the Borrower or any other Lender or (v)&nbsp;any other
circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing.</p>

<p><a name="_Toc98641083"></a><a name=
"_Toc100971127">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6&nbsp;&nbsp;<u>
Facility Fees, Utilization Fees,
etc.</u></a>&nbsp;&nbsp;(a)&nbsp;&nbsp;The Borrower agrees to pay
to the Administrative Agent for the account of each Lender a
facility fee for the period from and including the date hereof to
the last day of the Commitment Period, computed at the Facility Fee
Rate on the Commitment of such Lender during the period for which
payment is made, payable quarterly in arrears on each Fee Payment
Date, commencing on the first such date to occur after the date
hereof.&nbsp; In addition, if the principal amount of any Loan, or
any Reimbursement Obligations, shall remain outstanding and unpaid
after the last day of the Commitment Period, the Borrower agrees to
pay to the Administrative Agent, for the account of each Lender, a
facility fee for the period from the last day of the Commitment
Period until the date on which such amounts are repaid in full,
computed at the Facility Fee Rate on such amounts, payable
quarterly in arrears on each Fee Payment Date, commencing on the
first such date after the last day of the Commitment Period.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;If the average daily aggregate principal amount of
the Loans and L/C Obligations outstanding for the calendar quarter
preceding a Fee Payment Date (or such shorter period beginning with
the date hereof or ending with the Termination Date) is greater
than 50% of the daily average Total Commitments for such calendar
quarter or period, the Borrower agrees to pay to the Administrative
Agent for the account of each Lender a utilization fee at the
applicable Utilization Fee Rate on such average daily aggregate
principal amount of the Loans and the L/C Obligations outstanding
during such calendar quarter (or shorter period), payable in
arrears on each Fee Payment Date.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;The Borrower agrees to pay to the Administrative
Agent the fees in the amounts and on the dates as set forth in any
written, duly executed fee agreements with the Administrative Agent
and to perform any other obligations contained therein.</p>

<p><a name="_Ref64467698"></a><a name="_Ref64468099"></a><a name=
"_Toc98641084"></a><a name=
"_Toc100971128">2&nbsp;.7&nbsp;&nbsp;<u>Termination or Reduction of
Commitments; Extension of Termination
Date</u></a>..&nbsp;&nbsp;(a)&nbsp; The Borrower shall have the
right, upon not less than three Business Days&rsquo; notice to the
Administrative Agent, to terminate the Commitments or, from time to
time, to reduce the amount of the Commitments; <u>provided</u> that
no such termination or reduction of Commitments shall be permitted
if, after giving effect thereto and to any prepayments of the
Revolving Loans and Swingline Loans made on the effective date
thereof, the Total Extensions of Credit would exceed the Total
Commitments.&nbsp; Any such reduction shall be in an amount equal
to $1,000,000, or a whole multiple thereof, and shall reduce
permanently the Commitments then in effect.<a name=
"_Ref64474119"></a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;The Borrower may, by written notice to the
Administrative Agent (such notice being an &ldquo;<u>Extension
Notice</u>&rdquo;) given no more frequently than once in each
calendar year, request the Lenders to consider an extension of the
then applicable Termination Date to a later date.&nbsp; The
Administrative Agent shall promptly transmit any Extension Notice
to each Lender.&nbsp; Each Lender shall notify the Administrative
Agent whether it wishes to extend the then applicable Termination
Date not later than 30 days after the date of such Extension
Notice, and any such notice given by a Lender to the Administrative
Agent, once given, shall be irrevocable as to such Lender.&nbsp;
Any Lender which does not expressly notify the Administrative Agent
prior to the expiration of such thirty-day period that it wishes to
so extend the then applicable Termination Date shall be deemed to
have rejected the Borrower&rsquo;s request for extension of such
Termination Date.&nbsp; Lenders consenting to extend the then
applicable Termination Date are hereinafter referred to as
&ldquo;<u>Continuing Lenders</u>&rdquo;, and Lenders declining to
consent to extend such Termination Date (or Lenders deemed to have
so declined) are hereinafter referred to as &ldquo;<u>Non-Extending
Lenders</u>&rdquo;.&nbsp; If the Required Lenders have elected (in
their sole and absolute discretion) to so extend the Termination
Date, the Administrative Agent shall promptly notify the Borrower
of such election by the Required Lenders, and effective on the date
which is 30 days after the date of such notice by the
Administrative Agent to the Borrower, the Termination Date shall be
automatically and immediately so extended.&nbsp; No extension will
be permitted hereunder without the consent of the Required
Lenders.&nbsp; Upon the delivery of an Extension Notice and upon
the extension of the Termination Date pursuant to this Section, the
Borrower shall be deemed to have represented and warranted on and
as of the date of such Extension Notice and the effective date of
such extension, as the case may be, that no Default or Event of
Default has occurred and is continuing.&nbsp; Notwithstanding
anything contained in this Agreement to the contrary, no Lender
shall have any obligation to extend the Termination Date, and each
Lender may at its option, unconditionally and without cause,
decline to extend the Termination Date.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;If the Termination Date shall have been extended in
accordance with this Section, all references herein to the
&ldquo;Termination Date&rdquo; (except with respect to any
Non-Extending Lender) shall refer to the Termination Date as so
extended.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;If any Lender shall determine (or be deemed to have
determined) not to extend the Termination Date as requested by any
Extension Notice given by the Borrower pursuant to this Section,
the Commitment of such Non-Extending Lender (including the
obligations of such Lender under Section&nbsp;2.5 and 3.4) shall
terminate on the Termination Date without giving any effect to such
proposed extension, and the Borrower shall on such date pay to the
Administrative Agent, for the account of such Non-Extending Lender,
the principal amount of, and accrued interest on, such
Non-Extending Lender&rsquo;s Loans and outstanding Reimbursement
Obligations, together with any amounts payable to such Lender
pursuant to Section&nbsp;2.17 and any and all fees or other amounts
owing to such Non-Extending Lender under this Agreement;
<u>provided</u> that if the Borrower has replaced such
Non-Extending Lender pursuant to paragraph&nbsp;(e) below then the
provisions of such paragraph shall apply.&nbsp; The Total
Commitments (but not, for the avoidance of doubt, except as
hereinafter provided, the L/C Commitment) shall be reduced by the
amount of the Commitment of such Non-Extending Lender to the extent
the Commitment of such Non-Extending Lender has <u>not</u> been
transferred to one or more Continuing Lenders pursuant to
paragraph&nbsp;(e) below, <u>provided</u> that, if the Total
Commitments, after giving effect to the reduction in the Total
Commitments due to Non-Extending Lenders which are not replaced
pursuant to paragraph&nbsp;(e) below, is less than the L/C
Commitment, the L/C Commitment shall be reduced by an amount equal
to such excess.</p>

<p><a name="_Ref64469895">(e)&nbsp;&nbsp;A Non-Extending Lender
shall be obligated, at the request of the Borrower and subject to
(i)&nbsp;payment by the successor Lender described below to the
Administrative Agent for the account of such Non-Extending Lender
of the principal amount of, and accrued interest on, such
Non-Extending Lender&rsquo;s Loans, and (ii)&nbsp;payment by the
Borrower to such Non-Extending Lender of any amounts payable to
such Non-Extending Lender pursuant to Section&nbsp;2.17 (as if the
purchase of such Non-Extending Lender&rsquo;s Loans constituted a
prepayment thereof) and any and all fees or other amounts owing to
such Non-Extending Lender under this Agreement, to transfer without
recourse, representation, warranty (other than a representation
that such Lender has not created an adverse claim on its Loans) or
expense to such Non-Extending Lender, at any time prior to the
Termination Date applicable to such Non-Extending Lender, all of
such Non-Extending Lender&rsquo;s rights and obligations hereunder
to another financial institution or group of financial institutions
nominated by the Borrower and willing to participate as a successor
Lender in the place of such Non-Extending Lender; <u>provided</u>
that, if such transferee is not already a Lender, (1)&nbsp;such
transferee satisfies all the requirements of this Agreement, and
(2)&nbsp;the Administrative Agent and, with respect to any
replacement Lender that is not an Eligible Assignee, each Issuing
Lender shall have consented to such transfer, which consent shall
not be unreasonably withheld or delayed.&nbsp; Each such transferee
successor Lender shall be deemed to be a Continuing Lender
hereunder in replacement of the transferor Non-Extending Lender and
shall enjoy all rights and assume all obligations on the part of
such Non-Extending Lender set forth in this Agreement.&nbsp; Each
such transfer shall be effected pursuant to an Assignment and
Assumption.</a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;If the Termination Date shall have been extended in
respect of Continuing Lenders in accordance with this Section, any
notice of borrowing pursuant to Section&nbsp;2.2 or 2.5 specifying
a Borrowing Date occurring after the Termination Date applicable to
a Non-Extending Lender or requesting an Interest Period extending
beyond such date shall (i)&nbsp;have no effect in respect of such
Non-Extending Lender and (ii)&nbsp;not specify a requested
aggregate principal amount exceeding the aggregate Available
Commitments (calculated on the basis of the Commitments of the
Continuing Lenders).</p>

<p><a name=
"_Ref65421912">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;&nbsp;Prior to the Release Date, in the event that the
Termination Date is extended pursuant to this Section 2.7 beyond
the Bond Maturity Date of the Senior Bond, the Borrower and the
Administrative Agent shall make appropriate arrangements (and the
Lenders hereby direct and authorize the Administrative Agent to
make such arrangements) such that (i)&nbsp;the Bond Maturity Date
of the Senior Bond shall be amended to be coincident with or later
than such extended Termination Date or (ii)&nbsp;a new Senior Bond
having a maturity date coincident with or later than such extended
Termination Date shall be substituted for the Senior Bond then held
by the Administrative Agent; and such amendment or exchange shall
be effected pursuant to documentation and arrangements reasonably
satisfactory to the Administrative Agent.</a></p>

<p><a name="_Toc98641085"></a><a name=
"_Toc100971129">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8&nbsp;&nbsp;<u>
Optional Prepayments</u></a>.&nbsp;&nbsp;The Borrower may at any
time and from time to time prepay the Loans, in whole or in part,
without premium or penalty, upon irrevocable notice delivered to
the Administrative Agent no later than 12:00&nbsp;Noon, New York
City time, three Business Days prior thereto, in the case of
Eurodollar Loans, and no later than 12:00&nbsp;Noon, New York City
time, one Business Day prior thereto, in the case of ABR Loans,
which notice shall specify the date and amount of prepayment and
whether the prepayment is of Eurodollar Loans or ABR Loans;
<u>provided</u>, that if a Eurodollar Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto,
the Borrower shall also pay any amounts owing pursuant to
Section&nbsp;2.17.&nbsp; Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender
thereof.&nbsp; If any such notice is given, the amount specified in
such notice shall be due and payable on the date specified therein,
together with (except in the case of Revolving Loans that are ABR
Loans and Swingline Loans) accrued interest to such date on the
amount prepaid.&nbsp; Partial prepayments of Revolving Loans which
shall be in an aggregate principal amount of $1,000,000 or a whole
multiple of $500,000 in excess thereof.&nbsp; Partial prepayments
of Swingline Loans shall be in an aggregate principal amount of
$100,000 or a whole multiple thereof.</p>

<p><a name="_Ref64118964"></a><a name="_Toc98641086"></a><a name=
"_Toc100971130">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9&nbsp;&nbsp;<u>
Conversion and Continuation
Options</u></a>.&nbsp;&nbsp;(a)&nbsp;&nbsp;The Borrower may elect
from time to time to convert Eurodollar Loans to ABR Loans by
giving the Administrative Agent prior irrevocable notice of such
election no later than 12:00&nbsp;Noon, New York City time, on the
Business Day preceding the proposed conversion date,
<u>provided</u> that any such conversion of Eurodollar Loans may
only be made on the last day of an Interest Period with respect
thereto.&nbsp; The Borrower may elect from time to time to convert
ABR Loans to Eurodollar Loans by giving the Administrative Agent
prior irrevocable notice of such election no later than
12:00&nbsp;Noon, New York City time, on the third Business Day
preceding the proposed conversion date (which notice shall specify
the length of the initial Interest Period therefor),
<u>provided</u> that no ABR Loan may be converted into a Eurodollar
Loan when any Event of Default has occurred and is continuing and
the Required Lenders have determined in their sole discretion not
to permit such conversions.&nbsp; Upon receipt of any such notice
the Administrative Agent shall promptly notify each relevant Lender
thereof.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;Any Eurodollar Loan may be continued as such upon
the expiration of the then current Interest Period with respect
thereto by the Borrower giving irrevocable notice to the
Administrative Agent, in accordance with the applicable provisions
of the term &ldquo;Interest Period&rdquo; set forth in
Section&nbsp;1.1, of the length of the next Interest Period to be
applicable to such Loans, <u>provided</u> that no Eurodollar Loan
may be continued as such when any Event of Default has occurred and
is continuing and the Required Lenders have determined in their
sole discretion not to permit such continuations, and
<u>provided</u>, <u>further</u>, that if the Borrower shall fail to
give any required notice as described above in this paragraph or if
such continuation is not permitted pursuant to the preceding
proviso such Loans shall be automatically converted to ABR Loans on
the last day of such then expiring Interest Period.&nbsp; Upon
receipt of any such notice the Administrative Agent shall promptly
notify each relevant Lender thereof.</p>

<p><a name="_Toc98641087"></a><a name=
"_Toc100971131">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10&nbsp;&nbsp;<u>
Limitations on Eurodollar
Tranches</u></a>.&nbsp;&nbsp;Notwithstanding anything to the
contrary in this Agreement, all borrowings, conversions and
continuations of Eurodollar Loans and all selections of Interest
Periods shall be in such amounts and be made pursuant to such
elections so that (a)&nbsp;after giving effect thereto, the
aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $1,000,000 or a whole multiple
of $500,000 in excess thereof and (b)&nbsp;no more than
15&nbsp;Eurodollar Tranches shall be outstanding at any one
time.</p>

<p><a name="_Toc98641088"></a><a name=
"_Toc100971132">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11&nbsp;&nbsp;<u>
Interest Rates and Payment
Dates</u></a>.&nbsp;&nbsp;(a)&nbsp;&nbsp;Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined
for such day <u>plus</u> the Applicable Margin.</p>

<p><a name=
"_Ref64128147">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;Each ABR Loan shall bear interest at a rate per
annum equal to the ABR <u>plus</u> the Applicable Margin.</a></p>

<p><a name=
"_Ref64127353">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;(i)&nbsp;&nbsp;If all or a portion of the principal amount
of any Loan or Reimbursement Obligation shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a default rate per annum
equal to (x)&nbsp;in the case of the Loans, the rate that would
otherwise be applicable thereto pursuant to the foregoing
provisions of this Section <u>plus</u> 2% or (y)&nbsp;in the case
of Reimbursement Obligations, the rate applicable to ABR Loans
<u>plus</u> 2%, and (ii)&nbsp;if all or a portion of any interest
payable on any Loan or Reimbursement Obligation or any facility
fee, utilization fee, letter of credit fee, or any other fee
payable (excluding any expenses or other indemnity) hereunder shall
not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest
at a default rate per annum equal to the rate then applicable to
ABR Loans <u>plus</u> 2%, in each case, with respect to
clauses&nbsp;(i) and (ii) above, from the date of such non-payment
until such amount is paid in full (as well after as before
judgment).</a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;Interest shall be payable in arrears on each
Interest Payment Date, <u>provided</u> that interest accruing
pursuant to paragraph&nbsp;(c) of this Section shall be payable
from time to time on demand.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;The amount of any interest payments received by the
Administrative Agent under the Senior Bond shall be deemed to be
payments of interest and fees payable by the Borrower hereunder and
shall reduce, dollar-for-dollar, the amount of interest and fees
then owing by the Borrower hereunder.</p>

<p><a name="_Toc98641089"></a><a name=
"_Toc100971133">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12&nbsp;&nbsp;<u>
Computation of Interest and
Fees</u></a>.&nbsp;&nbsp;(a)&nbsp;&nbsp;Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day year
for the actual days elapsed, except that, with respect to ABR Loans
the rate of interest on which is calculated on the basis of the
Base Rate, the interest thereon shall be calculated on the basis of
a 365- (or 366-, as the case may be) day year for the actual days
elapsed.&nbsp; The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each
determination of a Eurodollar Rate.&nbsp; Any change in the
interest rate on a Loan resulting from a change in the ABR or the
Eurocurrency Reserve Requirements shall become effective as of the
opening of business on the day on which such change becomes
effective.&nbsp; The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of the
effective date and the amount of each such change in interest
rate.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement
shall constitute prima facie evidence of such amounts.&nbsp; The
Administrative Agent shall, at the request of the Borrower or any
Lender, deliver to the Borrower or such Lender a statement showing
the quotations used by the Administrative Agent in determining any
interest rate pursuant to Section&nbsp;2.11(a).</p>

<p><a name="_Toc98641090"></a><a name=
"_Toc100971134">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13&nbsp;&nbsp;<u>
Inability to Determine Interest Rate</u></a>.&nbsp;&nbsp;If prior
to the first day of any Interest Period:</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;the Administrative Agent shall have determined
(which determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining
the Eurodollar Rate for such Interest Period, or</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;the Administrative Agent shall have received notice
from the Required Lenders that the Eurodollar Rate determined or to
be determined for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (as conclusively certified
by such Lenders) of making or maintaining their affected Loans
during such Interest Period,</p>

<p>the Administrative Agent shall give telecopy or telephonic
notice thereof to the Borrower and the relevant Lenders as soon as
practicable thereafter.&nbsp; If such notice is given (x)&nbsp;any
Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y)&nbsp;any Loans that
were to have been converted on the first day of such Interest
Period to Eurodollar Loans shall be continued as ABR Loans and
(z)&nbsp;any outstanding Eurodollar Loans shall be converted, on
the last day of the then-current Interest Period, to ABR
Loans.&nbsp; Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or
continued as such, nor shall the Borrower have the right to convert
Loans to Eurodollar Loans.</p>

<p><a name="_Ref64127180"></a><a name="_Toc98641091"></a><a name=
"_Toc100971135"></a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14&nbsp;&nbsp;<u>
Pro Rata Treatment and Payments</u><u>;
Notes</u>.&nbsp;&nbsp;(a)&nbsp;&nbsp;Each borrowing by the Borrower
from the Lenders hereunder, each payment by the Borrower on account
of any commitment fee and any reduction of the Commitments of the
Lenders shall be made <u>pro rata</u> according to the respective
Percentages of the Lenders.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;Each payment (including each prepayment) by the
Borrower on account of principal of and interest on the Revolving
Loans shall be made <u>pro rata</u> according to the respective
outstanding principal amounts of the Revolving Loans then held by
the Lenders.&nbsp; Each payment in respect of Reimbursement
Obligations in respect of any Letter of Credit shall be made to the
Issuing Lender that issued such Letters of Credit.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;Notwithstanding anything to the contrary herein, all
payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, Reimbursement
Obligations, interest, fees or otherwise, shall be made without
setoff or counterclaim and shall be made prior to 4:00&nbsp;P.M.,
New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders or the Issuing Lenders, as
applicable, at the Funding Office, in Dollars and in immediately
available funds.&nbsp; The Administrative Agent shall distribute
such payments to the Lenders promptly upon receipt in like funds as
received.&nbsp; If any payment hereunder (other than payments on
the Eurodollar Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding
Business Day.&nbsp; If any payment on a Eurodollar Loan becomes due
and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day
unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day.&nbsp; In the case
of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the
then applicable rate during such extension.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;Unless the Administrative Agent shall have been
notified in writing by any Lender prior to a borrowing that such
Lender will not make the amount that would constitute its share of
such borrowing available to the Administrative Agent, the
Administrative Agent may assume that such Lender is making such
amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount.&nbsp; If such
amount is not made available to the Administrative Agent by the
required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest
thereon, at a rate equal to the greater of (i)&nbsp;the Federal
Funds Effective Rate and (ii)&nbsp;a rate determined by the
Administrative Agent in accordance with banking industry rules on
interbank compensation, for the period until such Lender makes such
amount immediately available to the Administrative Agent.&nbsp; A
certificate of the Administrative Agent submitted to any Lender
with respect to any amounts owing under this paragraph shall be
conclusive in the absence of manifest error.&nbsp; If such
Lender&rsquo;s share of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days
after such Borrowing Date, the Administrative Agent shall also be
entitled to recover such amount with interest thereon at the rate
per annum applicable to ABR Loans from the Borrower within
30&nbsp;days after written demand therefor.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;Unless the Administrative Agent shall have been
notified in writing by the Borrower prior to the date of any
payment due to be made by the Borrower hereunder that the Borrower
will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such
payment, and the Administrative Agent may, but shall not be
required to, in reliance upon such assumption, make available to
the Lenders their respective <i>pro rata</i> shares of a
corresponding amount.&nbsp; If such payment is not made to the
Administrative Agent by the Borrower within three Business Days
after such due date, the Administrative Agent shall be entitled to
recover, on demand, from each Lender to which any amount which was
made available pursuant to the preceding sentence, such amount with
interest thereon at the rate per annum equal to the daily average
Federal Funds Effective Rate.&nbsp; Nothing herein shall be deemed
to limit the rights of the Administrative Agent or any Lender
against the Borrower.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;Notwithstanding the anything to the contrary
contained in this Agreement, the Borrower shall make all payments
of amounts due and payable under this Agreement directly to the
parties to whom such payments are payable in accordance with the
terms hereof, and shall not make any payments of any amount due and
payable hereunder to the Indenture Trustee as a payment under the
Senior Bond.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;&nbsp;The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will promptly
execute and deliver to such Lender a promissory note (a
&ldquo;<u>Note</u>&rdquo;) of the Borrower evidencing any Revolving
Loans of such Lender, substantially in the form of Exhibit J, with
appropriate insertions as to date and principal amount;
<u>provided</u>, that delivery of Notes shall not be a condition
precedent to the Effective Date or the occurrence or making of
Loans on the Effective Date.</p>

<p><a name="_Ref64116742"></a><a name="_Toc98641092"></a><a name=
"_Toc100971136">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15&nbsp;&nbsp;<u>
Requirements of Law</u></a>.&nbsp;&nbsp;(a)&nbsp;&nbsp;If the
adoption of or any change in any Requirement of Law or in the
interpretation or application thereof or compliance by any Lender
with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made
subsequent to the date hereof:<br />
</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit,
any Application or any Eurodollar Loan made by it, or change the
basis of taxation of payments to such Lender in respect thereof
(except for Non-Excluded Taxes and Other Taxes covered by
Section&nbsp;2.16 and net income taxes and franchise taxes imposed
in lieu of net income taxes);</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;&nbsp;shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or
any other acquisition of funds by, any office of such Lender that
is not otherwise included in the determination of the Eurodollar
Rate, which requirements are generally applicable to loans made by
such Lender; or</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iii)&nbsp;&nbsp;shall impose on such Lender any other condition
that is generally applicable to loans made by such Lender;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
the result of any of the foregoing is to increase the cost to such
Lender, by an amount that such Lender deems to be material, of
making, converting into, continuing or maintaining Eurodollar Loans
or issuing or participating in Letters of Credit, or to reduce any
amount receivable hereunder in respect thereof, then, in any such
case, the Borrower shall promptly pay such Lender, within ten
Business Days after its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount
receivable.&nbsp; If any Lender becomes entitled to claim any
additional amounts pursuant to this paragraph, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of
the event by reason of which it has become so entitled;
<u>provided</u>, <u>however</u>, that no Lender shall be entitled
to demand such compensation more than 90&nbsp;days following
(x)&nbsp;the last day of the Interest Period in respect of which
such demand is made or (y)&nbsp;the repayment of the Loan or
Swingline Loan in respect of which such demand is made, and no
Issuing Lender shall be entitled to demand such compensation more
than 90&nbsp;days following the expiration or termination (by
drawing or otherwise) of the Letter of Credit issued by it in
respect of which such demand is made.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;If any Lender shall have determined that the
adoption of or any change in any Requirement of Law regarding
capital adequacy or in the interpretation or application thereof or
compliance by such Lender or any corporation controlling such
Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect
of reducing the rate of return on such Lender&rsquo;s or such
corporation&rsquo;s capital as a consequence of its obligations
hereunder or under or in respect of any Letter of Credit to a level
below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into
consideration such Lender&rsquo;s or such corporation&rsquo;s
policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the
Administrative Agent) of a written request therefor, the Borrower
shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such corporation for such reduction.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the Borrower
(with a copy to the Administrative Agent) shall constitute prima
facie evidence of such costs or amounts.&nbsp; Notwithstanding
anything to the contrary in this Section, the Borrower shall not be
required to compensate a Lender pursuant to this Section for any
amounts incurred more than six months prior to the date that such
Lender notifies the Borrower of such Lender&rsquo;s intention to
claim compensation therefor; <u>provided</u> that, if the
circumstances giving rise to such claim have a retroactive effect,
then such six-month period shall be extended to include the period
of such retroactive effect not to exceed twelve months.&nbsp; The
obligations of the Borrower pursuant to this Section shall survive
for 90&nbsp;days after the termination of this Agreement and the
payment of the Loans and all other amounts then due and payable
hereunder.</p>

<p><a name="_Ref64116746"></a><a name="_Toc98641093"></a><a name=
"_Toc100971137">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16&nbsp;&nbsp;<u>
Taxes</u></a>.&nbsp;&nbsp;(a)&nbsp;&nbsp;All payments made by the
Borrower under this Agreement shall be made free and clear of, and
without deduction or withholding for or on account of, any present
or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding (i) net income taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on
the Administrative Agent or any Lender as a result of a present or
former connection between the Administrative Agent or such Lender
and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from the
Administrative Agent or such Lender having executed, delivered or
performed its obligations or received a payment under, or enforced,
this Agreement or any other Loan Document) and (ii) any branch
profits tax imposed by the United States.&nbsp; If any such
non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings (&ldquo;<u>Non-Excluded
Taxes</u>&rdquo;) or Other Taxes are required to be withheld from
any amounts payable to the Administrative Agent or any Lender
hereunder, the amounts so payable to the Administrative Agent or
such Lender shall be increased to the extent necessary to yield to
the Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this
Agreement, <u>provided</u>, <u>however</u>, that the Borrower shall
not be required to increase any such amounts payable to any Lender
with respect to any Non-Excluded Taxes (i)&nbsp;that are
attributable to such Lender&rsquo;s failure to comply with the
requirements of paragraph&nbsp;(d) or (e) of this Section or
(ii)&nbsp;that are United States withholding taxes imposed on
amounts payable to such Lender at the time such Lender becomes a
party to this Agreement, except to the extent that such
Lender&rsquo;s assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with
respect to such Non-Excluded Taxes pursuant to this paragraph.</p>

<p><a name=
"_Ref64470670">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;In addition, the Borrower shall pay any Other Taxes
to the relevant Governmental Authority in accordance with
applicable law.</a></p>

<p><a name=
"_Ref64470683">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;Whenever any Non-Excluded Taxes or Other Taxes are
payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Administrative Agent for its own account
or for the account of the relevant Lender, as the case may be, a
certified copy of any original official receipt received by the
Borrower showing payment thereof.&nbsp; If the Borrower fails to
pay any Non-Excluded Taxes or Other Taxes when due to the
appropriate taxing authority, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administrative
Agent or any Lender as a result of any such failure.</a></p>

<p><a name=
"_Ref64118087">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;Each Lender (or Transferee) that is not a
&ldquo;U.S. Person&rdquo; as defined in Section&nbsp;7701(a)(30) of
the Code (a &ldquo;<u>Non-U.S. Lender</u>&rdquo;) shall deliver to
the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation
shall have been purchased) two copies of either U.S. Internal
Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a
Non&#8209;U.S. Lender claiming exemption from U.S. federal
withholding tax under Section&nbsp;871(h) or 881(c) of the Code
with respect to payments of &ldquo;portfolio interest&rdquo;, a
statement substantially in the form of Exhibit&nbsp;H and a Form
W-8BEN, or any subsequent versions thereof or successors thereto,
properly completed and duly executed by such Non&#8209;U.S. Lender
claiming complete exemption from, or a reduced rate of, U.S.
federal withholding tax on all payments by the Borrower under this
Agreement and the other Loan Documents.&nbsp; Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes
a party to this Agreement (or, in the case of any Participant, on
or before the date such Participant purchases the related
participation).&nbsp; In addition, each Non&#8209;U.S. Lender shall
deliver such forms promptly upon the obsolescence or invalidity of
any form previously delivered by such Non&#8209;U.S. Lender.&nbsp;
Each Non-U.S. Lender shall promptly notify the Borrower at any time
it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form
of certification adopted by the U.S. taxing authorities for such
purpose).&nbsp; Notwithstanding any other provision of this
paragraph, a Non&#8209;U.S. Lender shall not be required to deliver
any form pursuant to this paragraph that such Non&#8209;U.S. Lender
is not legally able to deliver; <u>provided</u>, <u>however</u>, if
any Non-U.S. Lender fails to file forms with the Borrower and the
Administrative Agent (or, in the case of a Participant, with the
Lender from which the related participation was purchased) on or
before the date the Non-U.S. Lender becomes a party to this
Agreement (or, in the case of a Participant, on or before the date
such Participant purchased the related participation) entitling the
Non-U.S. Lender to a complete exemption from United States
withholding taxes at such time, such Non-U.S. Lender shall not be
entitled to receive any increased payments from the Borrower with
respect to United States withholding taxes under paragraph&nbsp;(a)
of this Section, except to the extent that the Non-U.S.
Lender&rsquo;s assignor (if any) was entitled, at the time of the
assignment to the Non-U.S. Lender, to receive additional amounts
from the Borrower with respect to United States withholding
taxes.</a></p>

<p><a name=
"_Ref64127756">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the
jurisdiction in which the Borrower is located, or any treaty to
which such jurisdiction is a party, with respect to payments under
this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such
properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without
withholding or at a reduced rate, <u>provided</u> that such Lender
is legally entitled to complete, execute and deliver such
documentation and in such Lender&rsquo;s judgment such completion,
execution or submission would not materially prejudice the legal
position of such Lender.</a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;If the Administrative Agent or any Lender
determines, in its sole discretion, that it has received a refund
of any Non-Excluded Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower
has paid amounts pursuant to this Section&nbsp; 2.16, it shall pay
over such refund to the Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by the
Borrower under this Section&nbsp; 2.16 with respect to the
Non-Excluded Taxes or Other Taxes giving rise to such refund), net
of all out-of-pocket expenses of the Administrative Agent or such
Lender and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund);
<u>provided</u>, that the Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount
paid over to the Borrower (<u>plus</u> any penalties, interest or
other charges imposed by the relevant Governmental Authority) to
the Administrative Agent or such Lender in the event the
Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. &nbsp; This paragraph shall
not be construed to require the Administrative Agent or any Lender
to make available its tax returns (or any other information
relating to its taxes which it deems confidential) to the Borrower
or any other Person.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;&nbsp;The agreements in this Section shall survive for one
year after the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.</p>

<p><a name="_Ref64116751"></a><a name="_Toc98641094"></a><a name=
"_Toc100971138">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17&nbsp;&nbsp;<u>
Indemnity</u></a>.&nbsp;&nbsp;The Borrower agrees to indemnify each
Lender for, and to hold each Lender harmless from, any loss (other
than the loss of Applicable Margin) or expense that such Lender may
sustain or incur as a consequence of (a)&nbsp;default by the
Borrower in making a borrowing of, conversion into or continuation
of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this
Agreement, (b)&nbsp;default by the Borrower in making any
prepayment of or conversion from Eurodollar Loans after the
Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c)&nbsp;the making of a prepayment
of Eurodollar Loans on a day that is not the last day of an
Interest Period with respect thereto.&nbsp; A certificate as to any
amounts payable pursuant to this Section submitted to the Borrower
by any Lender shall be conclusive in the absence of manifest
error.&nbsp; This covenant shall survive for 90&nbsp;days after the
termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.</p>

<p><a name="_Ref64127889"></a><a name="_Toc98641095"></a><a name=
"_Toc100971139">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.18&nbsp;&nbsp;<u>
Change of Lending Office</u></a>.&nbsp;&nbsp;Each Lender agrees
that, upon the occurrence of any event giving rise to the operation
of Section&nbsp;2.15 or 2.16(a) with respect to such Lender, it
will, if requested by the Borrower, use reasonable efforts (subject
to overall policy considerations of such Lender) to designate
another lending office for any Loans affected by such event with
the object of avoiding the consequences of such event;
<u>provided</u>, that such designation is made on terms that, in
the sole but reasonable judgment of such Lender, cause such Lender
and its lending office(s) to suffer no unreimbursed economic
disadvantage or any legal or regulatory disadvantage, and
<u>provided</u>, <u>further</u>, that nothing in this Section shall
affect or postpone any of the obligations of the Borrower or the
rights of any Lender pursuant to Section&nbsp;2.15 or 2.16(a).</p>

<p><a name="_Toc98641096"></a><a name=
"_Toc100971140">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19&nbsp;&nbsp;<u>
Replacement of Lenders</u></a>.&nbsp;&nbsp;The Borrower shall be
permitted to replace any Lender that (a)&nbsp;requests (on its
behalf or any of its Participants) reimbursement for amounts owing
pursuant to Section&nbsp;2.15 or 2.16(a) or (b)&nbsp;defaults in
its obligation to make Loans hereunder, with a replacement
financial institution; <u>provided</u> that (i)&nbsp;such
replacement does not conflict with any Requirement of Law,
(ii)&nbsp;no Event of Default shall have occurred and be continuing
at the time of such replacement, (iii)&nbsp;prior to any such
replacement, such Lender shall have taken no action under
Section&nbsp;2.18 which eliminates the continued need for payment
of amounts owing pursuant to Section&nbsp;2.15 or 2.16(a),
(iv)&nbsp;the replacement financial institution shall purchase, at
par, all Loans and other amounts owing to such replaced Lender on
or prior to the date of replacement, (v)&nbsp;the Borrower shall be
liable to such replaced Lender under Section&nbsp;2.17 if any
Eurodollar Loan owing to such replaced Lender shall be purchased
other than on the last day of the Interest Period relating thereto,
(vi)&nbsp;the replacement financial institution, if not already a
Lender, shall be reasonably satisfactory to the Administrative
Agent, (vii)&nbsp;the replaced Lender shall be obligated to make
such replacement in accordance with the provisions of
Section&nbsp;10.6 (<u>provided</u> that the Borrower shall be
obligated to pay the registration and processing fee referred to
therein), (viii)&nbsp;until such time as such replacement shall be
consummated, the Borrower shall pay all additional amounts (if any)
required pursuant to Section&nbsp;2.15 or 2.16(a), as the case may
be, and (ix)&nbsp;any such replacement shall not be deemed to be a
waiver of any rights that the Borrower, the Administrative Agent or
any other Lender shall have against the replaced Lender.</p>

<p align="center"><a name="_Toc15112840"></a><a name=
"_Ref64402245"></a><a name="_Ref64470216"></a><a name=
"_Ref64470779"></a><a name="_Ref64470827"></a><a name=
"_Toc98641097"></a><a name="_Toc100971141">SECTION
3.&nbsp;&nbsp;&nbsp;LETTERS OF CREDIT</a><br />
</p>

<p><a name="_Ref64467996"></a><a name="_Toc98641098"></a><a name=
"_Toc100971142">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1&nbsp;&nbsp;<u>
L/C Commitment</u>.</a>&nbsp; From and after the Effective Date,
each Existing Letter of Credit shall, subject to the terms and
conditions hereof, constitute a Letter of Credit hereunder.&nbsp;
Subject to the terms and conditions hereof, each Issuing Lender, in
reliance on the agreements of the other Lenders set forth in
Section 3.4(a), agrees to issue standby and commercial letters of
credit (the letters of credit issued on and after the Effective
Date pursuant to this Section 3, together with the Existing Letters
of Credit, collectively, the &ldquo;<u>Letters of
Credit</u>&rdquo;) for the account of the Borrower on any Business
Day on or after the Effective Date and during the Commitment Period
in such form as may be approved from time to time by such Issuing
Lender; <u>provided</u>, that no Issuing Lender shall issue any
Letter of Credit (and no Existing Letter of Credit may become a
Letter of Credit hereunder) if, after giving effect to such
issuance (or to the transfer of such Existing Letter of Credit
hereunder, as the case may be), (i)&nbsp;the L/C Obligations would
exceed the L/C Commitment, (ii)&nbsp;the aggregate amount of the
Available Commitments would be less than zero, (iii) if the purpose
of such Letter of Credit is energy procurement, the aggregate
outstanding amount of L/C Obligations in respect of Letters of
Credit issued for energy procurement purposes would exceed the
Procurement L/C Facility Limit, (iv)&nbsp;subject to Section 10.1,
if such Letter of Credit is a Non-Procurement Letter of Credit, the
aggregate outstanding amount of L/C Obligations in respect of
Non-Procurement Letters of Credit plus the aggregate outstanding
principal amount of all Loans would exceed the Non-Procurement
Facility Limit or (v)&nbsp;the Total Extensions of Credit would
exceed the outstanding principal amount of the Senior Bond at any
time prior to the Release Date.&nbsp; The Administrative Agent, the
Issuing Lenders and the Lenders shall be entitled to rely
conclusively on the Borrower&rsquo;s statements in determining
whether the limitation set forth in clauses (iii) and (iv) of the
preceding sentence are satisfied; and the Administrative Agent, the
Issuing Lenders and the Lenders shall not be required to maintain
any records with respect to whether or not the Procurement L/C
Facility Limit or the Other L/C Facility Limit is exceeded at any
time.&nbsp; Each Letter of Credit shall (i)&nbsp;be denominated in
Dollars and (ii)&nbsp;expire no later than the earlier of
(x)&nbsp;the first anniversary of its date of issuance and
(y)&nbsp;the date which is five Business Days prior to the
Termination Date; <u>provided</u> that any Letter of Credit with a
one-year term may provide for the renewal thereof for additional
one-year periods (which shall in no event extend beyond the date
referred to in clause&nbsp;(y) above).</p>

<p>(b)&nbsp;&nbsp;No Issuing Lender shall at any time be obligated
to issue, amend, extend or renew any Letter of Credit hereunder if
such issuance, amendment, extension or renewal would conflict with,
or cause such Issuing Lender or any L/C Participant to exceed any
limits imposed by, any applicable Requirement of Law.</p>

<p><a name="_Toc15112842"></a><a name="_Toc98641099"></a><a name=
"_Toc100971143">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2&nbsp;&nbsp;<u>
Procedure for Issuance of Letters of Credit</u></a>.&nbsp; The
Borrower may from time to time request that an Issuing Lender issue
a Letter of Credit by delivering to such Issuing Lender at its
address for notices specified herein an Application therefor,
completed to the satisfaction of such Issuing Lender, and such
other certificates, documents and other papers and information as
such Issuing Lender may request.&nbsp; Concurrently with the
delivery of an Application to an Issuing Lender, the Borrower shall
deliver a copy thereof to the Administrative Agent and the
Administrative Agent shall provide notice of such request to the
Lenders.&nbsp; Upon receipt of any Application, an Issuing Lender
will process such Application and the certificates, documents and
other papers and information delivered to it in connection
therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby by issuing
the original of such Letter of Credit to the beneficiary thereof or
as otherwise may be agreed to by such Issuing Lender and the
Borrower (but in no event shall any Issuing Lender be required to
issue any Letter of Credit earlier than three Business Days after
its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating
thereto).&nbsp; Promptly after issuance by an Issuing Lender of a
Letter of Credit, such Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower.&nbsp; Each Issuing Lender shall
promptly give notice to the Administrative Agent of the issuance of
each Letter of Credit issued by such Issuing Lender (including the
amount thereof), and shall provide a copy of such Letter of Credit
to the Administrative Agent as soon as possible after the date of
issuance.</p>

<p><a name="_Toc15112843"></a><a name="_Toc98641100"></a><a name=
"_Toc100971144">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3&nbsp;&nbsp;<u>
Fees and Other Charges</u>.</a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;The Borrower will pay a fee on the aggregate
drawable amount of all outstanding Letters of Credit at a per annum
rate equal to the Applicable Margin then in effect with respect to
Eurodollar Loans, shared ratably among the Lenders in accordance
with their respective Percentages and payable quarterly in arrears
on each Fee Payment Date after the issuance date.&nbsp; In
addition, the Borrower shall pay to the relevant Issuing Lender for
its own account a fronting fee on the aggregate drawable amount of
all outstanding Letters of Credit issued in an amount to be agreed
between the Borrower and such Issuing Lender, payable quarterly in
arrears on each Fee Payment Date after the issuance date.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;In addition to the foregoing fees, the Borrower
shall pay or reimburse each Issuing Lender for such normal and
customary costs and expenses as are incurred or charged by such
Issuing Lender in issuing, negotiating, effecting payment under,
amending, renewing or otherwise administering any Letter of
Credit.<a name="_Toc15112844"></a><a name="_Ref64470718"></a><a
name="_Toc98641101"></a><a name="_Toc100971145"></a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4&nbsp;&nbsp;<u>
L/C Participations</u></p>

<p><a name=
"_Ref64470205">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;Each Issuing Lender irrevocably agrees to grant and
hereby grants to each L/C Participant, and, to induce each Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and
purchases from each Issuing Lender, on the terms and conditions
hereinafter stated, for such L/C Participant&rsquo;s own account
and risk, an undivided interest equal to such L/C
Participant&rsquo;s Percentage in each Issuing Lender&rsquo;s
obligations and rights under each Letter of Credit issued by such
Issuing Lender hereunder and the amount of each draft paid by such
Issuing Lender thereunder.&nbsp; Each L/C Participant
unconditionally and irrevocably agrees with each Issuing Lender
that, if a draft is paid under any Letter of Credit issued by such
Issuing Lender for which such Issuing Lender is not reimbursed in
full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Administrative
Agent for the account of such Issuing Lender upon demand at such
Issuing Lender&rsquo;s address for notices specified herein (and
thereafter the Administrative Agent shall promptly pay to such
Issuing Lender) an amount equal to such L/C Participant&rsquo;s
Percentage of the amount of such draft, or any part thereof, that
is not so reimbursed.&nbsp; Each L/C Participant&rsquo;s obligation
to pay such amount shall be absolute and unconditional and shall
not be affected by any circumstance, including (i)&nbsp;any setoff,
counterclaim, recoupment, defense or other right that such L/C
Participant may have against the Issuing Lender, the Borrower or
any other Person for any reason whatsoever, (ii)&nbsp;the
occurrence or continuance of a Default or an Event of Default or
the failure to satisfy any of the other conditions specified in
Section&nbsp;5, (iii)&nbsp;any adverse change in the condition
(financial or otherwise) of the Borrower, (iv)&nbsp;any breach of
this Agreement or any other Loan Document by the Borrower, any
other Borrower or any other L/C Participant or (v)&nbsp;any other
circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing.</a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;If any amount (a &ldquo;<u>Participation
Amount</u>&rdquo;) required to be paid by any L/C Participant to an
Issuing Lender pursuant to Section&nbsp;3.4(a) in respect of any
unreimbursed portion of any payment made by such Issuing Lender
under any Letter of Credit is paid to such Issuing Lender within
three Business Days after the date such payment is due, such
Issuing Lender shall so notify the Administrative Agent, which
shall promptly notify the L/C Participants, and each L/C
Participant shall pay to the Administrative Agent, for the account
of such Issuing Lender, on demand (and thereafter the
Administrative Agent shall promptly pay to such Issuing Lender) an
amount equal to the product of (i)&nbsp;such Participation Amount,
<u>times</u> (ii)&nbsp;the daily average Federal Funds Effective
Rate during the period from and including the date such payment is
required to the date on which such payment is immediately available
to such Issuing Lender, <u>times</u> (iii)&nbsp;a fraction the
numerator of which is the number of days that elapse during such
period and the denominator of which is 360.&nbsp; If any
Participation Amount required to be paid by any L/C Participant
pursuant to Section&nbsp;3.4(a) is not made available to the
Administrative Agent for the account of the relevant Issuing Lender
by such L/C Participant within three Business Days after the date
such payment is due, the Administrative Agent on behalf of such
Issuing Lender shall be entitled to recover from such L/C
Participant, on demand, such Participation Amount with interest
thereon calculated from such due date at the rate per annum
applicable to ABR Loans.&nbsp; A certificate of the Administrative
Agent submitted on behalf of an Issuing Lender to any L/C
Participant with respect to any amounts owing under this Section
shall be conclusive in the absence of manifest error.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;Whenever, at any time after an Issuing Lender has
made payment under any Letter of Credit and has received from the
Administrative Agent any L/C Participant&rsquo;s pro rata share of
such payment in accordance with Section&nbsp;3.4(a), such Issuing
Lender receives any payment related to such Letter of Credit
(whether directly from the Borrower or otherwise, including
proceeds of collateral applied thereto by such Issuing Lender), or
any payment of interest on account thereof, such Issuing Lender
will distribute to the Administrative Agent for the account of such
L/C Participant (and thereafter the Administrative Agent will
promptly distribute to such&nbsp; L/C Participant) its pro rata
share thereof; <u>provided</u>, <u>however</u>, that in the event
that any such payment received by such Issuing Lender shall be
required to be returned by such Issuing Lender, such L/C
Participant shall return to the Administrative Agent for the
account of such Issuing Lender (and thereafter the Administrative
Agent shall promptly return to such Issuing Lender) the portion
thereof previously distributed by such Issuing Lender.</p>

<p><a name="_Toc15112845"></a><a name="_Ref64468152"></a><a name=
"_Ref64470795"></a><a name="_Ref64801411"></a><a name=
"_Toc98641102"></a><a name=
"_Toc100971146">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5&nbsp;&nbsp;<u>
Reimbursement Obligation of the Borrower</u></a>.&nbsp;&nbsp;The
Borrower agrees to reimburse each Issuing Lender on (i)&nbsp;the
Business Day on which the Borrower receives notice from an Issuing
Lender of a draft drawn on a Letter of Credit issued by such
Issuing Lender and paid by such Issuing Lender, if such notice is
received on such Business Day prior to 11:00&nbsp;A.M., New York
City time, or (ii)&nbsp;if clause&nbsp;(i) above does not apply,
the Business Day immediately following the day on which the
Borrower receives such notice, for the amount of (a)&nbsp;such
draft so paid and (b)&nbsp;any taxes, fees, charges or other costs
or expenses incurred by such Issuing Lender in connection with such
payment which are obligations of the Borrower hereunder (the
amounts described in the foregoing clauses&nbsp;(a) and (b) in
respect of any drawing, collectively, the &ldquo;<u>Payment
Amount</u>&rdquo;).&nbsp; Each such payment shall be made to such
Issuing Lender at its address for notices specified herein in
lawful money of the United States of America and in immediately
available funds.&nbsp; Interest shall be payable on each Payment
Amount from the date of the applicable drawing until payment in
full at the rate set forth in (i)&nbsp;until the second Business
Day following the date of the applicable drawing,
Section&nbsp;2.11(b) and (ii)&nbsp;thereafter,
Section&nbsp;2.11(c).&nbsp; Each drawing under any Letter of Credit
shall (unless an event of the type described in clause&nbsp;(i) or
(ii) of Section&nbsp;8(f) shall have occurred and be continuing
with respect to the Borrower, in which case the procedures
specified in Section&nbsp;3.4 for funding by L/C Participants shall
apply) constitute a request by the Borrower to the Administrative
Agent for a borrowing pursuant to Section&nbsp;2.1 of ABR Loans
(or, at the option of the Administrative Agent and the Swingline
Lender in their sole discretion, a borrowing pursuant to
Section&nbsp;2.4 of Swingline Loans) in the amount of such
drawing.&nbsp; The Borrowing Date with respect to such borrowing
shall be the first date on which a borrowing of Revolving Loans
(or, if applicable, Swingline Loans) could be made, pursuant to
Section&nbsp;2.1 (or, if applicable, Section&nbsp;2.4), if the
Administrative Agent had received a notice of such borrowing at the
time the Administrative Agent receives notice from the relevant
Issuing Lender of such drawing under such Letter of Credit.</p>

<p><a name="_Toc15112846"></a><a name="_Toc98641103"></a><a name=
"_Toc100971147">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6&nbsp;&nbsp;<u>
Obligations Absolute</u></a>.&nbsp;&nbsp;The Borrower&rsquo;s
obligations under this Section&nbsp;3 shall be absolute and
unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment that the Borrower
may have or have had against any Issuing Lender, any beneficiary of
a Letter of Credit or any other Person; other than with respect to
any action taken or omitted by an Issuing Lender under or in
connection with any Letter of Credit issued by it or the related
drafts or documents found to constitute gross negligence or willful
misconduct or not in accordance with the standards of care
specified in the Uniform Commercial Code of the State of New
York.&nbsp; The Borrower also agrees with each Issuing Lender that
such Issuing Lender shall not be responsible for, and the
Borrower&rsquo;s Reimbursement Obligations under Section&nbsp;3.5
shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even
though such documents shall in fact prove to be invalid, fraudulent
or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which
such Letter of Credit may be transferred or any claims whatsoever
of the Borrower against any beneficiary of such Letter of Credit or
any such transferee.&nbsp; No Issuing Lender shall be liable for
any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted,
in connection with any Letter of Credit, except for errors or
omissions which resulted from the gross negligence or willful
misconduct of such Issuing Lender.&nbsp; The Borrower agrees that
any action taken or omitted by an Issuing Lender under or in
connection with any Letter of Credit issued by it or the related
drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards or care
specified in the Uniform Commercial Code of the State of New York,
shall be binding on the Borrower and shall not result in any
liability of such Issuing Lender to the Borrower.</p>

<p><a name="_Toc15112847"></a><a name="_Toc98641104"></a><a name=
"_Toc100971148">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7&nbsp;&nbsp;<u>
Letter of Credit Payments</u></a>.&nbsp;&nbsp;If any draft shall be
presented for payment under any Letter of Credit, the relevant
Issuing Lender shall promptly notify the Borrower and the
Administrative Agent of the date and amount thereof.&nbsp; The
responsibility of the relevant Issuing Lender to the Borrower in
connection with any draft presented for payment under any Letter of
Credit, in addition to any payment obligation expressly provided
for in such Letter of Credit issued by such Issuing Lender, shall
be limited, in the absence of gross negligence or willful
misconduct or failure to act in accordance with the standards of
care specified in the Uniform Commercial Code of the State of New
York, to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such
presentment appear on their face to be in conformity with such
Letter of Credit.</p>

<p><a name="_Toc15112848"></a><a name="_Toc98641105"></a><a name=
"_Toc100971149">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.8&nbsp;&nbsp;<u>
Applications</u></a>.&nbsp;&nbsp;To the extent that any provision
of any Application related to any Letter of Credit is inconsistent
with the provisions of this Section&nbsp;3, the provisions of this
Section&nbsp;3 shall apply.</p>

<p><a name="_Toc98641106"></a><a name=
"_Toc100971150">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9&nbsp;&nbsp;<u>
Actions of Issuing Lenders</u></a>.&nbsp;&nbsp;Each Issuing Lender
shall be entitled to rely, and shall be fully protected in relying,
upon any draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it in good
faith to be genuine and correct and to have been signed, sent or
made by the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other
experts selected by such Issuing Lender.&nbsp; Each Issuing Lender
shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first have received such
advice or concurrence of the Required Lenders as it reasonably
deems appropriate or it shall first be indemnified to its
reasonable satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. Notwithstanding any
other provision of this Section, as between the Issuing Lenders and
the Lenders, each Issuing Lender shall in all cases be fully
protected in acting, or in refraining from acting, under this
Agreement in accordance with a request of the Required Lenders, and
such request and any action taken or failure to act pursuant
thereto shall be binding upon the Lenders and any future holders of
a participation in any Letter of Credit.</p>

<p><a name="_Toc98641107"></a><a name=
"_Toc100971151">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.10&nbsp;&nbsp;<u>
Borrower&rsquo;s Indemnification</u></a>.&nbsp;&nbsp;The Borrower
hereby agrees to indemnify and hold harmless each Lender, each
Issuing Lender and the Administrative Agent, and their respective
directors, officers, agents and employees from and against any and
all claims and damages, losses, liabilities, costs or expenses
which such Lender, such Issuing Lender or the Administrative Agent
may incur (or which may be claimed against such Lender, such
Issuing Lender or the Administrative Agent by any Person
whatsoever) by reason of or in connection with the issuance,
execution and delivery or transfer of or payment or failure to pay
under any Letter of Credit or any actual or proposed use of any
Letter of Credit, including, without limitation, any claims,
damages, losses, liabilities, costs or expenses which such Issuing
Lender may incur by reason of or in connection with (i)&nbsp;the
failure of any other Lender to fulfill or comply with its
obligations to an Issuing Lender hereunder (but nothing herein
contained shall affect any rights the Borrower may have against any
defaulting Lender) or (ii) by reason of or on account of an Issuing
Lender issuing any Letter of Credit which specifies that the term
&ldquo;Beneficiary&rdquo; included therein includes any successor
by operation of law of the named Beneficiary, but which Letter of
Credit does not require that any drawing by any such successor
Beneficiary be accompanied by a copy of a legal document,
satisfactory to such Issuing Lender, evidencing the appointment of
such successor Beneficiary; <u>provided</u> that the Borrower shall
not be required to indemnify any Lender, any Issuing Lender or the
Administrative Agent for any claims, damages, losses, liabilities,
costs or expenses to the extent, but only to the extent, caused by
(x)&nbsp;the willful misconduct or gross negligence of such Issuing
Lender in determining whether a request presented under any Letter
of Credit complied with the terms of such Letter of Credit and in
accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York or (y)&nbsp;such Issuing
Lender&rsquo;s failure to pay under any Letter of Credit after the
presentation to it of a request strictly complying with the terms
and conditions of such Letter of Credit.&nbsp; Nothing in this
Section is intended to limit the obligations of the Borrower under
any other provision of this Agreement.</p>

<p><a name="_Toc98641108"></a><a name=
"_Toc100971152">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.11&nbsp;&nbsp;<u>
Lenders&rsquo; Indemnification</u></a>.&nbsp;&nbsp;Each Lender
shall, ratably in accordance with its Percentage, indemnify each
Issuing Lender, its affiliates and their respective directors,
officers, agents and employees (to the extent not reimbursed by the
Borrower) against any cost, expense (including reasonable counsel
fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees&rsquo; gross
negligence or willful misconduct or failure to comply with the
standard of care specified in the Uniform Commercial Code of the
State of New York or such Issuing Lender&rsquo;s failure to pay
under any Letter of Credit after the presentation to it of a
request strictly complying with the terms and conditions of the
Letter of Credit) that such indemnitees may suffer or incur in
connection with this Section or any action taken or omitted by such
indemnitees hereunder.</p>

<p align="center"><a name="_Toc98641109"></a><a name=
"_Toc100971153">SECTION 4. &nbsp;&nbsp;REPRESENTATIONS AND
WARRANTIES</a><br />
</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Borrower hereby represents and warrants to
the Administrative Agent and each Lender, on the Effective Date
and, except as provided in Section 5.2(b), on the date of each
Credit Event hereunder after the Effective Date, that:</p>

<p><a name="_Ref64471278"></a><a name="_Toc98641110"></a><a name=
"_Toc100971154">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1&nbsp;&nbsp;<u>
Financial Condition</u></a><a name="_Ref64117533">.&nbsp;&nbsp;The
audited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as of December&nbsp;31, 2004, and the
related consolidated statement of operations and cash flows for the
fiscal year ended on such date, reported on by Deloitte &amp;
Touche LLP, present fairly in all material respects the
consolidated financial condition of the Borrower and its
consolidated Subsidiaries as of such date, and the consolidated
results of its operations and its consolidated cash flows for the
respective fiscal year then ended.&nbsp; All such financial
statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently
throughout the periods involved.&nbsp;</a></p>

<p><a name="_Toc98641111"></a><a name=
"_Toc100971155">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2&nbsp;&nbsp;<u>
No Change</u></a>.&nbsp;&nbsp;Since December&nbsp;31, 2004, there
has been no development or event that has had or could reasonably
be expected to have a Material Adverse Effect, except as disclosed
in the Specified Exchange Act Filings.</p>

<p><a name="_Toc98641112"></a><a name=
"_Toc100971156">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3&nbsp;&nbsp;<u>
Existence; Compliance with Law</u></a>.&nbsp;&nbsp;Each of the
Borrower and its Significant Subsidiaries (a)&nbsp;is duly
organized, validly existing and in good standing under the laws of
its jurisdiction of organization, (b)&nbsp;has the corporate power
and corporate authority to own and operate its property, to lease
the property it operates as lessee and to conduct the business in
which it is currently engaged, (c)&nbsp;is duly qualified as a
foreign corporation or other organization and in good standing
under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification except to the extent that the failure to so qualify
could not reasonably be expected to have a Material Adverse Effect
and (d)&nbsp;is in compliance with all Requirements of Law except
to the extent that the failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse
Effect.</p>

<p><a name="_Ref64114524"></a><a name="_Toc98641113"></a><a name=
"_Toc100971157">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4&nbsp;&nbsp;<u>
Power; Authorization; Enforceable
Obligations</u></a>.&nbsp;&nbsp;The Borrower has the corporate
power and corporate authority to make, deliver and perform the Loan
Documents and to obtain extensions of credit hereunder.&nbsp; The
Borrower has taken all necessary corporate action to authorize the
execution, delivery and performance of the Loan Documents and to
authorize the extensions of credit on the terms and conditions of
this Agreement.&nbsp; No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the
extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement or any of
the Loan Documents (other than the Indenture), except
(i)&nbsp;consents, authorizations, filings and notices which have
been obtained or made and are in full force and effect, (ii) any
filing that may be required in the future the failure of which to
obtain could not reasonably be expected to have a Material Adverse
Effect and (iii) applicable regulatory requirements (including the
approval of the CPUC) prior to foreclosure under the
Indenture.&nbsp; This Agreement has been, and each other Loan
Document upon execution and delivery will be, duly executed and
delivered.&nbsp; This Agreement constitutes, and each other Loan
Document upon execution will constitute, a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited
by (x) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of
creditors&rsquo; rights generally, laws of general application
related to the enforceability of securities secured by real estate
and by general equitable principles (whether enforcement is sought
by proceedings in equity or at law) and (y)&nbsp;applicable
regulatory requirements (including the approval of the CPUC) prior
to foreclosure under the Indenture.</p>

<p><a name="_Toc98641114"></a><a name=
"_Toc100971158">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5&nbsp;&nbsp;<u>
No Legal Bar</u></a>.&nbsp;&nbsp;The execution, delivery and
performance of this Agreement and the other Loan Documents, the
issuance of Letters of Credit, the borrowings hereunder and the use
of the proceeds thereof will not violate in any material respect
any Requirement of Law or any Contractual Obligation of the
Borrower or any of its Significant Subsidiaries and will not result
in, or require, the creation or imposition of any Lien on any of
their respective properties or revenues pursuant to any Requirement
of Law or any such Contractual Obligation (other than the Liens
created by the Indenture and the Bond Delivery Agreement).&nbsp; No
Requirement of Law or Contractual Obligation applicable to the
Borrower or any of its Significant Subsidiaries is reasonably
likely to have a Material Adverse Effect.</p>

<p><a name="_Ref65331205"></a><a name="_Toc98641115"></a><a name=
"_Toc100971159">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6&nbsp;&nbsp;<u>
Litigation</u></a>.&nbsp;&nbsp;(a)&nbsp;&nbsp;No litigation,
investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the
Borrower, threatened in writing by or against the Borrower or any
of its Significant Subsidiaries or against any of their material
respective properties or revenues with respect to any of the Loan
Documents.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to
the knowledge of the Borrower, threatened in writing by or against
the Borrower or any of its Significant Subsidiaries or against any
of their material respective properties or revenues, except as
disclosed in the Specified Exchange Act Filings, that could
reasonably be expected to have a Material Adverse Effect.</p>

<p><a name="_Toc98641116"></a><a name=
"_Toc100971160">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7&nbsp;&nbsp;<u>
No Default</u></a>.&nbsp;&nbsp;Neither the Borrower nor any of its
Significant Subsidiaries is in default under or with respect to any
of its Contractual Obligations in any respect that could reasonably
be expected to have a Material Adverse Effect.&nbsp; No Default or
Event of Default has occurred and is continuing.</p>

<p><a name="_Toc98641117"></a><a name=
"_Toc100971161">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8&nbsp;&nbsp;<u>
Taxes</u></a>.&nbsp;&nbsp;The Borrower and each of its Significant
Subsidiaries has filed or caused to be filed all Federal and state
returns of income and franchise taxes imposed in lieu of net income
taxes and all other material tax returns that are required to be
filed and has paid all taxes shown to be due and payable on said
returns or with respect to any claims or assessments for taxes made
against it or any of its property by any Governmental Authority
(other than (i)&nbsp;any amounts the validity of which are
currently being contested in good faith by appropriate proceedings
and with respect to which reserves in conformity with GAAP have
been provided on the books of the Borrower or any of its
Significant Subsidiaries, as applicable, and (ii)&nbsp;claims which
could not reasonably be expected to have a Material Adverse
Effect).&nbsp; No tax Liens have been filed against the Borrower or
any of its Significant Subsidiaries other than (A)&nbsp;Liens for
taxes which are not delinquent or (B)&nbsp;Liens for taxes which
are being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been
provided on the books of the Borrower or any of its Significant
Subsidiaries, as applicable.</p>

<p><a name="_Toc98641118"></a><a name=
"_Toc100971162">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9&nbsp;&nbsp;<u>
Federal Regulations</u></a>.&nbsp;&nbsp;No part of the proceeds of
any Loans, and no other extensions of credit hereunder, will be
used for &ldquo;buying&rdquo; or &ldquo;carrying&rdquo; any
&ldquo;margin stock&rdquo; within the respective meanings of each
of the quoted terms under Regulation&nbsp;U as now and from time to
time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board.</p>

<p><a name="_Toc98641119"></a><a name=
"_Toc100971163">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10&nbsp;&nbsp;<u>
ERISA</u></a>.&nbsp;&nbsp;Neither a Reportable Event (other than
the Post-event Notices of Reportable Events filed with the PBGC on
May&nbsp;2, 2001, in respect of the April&nbsp;6, 2001, bankruptcy
filing of the Borrower, on July&nbsp;16, 2003, in respect of the
July&nbsp;8, 2003, bankruptcy filing of National Energy &amp; Gas
Transmission (&ldquo;<u>NEGT</u>&rdquo;), and on November 4, 2004,
in respect of the departure of NEGT from the Borrower controlled
group of companies on October 29, 2004) nor an &ldquo;accumulated
funding deficiency&rdquo; (within the meaning of Section&nbsp;412
of the Code or Section&nbsp;302 of ERISA) has occurred during the
five&#8209;year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and
each Plan has complied with the applicable provisions of ERISA and
the Code, except, in each case, to the extent that any such
Reportable Event, &ldquo;accumulated funding deficiency&rdquo; or
failure to comply with the applicable provisions of ERISA or the
Code could not reasonably be expected to result in a Material
Adverse Effect.&nbsp; No termination of a Single Employer Plan has
occurred, and no Lien in favor of the PBGC or a Plan has arisen,
during such five-year period.&nbsp; The present value of all
accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan
allocable to such accrued benefits by a material amount.&nbsp;
Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan that has
resulted or could reasonably be expected to result in a material
liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability
under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the
valuation date most closely preceding the date on which this
representation is made or deemed made.&nbsp; No such Multiemployer
Plan is in Reorganization or Insolvent.</p>

<p><a name="_Toc98641120"></a><a name=
"_Toc100971164">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11&nbsp;&nbsp;<u>
Investment Company Act; Other Regulations</u></a>.&nbsp;&nbsp;The
Borrower is not an &ldquo;investment company&rdquo;, or a company
&ldquo;controlled&rdquo; by an &ldquo;investment company&rdquo;,
within the meaning of the Investment Company Act of 1940, as
amended.&nbsp; On the date hereof, the Borrower is not subject to
regulation under any Requirement of Law (other than
(a)&nbsp;Regulation&nbsp;X of the Board and
(b)&nbsp;Sections&nbsp;817-830, and Sections 701 and 851 of the
California Public Utilities Code) that limits its ability to incur
Indebtedness under this Agreement.</p>

<p><a name="_Toc98641121"></a><a name=
"_Toc100971165">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.12&nbsp;&nbsp;<u>
Use of Proceeds</u></a>.&nbsp;&nbsp;The proceeds of the Revolving
Loans, the Swingline Loans and the Letters of Credit shall be used
(i)&nbsp;to refinance any debt outstanding under the Existing
Credit Agreement, (ii)&nbsp;for working capital purposes and
(iii)&nbsp;for general corporate purposes, including commercial
paper back-up.&nbsp;</p>

<p><a name="_Ref65331219"></a><a name="_Toc98641122"></a><a name=
"_Toc100971166">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.13&nbsp;&nbsp;<u>
Environmental Matters</u></a>.&nbsp;&nbsp;Except as
(i)&nbsp;disclosed in the Specified Exchange Act Filings or
(ii)&nbsp;in the aggregate, could not reasonably be expected to
have a Material Adverse Effect:</p>

<p><a name=
"_Ref64118327">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;the facilities and properties owned, leased or
operated by the Borrower and its Significant Subsidiaries (the
&ldquo;<u>Properties</u>&rdquo;) do not contain, and, to the
Borrower&rsquo;s knowledge, have not previously contained, any
Materials of Environmental Concern in amounts or concentrations or
under circumstances that constitute or constituted a violation of,
or, to the Borrower&rsquo;s knowledge, would give rise to liability
under, any Environmental Law;</a></p>

<p><a name=
"_Ref64116390">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;neither the Borrower nor any of its Significant
Subsidiaries has received or is aware of any notice of violation,
alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental
Laws with regard to any of the Properties or the business operated
by the Borrower and its Significant Subsidiaries (the
&ldquo;<u>Business</u>&rdquo;), nor does the Borrower have
knowledge or reason to believe that any such notice will be
received or is being threatened;</a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or
in a manner or to a location that, to the Borrower&rsquo;s
knowledge, would give rise to liability under, any Environmental
Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of
the Properties in violation of, or in a manner that, to the
Borrower&rsquo;s knowledge, would give rise to liability under, any
applicable Environmental Law;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;no judicial proceeding or governmental or
administrative action is pending or, to the knowledge of the
Borrower, threatened, under any Environmental Law to which the
Borrower or any of its Significant Subsidiaries is or will be named
as a party with respect to the Properties or the Business, nor are
there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to the Properties or the Business;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;there has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of the Borrower or any of
its Significant Subsidiaries in connection with the Properties or
otherwise in connection with the Business, in violation of or in
amounts or in a manner that, to the Borrower&rsquo;s knowledge,
would give rise to liability under Environmental Laws;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;the Properties and all operations at the Properties
are in compliance, and have in the last five years been in
compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the Business;
and</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;&nbsp;neither the Borrower nor any of its Significant
Subsidiaries has assumed any liability of any other Person under
Environmental Laws.</p>

<p><a name="_Toc98641123"></a><a name=
"_Toc100971167">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.14&nbsp;&nbsp;<u>
Accuracy of Information, etc</u></a>.&nbsp;&nbsp;No statement or
information (other than projections, if any, and <u>pro</u>
<u>forma</u> information) contained in this Agreement, any other
Loan Document, the Information Memorandum or any other document,
certificate or statement furnished by or on behalf of the Borrower
to the Administrative Agent or the Lenders, or any of them, for use
in connection with the transactions contemplated by this Agreement
or the other Loan Documents, contained as of the date such
statement, information, document or certificate was so furnished
(or, in the case of the Information Memorandum, as of the date of
this Agreement), any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements contained
herein or therein not misleading when taken as a whole.&nbsp; The
projections, if any, and <u>pro</u> <u>forma</u> financial
information contained in the materials referenced above are based
upon good faith estimates and assumptions believed by management of
the Borrower to be reasonable at the time made, it being recognized
by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information
may differ from the projected results set forth therein by a
material amount.&nbsp; There is no fact known to the Borrower that
could reasonably be expected to have a Material Adverse Effect that
has not been expressly disclosed herein, in the other Loan
Documents, in the Information Memorandum (including any attachments
thereto), the Specified Exchange Act Filings or in any other
documents, certificates and statements furnished to the
Administrative Agent and the Lenders for use in connection with the
transactions contemplated hereby and by the other Loan
Documents.</p>

<p><a name="_Toc98641124"></a><a name=
"_Toc100971168">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.15&nbsp;&nbsp;<u>
Regulatory Matters</u></a>.&nbsp; (a)&nbsp;&nbsp;Neither the
Borrower nor any Significant Subsidiary of the Borrower is&nbsp; a
&ldquo;holding company&rdquo; or a &ldquo;subsidiary company&rdquo;
or an &ldquo;affiliate&rdquo; of a &ldquo;holding company&rdquo; or
a company which is required to be registered as a &ldquo;holding
company&rdquo; as such terms are defined under PUHCA, except that
each of the Borrower and its Significant Subsidiaries is a
&ldquo;subsidiary company&rdquo; of PCG, which is a &ldquo;holding
company&rdquo; exempt from all provisions of PUHCA (except for
Section&nbsp;9(a)(2) thereof) pursuant to Section&nbsp;3(a)(i)
thereof and Rule&nbsp;2 thereunder.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;Solely by virtue of the execution, delivery and
performance of, or the consummation of the transactions
contemplated by this Agreement, no Lender shall be or become
subject to regulation (i)&nbsp;as a &ldquo;holding company,&rdquo;
or an &ldquo;affiliate&rdquo; of a &ldquo;holding company&rdquo; or
a &ldquo;subsidiary company&rdquo; of a &ldquo;holding
company,&rdquo; within the meaning of PUHCA, (ii)&nbsp;under the
FPA or (iii)&nbsp;as a &ldquo;public utility&rdquo; or
&ldquo;public service corporation&rdquo; or the equivalent under
any Requirement of Law.</p>

<p align="center"><a name="_Ref64126208"></a><a name=
"_Toc98641125"></a><a name="_Toc100971169"><br />
SECTION 5.&nbsp;&nbsp;CONDITIONS PRECEDENT</a><br />
</p>

<p><a name="_Ref64115507"></a><a name="_Ref64116559"></a><a name=
"_Ref64803069"></a><a name="_Toc98641126"></a><a name=
"_Toc100971170">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1&nbsp;&nbsp;<u>
Conditions to</u> <u>the Effective Date</u></a>.&nbsp;&nbsp;The
occurrence of the Effective Date is subject to the satisfaction of
the following conditions precedent:</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;<u>Credit Agreement</u>.&nbsp; The Administrative
Agent shall have received this Agreement, executed and delivered by
the Administrative Agent, the Borrower and each Person listed on
<u>Schedule&nbsp;1.1A</u>.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;<u>Bond Delivery Agreement; Senior Bond</u>.&nbsp;
Unless the Release Date occurs on or prior to the Effective Date,
the Administrative Agent shall have received:</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;the Bond Delivery Agreement, duly executed and
delivered by the Borrower;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;&nbsp;the Senior Bond in a face amount equal to the Total
Commitments as of the Effective Date, duly issued and authenticated
under the Indenture;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iii)&nbsp;&nbsp;a certificate of a duly authorized officer of the
Indenture Trustee certifying that the Senior Bond has been
authenticated and is outstanding under the Indenture;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iv)&nbsp;&nbsp;satisfactory evidence that all filings necessary to
perfect the Liens in favor of the Indenture Trustee, for the
benefit of the Lenders and the holders of the Senior Bond Indenture
Securities, on the Mortgaged Property (other than any Mortgaged
Property acquired after the recording of the Indenture) shall have
been made or taken to the extent such perfection can be
accomplished by filing;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(v)&nbsp;&nbsp;a certificate of a Responsible Officer certifying
that attached thereto is a true copy of the Indenture and of any
supplement thereto that is applicable to the Senior Bond;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(vi)&nbsp;&nbsp;copies of all legal opinions and other documents
delivered to the Indenture Trustee by or on behalf of the Borrower
in connection with the issuance of the Senior Bond; and</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(vii)the Escrow Deposit and Disbursement Agreement, duly executed
and delivered by the Borrower and the Indenture Trustee.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;<u>Financial Statements</u>.&nbsp; The Lenders shall
have received the financial statements described in
Section&nbsp;4.1.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;<u>Consents and Approvals</u>.&nbsp; All
governmental and third party consents and approvals necessary in
connection with this Agreement and the other Loan Documents (other
than the Indenture) and the transactions contemplated hereby shall
have been obtained and be in full force and effect; and the
Administrative Agent shall have received a certificate of a
Responsible Officer to the foregoing effect.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;<u>Fees</u>.&nbsp; The Lenders, the Arrangers and
the Administrative Agent shall have received all fees required to
be paid, and all expenses for which invoices have been presented
(including the reasonable fees and expenses of legal counsel), on
or before the Effective Date.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;<u>Closing Certificate; Certified Articles of
Incorporation; Good Standing Certificates</u>.&nbsp; The
Administrative Agent shall have received (i)&nbsp;a certificate of
the Borrower, dated the Effective Date, substantially in the form
of Exhibit&nbsp;E, with appropriate insertions and attachments,
including the articles of incorporation of the Borrower certified
by the Secretary of State of the State of California, and
(ii)&nbsp;a good standing certificate for the Borrower from the
Secretary of State of the State of California; such closing
certificate shall contain a confirmation by the Borrower that the
conditions precedent set forth in this Section&nbsp;5.1 have been
satisfied.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;&nbsp;<u>Legal Opinions</u>.&nbsp; The Administrative
Agent shall have received the following executed legal
opinions:</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;the legal opinion of Orrick, Herrington &amp;
Sutcliffe LLP, special counsel on behalf of the Borrower, opining
as to corporate matters, substantially in the form of
Exhibit&nbsp;G-1;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;&nbsp;the legal opinion of Orrick, Herrington &amp;
Sutcliffe LLP, special counsel on behalf of the Borrower, opining
as to regulatory matters, substantially in the form of
Exhibit&nbsp;G-2; and</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iii)&nbsp;&nbsp;legal opinion of Bruce R. Worthington, Esq.,
counsel to the Borrower, substantially in the form of
Exhibit&nbsp;G-3.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(h)&nbsp;&nbsp;<u>Representations and Warranties</u>.&nbsp; Each of
the representations and warranties made by the Borrower in this
Agreement that does not contain a materiality qualification shall
be true and correct in all material respects on and as of the
Effective Date, and each of the representations and warranties made
by the Borrower in this Agreement that contains a materiality
qualification shall be true and correct on and as of the Effective
Date (or, to the extent such representations and warranties
specifically relate to an earlier date, that such representations
and warranties were true and correct in all material respects, or
true and correct, as the case may be, as of such earlier date).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;<u>No Default</u>.&nbsp; No Default or Event of
Default shall have occurred and be continuing.</p>

<p><a name="_Toc98641127"></a><a name=
"_Toc100971171">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2&nbsp;&nbsp;<u>
Conditions to Each Credit Event</u>.</a>&nbsp;&nbsp;The agreement
of each Lender to make any Loan or to issue or extend the expiry
date under, or participate in, a Letter of Credit (other than the
extension of a Letter of Credit pursuant to the evergreen
provisions therein) (each, a &ldquo;<u>Credit Event</u>&rdquo;),
including each Issuing Lender to issue a Letter of Credit, on any
date (including any Credit Event to occur on the Effective Date) is
subject to the satisfaction of the following conditions
precedent:</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;<u>Satisfaction of Conditions Precedent in Section
5.1</u>.&nbsp; The conditions set precedent set forth in
Section&nbsp;5.1 shall have been satisfied or waived in accordance
with this Agreement as of the Effective Date.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;<u>Representations and Warranties</u>.&nbsp; Each of
the representations and warranties made by the Borrower in this
Agreement that does not contain a materiality qualification (other
than, with respect to any Credit Event after the Effective Date,
the representations and warranties set forth in Section 4.2 and
4.6(b)) shall be true and correct in all material respects on and
as of the date of such Credit Event as if made on and as of such
date, and each of the representations and warranties made by the
Borrower in this Agreement that contains a materiality
qualification <a name="_DV_C14">(other than the representations and
warranties set forth in Sections 4.2 and 4.6(b))</a>shall be true
and correct on and as of such date (or, to the extent such
representations and warranties specifically relate to an earlier
date, that such representations and warranties were true and
correct in all material respects, or true and correct, as the case
may be, as of such earlier date).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;<u>No Default</u>.&nbsp; No Default or Event of
Default shall have occurred and be continuing on the date of such
Credit Event or after giving effect to the Credit Event requested
to be made on such date.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
borrowing of Loans hereunder, and each request by the Borrower for
the issuance of or extension of an expiry date under a Letter of
Credit hereunder (other than the extension of a Letter of Credit
pursuant to the evergreen provisions therein), shall constitute a
representation and warranty by the Borrower as of the date of such
Credit Event that the conditions contained in this Section&nbsp;5.2
have been satisfied.</p>

<p align="center"><a name="_Toc98641128"></a><a name=
"_Toc100971172">SECTION 6.&nbsp;&nbsp;AFFIRMATIVE COVENANTS</a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Borrower hereby agrees that, so long as the Commitments remain in
effect, or any Letter of Credit, any Loan, any interest on any Loan
or any fee payable to any Lender or the Administrative Agent
hereunder remains outstanding, or any other amount then due and
payable is owing to any Lender or the Administrative Agent
hereunder, the Borrower shall and with respect to Sections 6.3 and
6.6(b), shall cause its Significant Subsidiaries to:</p>

<p><a name="_Ref64118199"></a><a name="_Toc98641129"></a><a name=
"_Toc100971173">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1&nbsp;&nbsp;<u>
Financial Statements</u></a>.&nbsp;&nbsp;Furnish to the
Administrative Agent with a copy for each Lender, and the
Administrative Agent shall deliver to each Lender:</p>

<p><a name=
"_Ref64127068">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;as soon as available, but in any event within
120&nbsp;days after the end of each fiscal year of the Borrower, a
copy of the audited consolidated balance sheet of the Borrower and
its consolidated Subsidiaries as at the end of such year and the
related audited consolidated statements of operations and cash
flows for such year, setting forth in each case in comparative form
the figures for the previous year, reported on without a
&ldquo;going concern&rdquo; or like qualification or exception, or
qualification arising out of the scope of the audit, by Deloitte
&amp; Touche LLP or other independent certified public accountants
of nationally recognized standing;</a> and</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;as soon as available, but in any event not later
than 60&nbsp;days after the end of each of the first three
quarterly periods of each fiscal year of the Borrower, the
unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such quarter and the
related unaudited consolidated statements of operations and cash
flows for such quarter and the portion of the fiscal year through
the end of such quarter, setting forth in each case in comparative
form the figures for the previous year, certified by a Responsible
Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments).</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
such financial statements shall be complete and correct in all
material respects and shall be prepared in reasonable detail and in
accordance with GAAP applied (except as approved by such
accountants or officer, as the case may be, and disclosed in
reasonable detail therein) consistently throughout the periods
reflected therein and with prior periods.&nbsp; The Borrower shall
be deemed to have delivered the financial statements required to be
delivered pursuant to this Section&nbsp;6.1 upon the filing of such
financial statements by the Borrower through the SEC&rsquo;s EDGAR
system or the publication by the Borrower of such financial
statements on its website.</p>

<p><a name="_Toc98641130"></a><a name=
"_Toc100971174">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2&nbsp;&nbsp;<u>
Certificates; Other Information</u></a>.&nbsp;&nbsp;Furnish to the
Administrative Agent with a copy for each Lender (or, in the case
of clause&nbsp;(c), the relevant Lender), and the Administrative
Agent shall deliver to each Lender:</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;within two days after the delivery of any financial
statements pursuant to Section&nbsp;6.1, (i)&nbsp;a certificate of
a Responsible Officer stating that such Responsible Officer has
obtained no knowledge of any Default or Event of Default except as
specified in such certificate and (ii)&nbsp;in the case of
quarterly or annual financial statements, a Compliance Certificate,
substantially in the form of Exhibit D, containing all information
and calculations reasonably necessary for determining compliance by
the Borrower with the provisions of this Agreement referred to
therein as of the last day of the fiscal quarter or fiscal year of
the Borrower, as the case may be;</p>

<p><a name=
"_Ref64256498">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;within five days after the same are sent, copies of
all financial statements and reports that the Borrower sends to the
holders of any class of its debt securities or public equity
securities and, within five days after the same are filed, copies
of all financial statements and reports that the Borrower may make
to, or file with, the SEC, <u>provided</u> that, such financial
statements and reports shall be deemed to have delivered upon the
filing of such financial statements and reports by the Borrower
through the SEC&rsquo;s EDGAR system or publication by the Borrower
of such financial statements and reports on its website</a>;
and</p>

<p><a name=
"_Ref64129144">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;promptly, such additional financial and other
information as any Lender, through the Administrative Agent, may
from time to time reasonably request.</a></p>

<p><a name="_Toc98641131"></a><a name=
"_Toc100971175">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3&nbsp;&nbsp;<u>
Payment of Taxes</u></a>.&nbsp;&nbsp;Pay all taxes due and payable
or any other tax assessments made against the Borrower or any of
its Significant Subsidiaries or any of their respective property by
any Governmental Authority (other than (i)&nbsp;any amounts the
validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the
Borrower or any of its Significant Subsidiaries, as applicable or
(ii)&nbsp;where the failure to effect such payment could not
reasonably be expected to have a Material Adverse Effect).</p>

<p><a name="_Ref64129987"></a><a name="_Toc98641132"></a><a name=
"_Toc100971176">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4&nbsp;&nbsp;<u>
Maintenance of Existence;
Compliance</u></a>.&nbsp;&nbsp;(a)(i)&nbsp;&nbsp;Preserve, renew
and keep in full force and effect its organizational existence and
(ii)&nbsp;take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal
conduct of its business, except, in each case, as otherwise
permitted by Section&nbsp;7.3 and except, in the case of
clause&nbsp;(ii) above, to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and
(b)&nbsp;comply with all Contractual Obligations and Requirements
of Law except for any such Contractual Obligations or Requirements
of Law being contested in good faith by appropriate proceedings and
except to the extent that failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse
Effect.</p>

<p><a name="_Toc98641133"></a><a name=
"_Toc100971177">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5&nbsp;&nbsp;<u>
Maintenance of Property;
Insurance</u></a>.&nbsp;&nbsp;(a)&nbsp;&nbsp;Keep all property
useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted, except to the extent
that failure to do so could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect, and (b)&nbsp;maintain
with financially sound and reputable insurance companies insurance
on all its material property in at least such amounts and against
at least such risks as are usually insured against in the same
general area by companies engaged in the same or a similar business
of comparable size and financial strength and owning similar
properties in the same general areas in which the Borrower
operates, which may include self-insurance, if determined by the
Borrower to be reasonably prudent.</p>

<p><a name="_Toc98641134"></a><a name=
"_Toc100971178">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6&nbsp;&nbsp;<u>
Inspection of Property; Books and Records;
Discussions</u></a>.&nbsp;&nbsp;(a)&nbsp;&nbsp;Keep proper books of
records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of
all dealings and transactions in relation to its business and
activities and (b)&nbsp;unless a Default or Event of Default has
occurred and is continuing, not more than once a year and after at
least five Business Days&rsquo; notice, (i) permit representatives
of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any
reasonable time to discuss the business, operations, properties and
financial and other condition of the Borrower and its Significant
Subsidiaries with officers and employees of the Borrower and its
Significant Subsidiaries and (ii) use commercially reasonable
efforts to provide for the Lenders (in the presence of
representatives of the Borrower) to meet with the independent
certified public accountants of the Borrower and its Subsidiaries;
<u>provided</u>, that any such visits or inspections shall be
subject to such conditions as the Borrower and each of its
Significant Subsidiaries shall deem necessary based on reasonable
considerations of safety and security; and <u>provided</u>,
<u>further</u>, that neither the Borrower nor any Significant
Subsidiary shall be required to disclose to any Lender or its
agents or representatives any information which is subject to the
attorney-client privilege or attorney work-product privilege
properly asserted by the applicable Person to prevent the loss of
such privilege in connection with such information or which is
prevented from disclosure pursuant to a confidentiality agreement
with third parties.</p>

<p><a name="_Ref64129288"></a><a name="_Toc98641135"></a><a name=
"_Toc100971179">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7&nbsp;&nbsp;<u>
Notices</u></a>.&nbsp;&nbsp;Promptly give notice to the
Administrative Agent with a copy for each Lender of, and the
Administrative Agent shall deliver such notice to each Lender:</p>

<p><a name=
"_Ref64130012">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;the occurrence of any Default or Event of
Default;</a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;any litigation or proceeding or, to the knowledge of
the Borrower, any investigation that, in each case, may exist at
any time between the Borrower or any of its Significant
Subsidiaries and any Governmental Authority, including
environmental proceedings, that could reasonably be expected to
have a Material Adverse Effect;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;any change in the Rating issued by either S&amp;P or
Moody&rsquo;s;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;any litigation or proceeding to which the Borrower
or any of its Significant Subsidiaries is a party (i)&nbsp;the
primary purpose of which is to challenge the legality, validity or
enforceability of the Loan Documents, (ii)&nbsp;seeks to prohibit
the ownership or operation by the Borrower or any of its
Significant Subsidiaries of all or a material portion of their
respective businesses or assets, or (iii)&nbsp;the primary purpose
of which is to challenge the issuance or validity of the Senior
Bond;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;the following events, as soon as possible and in any
event within 30&nbsp;days after the Borrower knows thereof:&nbsp;
(i)&nbsp;the occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency
of, any Multiemployer Plan or (ii)&nbsp;the institution of
proceedings or the taking of any other action by the PBGC or the
Borrower or any Commonly Controlled Entity or any Multiemployer
Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan; and</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;any development or event (other than any litigation
or proceeding) that has had or could reasonably be expected to have
a Material Adverse Effect.</p>

<p><a name="_Ref64472725"></a><a name="_Toc98641136"></a><a name=
"_Toc100971180">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.8&nbsp;&nbsp;<u>
Maintenance of Licenses, etc.</u></a>&nbsp;&nbsp;Maintain in full
force and effect any authorization, consent, license or approval of
any Governmental Authority necessary for the conduct of the
Borrower&rsquo;s business as now conducted by it or necessary in
connection with this Agreement, except to the extent the failure to
do so could not reasonably be expected to have a Material Adverse
Effect.</p>

<p align="center"><a name="_Ref64130031"></a><a name=
"_Toc98641137"></a><a name="_Toc100971181">SECTION
7.&nbsp;&nbsp;NEGATIVE COVENANTS</a><br />
</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Borrower hereby agrees that, so long as the Commitments remain in
effect, or any Letter of Credit, any Loan, or any interest on any
Loan or any fee payable to any Lender or the Administrative Agent
hereunder remains outstanding, or any other amount then due and
payable is owing to any Lender or the Administrative Agent
hereunder, the Borrower shall not and, with respect to Section 7.2,
shall not permit its Significant Subsidiaries to:</p>

<p><a name="_Ref64262307"></a><a name="_Toc98641138"></a><a name=
"_Toc100971182">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1&nbsp;&nbsp;<u>
Consolidated Capitalization Ratio</u></a>.&nbsp; Permit the
Consolidated Capitalization Ratio on the last day of any fiscal
quarter, from and after the last day of the first fiscal quarter
ending after the Effective Date, to exceed 0.65 to 1.0.</p>

<p><a name="_Toc98641139"></a><a name=
"_Toc100971183">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2&nbsp;&nbsp;<u>
Liens</u></a>.&nbsp;&nbsp;Create, incur, assume or suffer to exist
any Lien upon any assets of the Borrower or any Significant
Subsidiary, whether now owned or hereafter acquired, except for
(i)&nbsp;Liens securing the Borrower&rsquo;s obligations to the
Administrative Agent and the Lenders under this Agreement and the
other Loan Documents and (ii)&nbsp;Liens permitted by the
Indenture.</p>

<p><a name="_Ref64129211"></a><a name="_Toc98641140"></a><a name=
"_Toc100971184">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3&nbsp;&nbsp;<u>
Fundamental Changes</u></a>.&nbsp;&nbsp;&nbsp;&nbsp; Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or
Dispose of all or substantially all of its property or business
(including, without limitation, rental equipment or leasehold
interests and excluding the sale or transfer of any accounts
receivable or of any amounts that are accrued and recorded in a
regulatory account for collections by the Borrower, in each case,
in connection with a securitization transaction), except that the
Borrower may be merged, consolidated or amalgamated with another
Person or Dispose of all or substantially all of its property or
business so long as, after giving effect to such transaction, (a)
no Default or Event of Default shall have occurred and be
continuing, (b) either (i) the Borrower is the continuing or
surviving corporation of such merger, consolidation or amalgamation
or (ii) the continuing or surviving corporation of such merger,
consolidation or amalgamation, if not the Borrower or the
purchaser, shall have assumed all obligations of the Borrower under
the Loan Documents pursuant to arrangements reasonably satisfactory
to the Administrative Agent and (c)&nbsp;the ratings by
Moody&rsquo;s and S&amp;P of the continuing or surviving
corporation&rsquo;s or purchaser&rsquo;s senior, unsecured, non
credit-enhanced debt shall be at least the higher of (1) Baa3 from
Moody&rsquo;s <u>and</u> BBB- from S&amp;P and (2)&nbsp;the ratings
by such rating agencies of the Borrower&rsquo;s senior, unsecured,
non credit-enhanced debt in effect before the earlier of the
occurrence or the public announcement of such event.</p>

<p><a name=
"_Toc100971185">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4&nbsp;&nbsp;<u>
Release Date</u>.</a>&nbsp; At any time prior to the Release Date,
deliver or cause to be delivered a Company Order (as defined in the
Indenture) to the Indenture Trustee requesting a release of the
Lien of the Indenture on the Mortgaged Property pursuant to Section
8.12(c) of the Indenture.</p>

<p align="center"><a name="_Ref64117186"></a><a name=
"_Ref64117332"></a><a name="_Ref64130508"></a><a name=
"_Toc98641141"></a><a name="_Toc100971186">SECTION 8
&nbsp;&nbsp;EVENTS OF DEFAULT</a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
any of the following events shall occur and be continuing on or
after the Effective Date:</p>

<p><a name=
"_Ref64130088">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;the Borrower shall fail to pay any principal of any
Loan or Reimbursement Obligation when due in accordance with the
terms hereof; or the Borrower shall fail to pay any interest on any
Loan or Reimbursement Obligation, or any other amount payable
hereunder or under any other Loan Document, within five Business
Days after any such interest or other amount becomes due in
accordance with the terms hereof; or</a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;any representation or warranty made or deemed made
by the Borrower herein or in any other Loan Document or that is
contained in any certificate, document or financial or other
statement furnished by it at any time under or in connection with
this Agreement or any such other Loan Document shall prove to have
been inaccurate in any material respect on or as of the date made
or deemed made, unless, as of any date of determination, the facts
or circumstances to which such representation or warranty relates
have changed with the result that such representation or warranty
is true and correct in all material respects on such date; or</p>

<p><a name=
"_Ref64130090">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;the Borrower shall default in the observance or
performance of any agreement contained in Section 7.1 or Section
7.3 of this Agreement; or</a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;the Borrower shall default in the observance or
performance of any other agreement contained in this Agreement or
any other Loan Document (other than as provided in
paragraphs&nbsp;(a) through (c) of this Section), and such default
shall continue unremedied for a period of 30&nbsp;days after notice
to the Borrower from the Required Lenders; or<a name=
"_Ref64117718"></a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;the Borrower or any of its Significant Subsidiaries
shall (i)&nbsp;default in making any payment of any principal of
any Indebtedness (including any Guarantee Obligation, but excluding
the Loans) on the due date with respect thereto (after giving
effect to any period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created); or
(ii)&nbsp;default in making any payment of any interest on any such
Indebtedness beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created;
or (iii)&nbsp;default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is
to cause, or (in the case of all Indebtedness other than
Indebtedness under any Swap Agreement) to permit the holder or
beneficiary of such Indebtedness (or a trustee or agent on behalf
of such holder or beneficiary) to cause, with the giving of notice
if required, such Indebtedness to become due prior to its stated
maturity or (in the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable; <u>provided</u>, that a
default, event or condition described in clause&nbsp;(i), (ii) or
(iii) of this paragraph&nbsp;(e) shall not at any time constitute
an Event of Default unless, at such time, one or more defaults,
events or conditions of the type described in clauses&nbsp;(i),
(ii) and (iii) of this paragraph&nbsp;(e) shall have occurred and
be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate $100,000,000;
<u>provided</u> <u>further</u>, that unless payment of the Loans
hereunder has already been accelerated, if such default shall be
cured by the Borrower or such Significant Subsidiary or waived by
the holders of such Indebtedness and any acceleration of maturity
having resulted from such default shall be rescinded or annulled,
in each case, in accordance with the terms of such agreement or
instrument, without any modification of the terms of such
Indebtedness requiring the Borrower or such Significant Subsidiary
to furnish security or additional security therefor, reducing the
average life to maturity thereof or increasing the principal amount
thereof, or any agreement by the Borrower or such Significant
Subsidiary to furnish security or additional security therefor or
to issue in lieu thereof Indebtedness secured by additional or
other collateral or with a shorter average life to maturity or in a
greater principal amount, then any Default hereunder by reason
thereof shall be deemed likewise to have been thereupon cured or
waived; or</p>

<p><a name=
"_Ref64126086">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;(i)&nbsp;the Borrower or any of its Significant
Subsidiaries shall commence any case, proceeding or other action
(A)&nbsp;under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding&#8209;up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or
(B)&nbsp;seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any
substantial part of its assets, or the Borrower or any of its
Significant Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii)&nbsp;there shall be commenced
against the Borrower or any of its Significant Subsidiaries any
case, proceeding or other action of a nature referred to in
clause&nbsp;(i) above that (A)&nbsp;results in the entry of an
order for relief or any such adjudication or appointment or
(B)&nbsp;remains undismissed, undischarged or unbonded for a period
of 60&nbsp;days; or (iii)&nbsp;there shall be commenced against the
Borrower or any of its Significant Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or
any substantial part of its assets that results in the entry of an
order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60&nbsp;days
from the entry thereof; or (iv)&nbsp;the Borrower or any of its
Significant Subsidiaries shall generally not, or shall be unable
to, or shall admit in writing its inability to, pay its debts as
they become due; or</a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;&nbsp;a trustee shall be appointed to administer any Plan
under Section 4042 of ERISA, or the PBGC shall institute
proceedings to terminate, or to have a trustee appointed to
administer any Plan and such proceedings shall continue undismissed
or unstayed and in effect for a period of 30 days, and any such
event could reasonably be expected to result in a Material Adverse
Effect; or</p>

<p>(h)&nbsp;&nbsp;one or more judgments or decrees shall be entered
against the Borrower or any of its Significant Subsidiaries
involving in the aggregate a liability (not paid or, subject to
customary deductibles, fully covered by insurance as to which the
relevant insurance company has not denied coverage) of $100,000,000
or more, and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within
30&nbsp;days from the entry thereof; or</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;at any time after the Effective Date and prior to
the Release Date, (i)&nbsp;the Senior Bond shall cease to be
outstanding for any reason other than (A)&nbsp;the termination of
the Total Commitments, the payment in full of the Loans,
Reimbursement Obligations and other obligations then due and owing
under the Loan Documents and the termination or expiration of the
Letters of Credit or (B)&nbsp;the payment in full of the Senior
Bond, (ii)&nbsp;the Administrative Agent, on behalf of the Lenders,
shall cease (except as described in the foregoing clause&nbsp;(i))
at any time to be the holder of the Senior Bond for all purposes of
the Indenture (unless the Senior Bond is transferred by the
Administrative Agent) or (iii)&nbsp;the Lien of the Indenture shall
cease to constitute a valid and enforceable Lien on the Mortgaged
Property; or</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(j)&nbsp;&nbsp;there shall have occurred a Change of
Control.&nbsp;&nbsp;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;then,
and in any such event, (A)&nbsp;if such event is an Event of
Default specified in clause&nbsp;(i) or (ii) of paragraph&nbsp;(f)
above with respect to the Borrower, automatically the Commitments
shall immediately terminate and the Loans (with accrued interest
thereon) and all other amounts owing under this Agreement and the
other Loan Documents (including all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder)
shall immediately become due and payable, and (B)&nbsp;if such
event is any other Event of Default, either or both of the
following actions may be taken: (i)&nbsp;with the consent of the
Required Lenders, the Administrative Agent may, or upon the request
of the Required Lenders, the Administrative Agent shall, by notice
to the Borrower declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and
(ii)&nbsp;with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents
(including all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and
payable.&nbsp; With respect to all Letters of Credit with respect
to which presentment for honor shall not have occurred at the time
of an acceleration pursuant to this paragraph, the Borrower shall
at such time deposit in a cash collateral account opened by the
Administrative Agent an amount equal to the aggregate then undrawn
and unexpired amount of such Letters of Credit.&nbsp; Amounts held
in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such
Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay other obligations of the Borrower
hereunder and under the other Loan Documents.&nbsp; After all such
Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other
obligations of the Borrower hereunder and under the other Loan
Documents shall have been paid in full, the balance, if any, in
such cash collateral account shall be returned to the Borrower (or
such other Person as may be lawfully entitled thereto).&nbsp;
Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby
expressly waived by the Borrower.</p>

<p align="center"><a name="_Ref64130531"></a><a name=
"_Toc98641142"></a><a name="_Toc100971187">SECTION 9&nbsp;&nbsp;THE
AGENTS</a></p>

<p><a name="_Toc98641143"></a><a name=
"_Toc100971188">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1&nbsp;&nbsp;<u>
Appointment</u></a>.&nbsp;&nbsp;Each Lender hereby irrevocably
designates and appoints the Administrative Agent as the agent of
such Lender under this Agreement and the other Loan Documents, and
each such Lender irrevocably authorizes the Administrative Agent,
in such capacity, to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other
powers as are reasonably incidental thereto.&nbsp; Notwithstanding
any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist
against the Administrative Agent.</p>

<p><a name="_Ref66097446"></a><a name="_Toc98641144"></a><a name=
"_Toc100971189">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2&nbsp;&nbsp;<u>
Delegation of Duties</u></a>.&nbsp;&nbsp;The Administrative Agent
may execute any of its duties under this Agreement and the other
Loan Documents by or through agents or
attorneys&#8209;in&#8209;fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties.&nbsp; The
Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in&#8209;fact selected by it
with reasonable care.</p>

<p><a name="_Toc98641145"></a><a name=
"_Toc100971190">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3&nbsp;&nbsp;<u>
Exculpatory Provisions</u></a>.&nbsp;&nbsp;Neither any Agent nor
any of their respective officers, directors, employees, agents,
attorneys&#8209;in&#8209;fact or affiliates shall be
(i)&nbsp;liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this
Agreement or any other Loan Document (except to the extent that any
of the foregoing are found by a final and nonappealable decision of
a court of competent jurisdiction to have resulted from its or such
Person&rsquo;s own gross negligence or willful misconduct) or
(ii)&nbsp;responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the
Borrower or any officer thereof contained in this Agreement or any
other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the
Agents under or in connection with, this Agreement or any other
Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any
other Loan Document or for any failure of the Borrower to perform
its obligations hereunder or thereunder.&nbsp; The Agents shall not
be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or
to inspect the properties, books or records of the Borrower.</p>

<p><a name="_Toc98641146"></a><a name=
"_Toc100971191">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4&nbsp;&nbsp;<u>
Reliance by Administrative Agent</u></a>.&nbsp;&nbsp;The
Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any instrument, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including counsel to the
Borrower), independent accountants and other experts selected by
the Administrative Agent.&nbsp; The Administrative Agent may deem
and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative
Agent.&nbsp; The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders (or, if so specified by this
Agreement, all Lenders) as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and
all liability and expense that may be incurred by it by reason of
taking or continuing to take any such action.&nbsp; The
Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required
Lenders (or, if so specified by this Agreement, all Lenders), and
such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future
holders of the Loans.</p>

<p><a name="_Toc98641147"></a><a name=
"_Toc100971192">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5&nbsp;&nbsp;<u>
Notice of Default</u></a>.&nbsp;&nbsp;The Administrative Agent
shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default unless the Administrative Agent
has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating
that such notice is a &ldquo;notice of default&rdquo;.&nbsp; In the
event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the
Lenders.&nbsp; The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); <u>provided</u> that unless and until the
Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.</p>

<p><a name="_Toc98641148"></a><a name=
"_Toc100971193">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6&nbsp;&nbsp;<u>
Non-Reliance on Agents and Other Lenders</u></a>.&nbsp;&nbsp;Each
Lender expressly acknowledges that neither the Agents nor any of
their respective officers, directors, employees, agents,
attorneys&#8209;in&#8209;fact or affiliates have made any
representations or warranties to it and that no act by any Agent
hereafter taken, including any review of the affairs of the
Borrower or any of its affiliates, shall be deemed to constitute
any representation or warranty by any Agent to any Lender.&nbsp;
Each Lender represents to the Agents that it has, independently and
without reliance upon any Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business,
operations, property, financial and other condition and
creditworthiness of the Borrower and its affiliates and made its
own decision to make its Loans hereunder and enter into this
Agreement.&nbsp; Each Lender also represents that it will,
independently and without reliance upon any Agent or any other
Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and its affiliates.&nbsp; Except
for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning
the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower or any of
its affiliates that may come into the possession of the
Administrative Agent or any of its officers, directors, employees,
agents, attorneys&#8209;in&#8209;fact or affiliates.</p>

<p><a name="_Toc98641149"></a><a name=
"_Toc100971194">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.7&nbsp;&nbsp;<u>
Indemnification</u></a>.&nbsp;&nbsp;The Lenders agree to indemnify
each Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to
do so), ratably according to their respective Percentages in effect
on the date on which indemnification is sought under this Section
(or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been
paid in full, ratably in accordance with such Percentages
immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (whether before or after the
payment of the Loans) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or
omitted by such Agent under or in connection with any of the
foregoing; <u>provided</u> that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from such
Agent&rsquo;s gross negligence or willful misconduct.&nbsp; The
agreements in this Section shall survive for two years after
repayment of the Loans and all other amounts payable hereunder.</p>

<p><a name="_Toc98641150"></a><a name=
"_Toc100971195">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.8&nbsp;&nbsp;<u>
Agent in Its Individual Capacity</u></a>.&nbsp;&nbsp;Each Agent and
its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower as
though such Agent were not an Agent.&nbsp; With respect to its
Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the
same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were
not an Agent, and the terms &ldquo;Lender&rdquo; and
&ldquo;Lenders&rdquo; shall include each Agent in its individual
capacity.</p>

<p><a name="_Toc98641151"></a><a name=
"_Toc100971196">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.9&nbsp;&nbsp;<u>
Successor Administrative Agent</u></a>.&nbsp;&nbsp;The
Administrative Agent may resign as Administrative Agent upon
10&nbsp;days&rsquo; notice to the Lenders and the Borrower.&nbsp;
If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Loan Documents, then the
Required Lenders shall appoint from among the Lenders a successor
agent for the Lenders, which successor agent shall (unless an Event
of Default under Section&nbsp;8(f) with respect to the Borrower
shall have occurred and be continuing) be subject to approval by
the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
&ldquo;<u>Administrative Agent</u>&rdquo; shall mean such successor
agent effective upon such appointment and approval, and the former
Administrative Agent&rsquo;s rights, powers and duties as
Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent
or any of the parties to this Agreement or any holders of the
Loans.&nbsp; If no successor agent has accepted appointment as
Administrative Agent by the date that is 10&nbsp;days following a
retiring Administrative Agent&rsquo;s notice of resignation, the
retiring Administrative Agent&rsquo;s resignation shall
nevertheless thereupon become effective, and the Lenders shall
assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint
a successor agent as provided for above.&nbsp; After any retiring
Administrative Agent&rsquo;s resignation as Administrative Agent,
the provisions of this Section&nbsp;9 shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan
Documents.</p>

<p><a name="_Toc98641152"></a><a name=
"_Toc100971197">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.10&nbsp;&nbsp;<u>
Documentation Agents and Syndication Agent</u></a>.&nbsp;&nbsp;None
of the Documentation Agents or the Syndication Agent shall have any
duties or responsibilities hereunder in its capacity as such.</p>

<p align="center"><a name="_Toc98641153"></a><a name=
"_Toc100971198">SECTION 10.&nbsp;&nbsp;MISCELLANEOUS</a><br />
</p>

<p><a name="_Ref64130575"></a><a name="_Toc98641154"></a><a name=
"_Toc100971199">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1&nbsp;&nbsp;<u>
Amendments and Waivers</u></a>.&nbsp;&nbsp;Neither this Agreement,
any other Loan Document, nor any terms hereof or thereof may be
amended, supplemented or modified except in accordance with the
provisions of this Section&nbsp;10.1.&nbsp; The Required Lenders
and the Borrower may, or, with the written consent of the Required
Lenders, the Administrative Agent and the Borrower may, from time
to time, (a)&nbsp;enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the
purpose of adding any provisions to this Agreement or the other
Loan Documents or changing in any manner the rights of the Lenders
or of the Borrower hereunder or thereunder or (b)&nbsp;waive, on
such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other
Loan Documents or any Default or Event of Default and its
consequences; <u>provided</u>, <u>however</u>, that no such waiver
and no such amendment, supplement or modification shall:</p>

<p><a name=
"_Ref64219116">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;forgive the principal amount or extend the final
scheduled date of maturity of any Loan, reduce the stated rate of
any interest or fee payable hereunder (except in connection with
the waiver of applicability of any post-default increase in
interest rates (which waiver shall be effective with the consent of
the Required Lenders)) or extend the scheduled date of any payment
thereof, or increase the amount or extend the expiration date of
any Lender&rsquo;s Commitment, in each case without the written
consent of each Lender directly affected thereby (except that only
the Lenders who are increasing their Commitments are required to
consent to a request by the Borrower under Section 2.3 to increase
the Total Commitments);</a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;&nbsp;eliminate or reduce the voting rights of any Lender
under this Section&nbsp;10.1 or Section&nbsp;10.6(a)(i) without the
written consent of such Lender;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iii)&nbsp;&nbsp;reduce any percentage specified in the definition
of Required Lenders, consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement
and the other Loan Documents, in each case without the written
consent of all Lenders;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iv)&nbsp;&nbsp;amend, modify or waive any provision of
Section&nbsp;2.14 related to <u>pro</u> <u>rata</u> treatment
without the consent of each Lender directly affected thereby;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(v)&nbsp;&nbsp;amend, modify or waive any provision of
Section&nbsp;9 without the written consent of the Administrative
Agent;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(vi)&nbsp;&nbsp;amend, modify or waive any provision of
Section&nbsp;2.4 or 2.5 without the written consent of the
Swingline Lender;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(vii)&nbsp;&nbsp;(A)&nbsp;release the Senior Bond prior to the
Release Date, (B)&nbsp;amend the definition of &ldquo;Release
Date&rdquo; to cause an earlier release of the Mortgaged Property
than such definition in effect on the Effective Date or
(C)&nbsp;amend, modify or waive any provision of Section&nbsp;5.1
or 7.4, in each case, without the consent of all the Lenders;
or</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(viii)&nbsp;&nbsp;amend, modify or waive any provision of
Section&nbsp;3 or any other provision affecting the Issuing Lenders
without the written consent of each Issuing Lender affected
thereby.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the Lenders, the Administrative Agent and all
future holders of the Loans.&nbsp; In the case of any waiver, the
Borrower, the Lenders and the Administrative Agent shall be
restored to their former position and rights hereunder and under
the other Loan Documents, and any Default or Event of Default
waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Required Lenders shall have approved any amendment which
requires the consent of all of the Lenders, the Borrower shall be
permitted to replace any non-consenting Lender with another
financial institution, <u>provided</u> that, (i)&nbsp;the
replacement financial institution shall purchase at par, all Loans
and other amounts owing to such replaced Lender on or prior to the
date of replacement, (ii)&nbsp;the Borrower shall be liable to such
replaced Lender under Section&nbsp;2.17 if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the
last day of the Interest Period relating thereto (as if such
purchase constituted a prepayment of such Loans), (iii)&nbsp;such
replacement financial institution, if not already a Lender, shall
be reasonably satisfactory to the Administrative Agent and, with
respect to any replacement financial institution that is not an
Eligible Assignee, each Issuing Lender, (iv)&nbsp;the replaced
Lender shall be obligated to make such replacement in accordance
with the provisions of Section&nbsp;10.6 (<u>provided</u> that the
Borrower shall be obligated to pay the registration and processing
fee referred to therein) and (v)&nbsp;any such replacement shall
not be deemed to be a waiver of any rights the Borrower, the
Administrative Agent or any other Lender shall have against the
replaced Lender.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
anything to the contrary herein but subject to obtaining all
necessary regulatory approvals, in addition to the amendments
described above, each of the Procurement Facility Limit and the
Non-Procurement Facility Limit may be changed by the Borrower by
written notice to the Administrative Agent and the Issuing Lenders
and no consent of any other party shall be required;
<u>provided</u> that, (a)&nbsp;the aggregate amount of L/C
Obligations may not exceed the L/C Commitment, (b)&nbsp;the sum of
the Procurement Facility Limit and the Non-Procurement Facility
Limit may not exceed the Total Commitments and (c)&nbsp;neither the
Procurement Facility Limit nor the Non-Procurement Facility Limit
may exceed the Total Commitments; <u>provided</u> that any notice
delivered pursuant to Section&nbsp;2.1 or Section 2.4 which would,
after giving effect to the Loans requested to be made, cause the
aggregate outstanding principal amount of the Loans plus the
aggregate outstanding amount of L/C Obligations in respect of
Non-Procurement Letters of Credit to exceed the Non-Procurement
Facility Limit shall be deemed to be a notice by the Borrower
hereunder.</p>

<p><a name="_Toc98641155"></a><a name=
"_Toc100971200">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2&nbsp;&nbsp;<u>
Notices</u></a>.&nbsp;&nbsp;All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made
when delivered, or three Business Days after being deposited in the
mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative
questionnaire delivered to the Administrative Agent in the case of
the Lenders, or to such other address as may be hereafter notified
by the respective parties hereto:</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p>Borrower:</p>
</td>
<td valign="top">
<p>Pacific Gas and Electric Company<br />
 c/o PG&amp;E Corporation<br />
 One Market Street<br />
 Spear Tower, Suite 2400<br />
 San Francisco, California 94105</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>Attention:&nbsp; Assistant Treasurer</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>Telecopy:&nbsp;&nbsp;&nbsp; (415) 267-7265/7268</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>Telephone:&nbsp; (415) 817-8199/(415) 267-7000</p>
</td>
</tr>

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

<tr>
<td valign="top">
<p>with a copy to:</p>
</td>
<td valign="top">
<p>Pacific Gas and Electric Company<br />
 c/o PG&amp;E Corporation<br />
 One Market<br />
 Spear Tower, Suite 2400<br />
 San Francisco, California&nbsp; 94105</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>Attention:&nbsp;&nbsp; Chief Counsel, Corporate</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>Telecopy:&nbsp;&nbsp; (415) 817-8225</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>Telephone: (415) 817-8200</p>
</td>
</tr>

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

<tr>
<td valign="top">
<p>Administrative Agent:</p>
</td>
<td valign="top">
<p>Citicorp North America, Inc.<br />
 Two Penns Way<br />
 Suite 200<br />
 New Castle, Delaware 19720</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>Attention:&nbsp; Heather Puchalski<br>
Telecopy:&nbsp;&nbsp; &nbsp; &nbsp; (212) 994-0961<br>
Telephone:&nbsp; &nbsp; (302) 894-6021</p>

</td>
</tr>

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

<tr>
<td valign="top">
<p>Issuing Lenders:</p>
</td>
<td valign="top">
<p>As notified by each Issuing Lender to the Administrative Agent
and the Borrower.</p>
</td>
</tr>
</table>

<p><u></u></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>
provided</u> that any notice, request or demand to or upon the
Administrative Agent, the Issuing Lenders or any Lender shall not
be effective until received.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notices
and other communications to the Administrative Agent, the Issuing
Lenders or the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the
Administrative Agent; <u>provided</u> that the foregoing shall not
apply to notices pursuant to Section&nbsp;2 unless otherwise agreed
by the Administrative Agent, the applicable Issuing Lender and each
Lender.&nbsp; The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures
approved by it; <u>provided</u> that approval of such procedures
may be limited to particular notices or communications.</p>

<p><a name="_Toc98641156"></a><a name=
"_Toc100971201">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3&nbsp;&nbsp;<u>
No Waiver; Cumulative Remedies</u></a>.&nbsp;&nbsp;No failure to
exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate
as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right,
remedy, power or privilege.&nbsp; The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.</p>

<p><a name="_Toc98641157"></a><a name=
"_Toc100971202">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4&nbsp;&nbsp;<u>
Survival of Representations and Warranties</u></a>.&nbsp;&nbsp;All
representations and warranties made hereunder, in the other Loan
Documents and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.</p>

<p><a name="_Ref64116760"></a><a name="_Toc98641158"></a><a name=
"_Toc100971203">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.5&nbsp;&nbsp;<u>
Payment of Expenses and Taxes</u></a>.&nbsp;&nbsp;The Borrower
agrees (a)&nbsp;to pay or reimburse the Administrative Agent, each
Issuing Lender and the Lenders for all their respective reasonable
out&#8209;of&#8209;pocket costs and expenses incurred in connection
with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the
other Loan Documents and any other documents prepared in connection
herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including the reasonable fees and
disbursements of only one counsel and special California regulatory
counsel to the Administrative Agent and filing and recording fees
and expenses, with statements with respect to the foregoing to be
submitted to the Borrower prior to the Effective Date (in the case
of amounts to be paid on the Effective Date) and from time to time
thereafter on a quarterly basis or such other periodic basis as the
Administrative Agent shall deem appropriate, (b)&nbsp;to pay or
reimburse each Lender, each Issuing Lender and the Administrative
Agent for all its costs and expenses incurred in connection with
the enforcement or preservation of any rights under this Agreement,
the other Loan Documents and any such other documents, including
the fees and disbursements of only one counsel to the
Administrative Agent, the Lenders and the Issuing Lenders,
(c)&nbsp;to pay, indemnify, and hold each Lender, each Issuing
Lender and the Administrative Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect
to, or resulting from any delay in paying, stamp, excise and Other
Taxes, if any, that may be payable or determined to be payable in
connection with the execution and delivery of, or consummation of
any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in
respect of, this Agreement, the other Loan Documents and any such
other documents, and (d)&nbsp;to pay, indemnify, and hold each
Lender, each Issuing Lender and the Administrative Agent and their
respective officers, directors, employees, affiliates, agents and
controlling persons (each, an &ldquo;<u>Indemnitee</u>&rdquo;)
harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever
with respect to the execution, delivery, enforcement and
performance of this Agreement, the other Loan Documents and any
such other documents, including any of the foregoing relating to
the use of proceeds of the Loans or the violation of, noncompliance
with or liability under, any Environmental Law applicable to the
operations of the Borrower and its Significant Subsidiaries or any
of the Properties and the reasonable fees and expenses of one legal
counsel in connection with claims, actions or proceedings by any
Indemnitee against the Borrower under any Loan Document (all the
foregoing in this clause&nbsp;(d), collectively, the
&ldquo;<u>Indemnified Liabilities</u>&rdquo;), <u>provided</u>,
that the Borrower shall have no obligation hereunder to any
Indemnitee with respect to Indemnified Liabilities to the extent
such Indemnified Liabilities resulted from the gross negligence or
willful misconduct of such Indemnitee.&nbsp; Without limiting the
foregoing, and to the extent permitted by applicable law, the
Borrower agrees not to assert and to cause its Significant
Subsidiaries not to assert, and hereby waives and agrees to cause
its Significant Subsidiaries to waive, all rights for contribution
or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs
and expenses of whatever kind or nature, under or related to
Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee.&nbsp; All amounts due under this
Section&nbsp;10.5 shall be payable not later than 30&nbsp;days
after written demand therefor, subject to the Borrower&rsquo;s
receipt of reasonably detailed invoices.&nbsp; Statements payable
by the Borrower pursuant to this Section&nbsp;10.5 shall be
submitted to Assistant Treasurer (Telephone No.&nbsp;(415)
817-8199/(415) 267-7000) (Telecopy No.&nbsp;(415) 267-7265/7268),
at the address of the Borrower set forth in Section&nbsp;10.2 with
a copy to Chief Counsel, Corporate (Telephone No. (415) 817-8200)
(Telecopy No. (415) 817-8225), at the address of the Borrower set
forth in Section&nbsp;10.2, or to such other Person or address as
may be hereafter designated by the Borrower in a written notice to
the Administrative Agent.&nbsp; The agreements in this
Section&nbsp;10.5 shall survive for two years after repayment of
the Loans and all other amounts payable hereunder.</p>

<p><a name="_Ref64115588"></a><a name="_Ref64115925"></a><a name=
"_Ref64118123"></a><a name="_Ref64127912"></a><a name=
"_Toc98641159"></a><a name=
"_Toc100971204">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6&nbsp;&nbsp;<u>
Successors and Assigns; Participations and
Assignments</u></a>.&nbsp;&nbsp;(a)&nbsp;&nbsp;The provisions of
this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns
permitted hereby (including any affiliate of the Issuing Lender
that issues any Letter of Credit), except that (i)&nbsp;the
Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii)&nbsp;no
Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section 10.6.</p>

<p><a name=
"_Ref64116019">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;(i)&nbsp;&nbsp;Subject to the conditions set forth
in paragraph&nbsp;(b)(ii) below, any Lender may assign to one or
more assignees (each, an &ldquo;<u>Assignee</u>&rdquo;) all or a
portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans at the
time owing to it) with the prior written consent (such consent not
to be unreasonably withheld) of:</a></p>

<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;(A)&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;the
Borrower, <u>provided</u> that no consent of the Borrower shall be
required for an assignment to a Lender, an Eligible Assignee that
is an affiliate of any Lender party to this Agreement on the
Effective Date or, if an Event of Default has occurred and is
continuing, any other Person;<br />
</p>

<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;(B)&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;the
Administrative Agent, <u>provided</u> that no consent of the
Administrative Agent shall be required for an assignment of any
Commitment to an assignee that is a Lender (or an affiliate of a
Lender) with a Commitment immediately prior to giving effect to
such assignment; and</p>

<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;(C)&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;each
Issuing Lender, <u>provided</u> that no consent of any Issuing
Lender shall be required for any assignment to an Eligible
Assignee.<br />
</p>

<p><a name=
"_Ref64130879">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;&nbsp;Assignments shall be subject to the following
additional conditions:</a><br />
</p>

<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;(A)&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;except
in the case of an assignment to a Lender, an Eligible Assignee that
is an affiliate of any Lender party to this Agreement on the
Effective Date or an assignment of the entire remaining amount of
the assigning Lender&rsquo;s Commitments or Loans, the amount of
the Commitments or Loans of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $10,000,000 unless
each of the Borrower and the Administrative Agent otherwise
consent, <u>provided</u> that (1)&nbsp;no such consent of the
Borrower shall be required if an Event of Default has occurred and
is continuing and (2)&nbsp;with respect to any Lender party to this
Agreement on the Effective Date, such amounts shall be aggregated
in respect of such Lender and any affiliate of such Lender that is
an Eligible Assignee;<br />
</p>

<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;(B)&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;the
parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500; and<br />
</p>

<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;(C)&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;the
Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an administrative questionnaire.<br />
</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iii)&nbsp;&nbsp;Subject to acceptance and recording thereof
pursuant to paragraph&nbsp;(b)(iv) below, from and after the
effective date specified in each Assignment and Assumption the
Assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment
and Assumption covering all of the assigning Lender&rsquo;s rights
and obligations under this Agreement, such Lender shall cease to be
a party hereto but shall continue to be entitled to the benefits of
Sections&nbsp;2.15, 2.16, 2.17 and 10.5 but shall be subject to the
limitations set forth therein).&nbsp; Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does
not comply with this Section&nbsp;10.6 shall be treated for
purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with
paragraph&nbsp;(c) of this Section.</p>

<p><a name=
"_Ref64131731">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iv)&nbsp;&nbsp;The Administrative Agent, acting for this purpose
as an agent of the Borrower, shall maintain at one of its offices a
copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal amount of the Loans
and L/C Obligations owing to, each Lender pursuant to the terms
hereof from time to time (the &ldquo;<u>Register</u>&rdquo;).&nbsp;
The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative Agent, the
Issuing Lenders and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary.&nbsp; The Register shall be available for
inspection by the Borrower, each Issuing Lender and any Lender, at
any reasonable time and from time to time upon reasonable prior
notice.</a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(v)&nbsp;&nbsp;Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an Assignee, the
Assignee&rsquo;s completed administrative questionnaire (unless the
Assignee shall already be a Lender hereunder), the processing and
recordation fee referred to in paragraph&nbsp;(b) of this Section
and any written consent to such assignment required by
paragraph&nbsp;(b) of this Section, the Administrative Agent shall
accept such Assignment and Assumption and record the information
contained therein in the Register.&nbsp; No assignment shall be
effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.</p>

<p><a name=
"_Ref64118134">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;(i)&nbsp;&nbsp;Any Lender may, without the consent
of the Borrower or the Administrative Agent, sell participations to
one or more banks or other entities (a
&ldquo;<u>Participant</u>&rdquo;) in all or a portion of such
Lender&rsquo;s rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans owing
to it); <u>provided</u> that (A)&nbsp;such Lender&rsquo;s
obligations under this Agreement shall remain unchanged,
(B)&nbsp;such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and
(C)&nbsp;the Borrower, the Administrative Agent, the Issuing Lender
and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender&rsquo;s rights and
obligations under this Agreement.&nbsp; Any agreement pursuant to
which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of
this Agreement; <u>provided</u> that such agreement may provide
that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver that
(1)&nbsp;requires the consent of each Lender directly affected
thereby pursuant to the proviso to the second sentence of
Section&nbsp;10.1 and (2)&nbsp;directly affects such
Participant.&nbsp; Subject to paragraph&nbsp;(c)(ii) of this
Section, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections&nbsp;2.15, 2.16 and 2.17 to
the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph&nbsp;(b) of this
Section.</a></p>

<p><a name=
"_Ref64131798">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;&nbsp;Notwithstanding anything to the contrary herein, a
Participant shall not be entitled to receive any greater payment
under Section&nbsp;2.15 or 2.16 than the applicable Lender would
have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower&rsquo;s prior written
consent to such greater payments.&nbsp; Any Participant that is a
Non-U.S. Lender shall not be entitled to the benefits of
Section&nbsp;2.16 unless such Participant complies with
Section&nbsp;2.16(d).</a></p>

<p><a name=
"_Ref64219644">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve
Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; <u>provided</u> that no such
pledge or assignment of a security interest shall release a Lender
from any of its obligations hereunder or substitute any such
pledgee or Assignee for such Lender as a party hereto.</a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;The Borrower, upon receipt of written notice from
the relevant Lender, agrees to issue Notes to any Lender requiring
Notes to facilitate transactions of the type described in
paragraph&nbsp;(d) above.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(f)&nbsp;&nbsp;Notwithstanding the foregoing, any Conduit Lender
may assign any or all of the Loans it may have funded hereunder to
its designating Lender without the consent of the Borrower or the
Administrative Agent and without regard to the limitations set
forth in Section&nbsp;10.6(b).&nbsp; Each of the Borrower, each
Lender and the Administrative Agent hereby confirms that it will
not institute against a Conduit Lender or join any other Person in
instituting against a Conduit Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding
under any state bankruptcy or similar law, for one year and one day
after the payment in full of the latest maturing commercial paper
note issued by such Conduit Lender; <u>provided</u>, however, that
each Lender designating any Conduit Lender hereby agrees to
indemnify, save and hold harmless each other party hereto for any
loss, cost, damage, expense, obligations, penalties, actions,
judgments, suits or any kind whatsoever arising out of its
inability to institute such a proceeding against such Conduit
Lender during such period of forbearance.</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(g)&nbsp;&nbsp;Notwithstanding anything to the contrary in this
Section, none of the Agents, in their capacity as Lenders, will
assign without the consent of the Borrower, prior to the Effective
Date, any of the Commitments held by them on the date of this
Agreement.</p>

<p><a name="_Toc98641160"></a><a name=
"_Toc100971205">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.7&nbsp;&nbsp;<u>
Adjustments; Set&#8209;off</u></a>.&nbsp; (a)&nbsp;&nbsp;Except to
the extent that this Agreement expressly provides for payments to
be allocated to a particular Lender, if any Lender (a
&ldquo;<u>Benefitted Lender</u>&rdquo;) shall receive any payment
of all or part of the Obligations owing to it hereunder, or receive
any collateral in respect thereof (whether voluntarily or
involuntarily, by set&#8209;off, pursuant to events or proceedings
of the nature referred to in Section&nbsp;8(f), or otherwise), in a
greater proportion than any such payment to or collateral received
by any other Lender, if any, in respect of the Obligations owing to
such other Lender hereunder, such Benefitted Lender shall purchase
for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender
hereunder, or shall provide such other Lenders with the benefits of
any such collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such collateral
ratably with each of the Lenders; <u>provided</u>, <u>however</u>,
that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.</p>

<p><a name=
"_Ref64131818">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;In addition to any rights and remedies of the
Lenders provided by law, including other rights of set-off, each
Lender shall have the right, without prior notice to the Borrower,
any such notice being expressly waived by the Borrower to the
extent permitted by applicable law, upon any amount becoming due
and payable by the Borrower hereunder (whether at the stated
maturity, by acceleration or otherwise), after any applicable grace
period, to set off and appropriate and apply against such amount
any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured,
at any time held or owing by such Lender or any branch, affiliate
or agency thereof to or for the credit or the account of the
Borrower.&nbsp; Each Lender agrees promptly to notify the Borrower
and the Administrative Agent after any such setoff and application
made by such Lender, <u>provided</u> that the failure to give such
notice shall not affect the validity of such setoff and
application.</a></p>

<p><a name="_Toc98641161"></a><a name=
"_Toc100971206">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.8&nbsp;&nbsp;<u>
Counterparts</u></a>.&nbsp;&nbsp;This Agreement may be executed by
one or more of the parties to this Agreement on any number of
separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.&nbsp;
Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof.&nbsp; A set of the copies of this
Agreement signed by all the parties shall be lodged with the
Borrower and the Administrative Agent.</p>

<p><a name="_Toc98641162"></a><a name=
"_Toc100971207">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.9&nbsp;&nbsp;<u>
Severability</u></a>.&nbsp;&nbsp;Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.</p>

<p><a name="_Toc98641163"></a><a name=
"_Toc100971208">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.10&nbsp;&nbsp;<u>
Integration</u></a>.&nbsp;&nbsp;This Agreement and the other Loan
Documents represent the entire agreement of the Borrower, the
Administrative Agent and the Lenders with respect to the subject
matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent or any
Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents.</p>

<p><a name="_Toc98641164"></a><a name=
"_Toc100971209">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.11&nbsp;&nbsp;<b>
<u>Governing Law</u></b></a><b>.&nbsp;&nbsp;THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.</b></p>

<p><a name="_Toc98641165"></a><a name=
"_Toc100971210">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.12&nbsp;&nbsp;<u>
Submission To Jurisdiction; Waivers</u></a>.&nbsp;&nbsp;The
Borrower hereby irrevocably and unconditionally:</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the
non&#8209;exclusive general jurisdiction of the courts of the State
of New York, the courts of the United States for the Southern
District of New&nbsp;York, and appellate courts from any
thereof;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered
or certified mail (or any substantially similar form of mail),
postage prepaid, to the Borrower at its address set forth in
Section&nbsp;10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e)&nbsp;&nbsp;waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or
proceeding relating to this Agreement or any other Loan Document
any special, exemplary, punitive or consequential damages.</p>

<p><a name="_Toc98641166"></a><a name=
"_Toc100971211">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.13&nbsp;&nbsp;<u>
Acknowledgments</u></a>.&nbsp;&nbsp;The Borrower hereby
acknowledges that:</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan
Documents;</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;neither the Administrative Agent nor any Lender has
any fiduciary relationship with or duty to the Borrower arising out
of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between Administrative Agent and
Lenders, on one hand, and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and
creditor; and</p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.</p>

<p><a name="_Ref65082957"></a><a name="_Toc98641167"></a><a name=
"_Toc100971212">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.14&nbsp;&nbsp;<u>
Confidentiality</u></a>.&nbsp;&nbsp;Each of the Administrative
Agent and each Lender agrees to keep confidential in accordance
with such party&rsquo;s customary practices (and in any event in
compliance with applicable law regarding material non-public
information) all non-public information provided to it by the
Borrower, the Administrative Agent or any Lender pursuant to or in
connection with this Agreement that is designated by the provider
thereof as confidential; <u>provided</u> that nothing herein shall
prevent the Administrative Agent or any Lender from disclosing any
such information (a)&nbsp;to the Administrative Agent, any other
Lender or any affiliate thereof, (b)&nbsp;subject to an agreement
to comply with the provisions of this Section or substantially
equivalent provisions, to any actual or prospective Transferee or
any direct or indirect counterparty to any Swap Agreement (or any
professional advisor to such counterparty), (c)&nbsp;to its
employees, directors, agents, attorneys, accountants and other
professional advisors or those of any of its affiliates (as long as
such attorneys, accountants and other professional advisors are
subject to confidentiality requirements substantially equivalent to
this Section), (d)&nbsp;upon the request or demand of any
Governmental Authority, (e)&nbsp;in response to any order of any
court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (f)&nbsp;if requested
or required to do so in connection with any litigation or similar
proceeding, (g)&nbsp;that has been publicly disclosed, (h)&nbsp;to
the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that
requires access to information about a Lender&rsquo;s investment
portfolio in connection with ratings issued with respect to such
Lender, or (i)&nbsp;in connection with the exercise of any remedy
hereunder or under any other Loan Document, <u>provided</u> that,
in the case of clauses (d),&nbsp;(e) and (f) of this
Section&nbsp;10.14, with the exception of disclosure to bank
regulatory authorities, the Borrower (to the extent legally
permissible) shall be given prompt prior notice so that it may seek
a protective order or other appropriate remedy.</p>

<p><a name="_Toc98641168"></a><a name=
"_Toc100971213">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.15&nbsp;&nbsp;<b>
<u>WAIVERS OF JURY TRIAL</u></b></a><b>.&nbsp;&nbsp;THE BORROWER,
THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.</b></p>

<p><a name="_Ref64220027"></a><a name="_Toc98641169"></a><a name=
"_Toc100971214">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.16&nbsp;&nbsp;<u>
Releases of</u></a> <a name="_DV_M572"></a><u>Senior Bond</u><a
name="_DV_M573"></a><a name="_DV_M574"></a>.&nbsp; (a)&nbsp;
Notwithstanding anything to the contrary herein or in any other
Loan Document, upon the occurrence of the Release Date, the
Administrative Agent is hereby irrevocably authorized by each
Lender (without requirement of notice to or consent of any Lender)
to promptly surrender to or upon the order of the Borrower the
Senior Bond then held by the Administrative Agent, in accordance
with the terms of the Bond Delivery Agreement.<a name=
"_DV_M575"></a></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;The Administrative Agent shall promptly surrender to
or upon the order of the Borrower the Senior Bond then held by the
Administrative Agent at such time as (i)&nbsp;the Loans, the
Reimbursement Obligations and any interest or fees payable to the
Lenders or the Administrative Agent hereunder shall have been paid
in full, (ii)&nbsp;all other amounts then due and payable by the
Borrower to the parties hereto under the Loan Documents shall have
been paid in full, and (iii)&nbsp;the Commitments have been
terminated and the Letters of Credit have terminated or
expired.</p>

<p><a name="_Toc98641170"></a><a name=
"_Toc100971215">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.17&nbsp;&nbsp;<u>
USA Patriot Act</u></a><u>.</u>&nbsp;&nbsp;Each Lender hereby
notifies the Borrower that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October
26, 2001)) (the &ldquo;<u>Act</u>&rdquo;), it is required to
obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and
other information that will a</p>

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

<p>llow such Lender to identify the Borrower in accordance with the
Act.</p>

<p></p>
</div>

<br clear="all" />


<div>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>PACIFIC GAS AND ELECTRIC COMPANY</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Kent M. Harvey________________</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;Kent
M. Harvey</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:&nbsp;&nbsp;&nbsp;&nbsp;Senior
Vice President &ndash; Chief&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial
Officer and Treasurer</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>CITICORP NORTH AMERICA, INC., as<br>
Administrative Agent and as a
Lender</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Carolyn A. Kee__________________</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;&nbsp;Carolyn
A. Kee</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vice
President</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>JPMORGAN CHASE BANK, N.A., as Issuing<br>
Lender and as a Lender</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Thomas Casey__________________</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;Thomas
Casey</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vice
President</p>
</td>
</tr>
</table>

<br clear="all" />


<table border="0" cellspacing="0" cellpadding="0" width="503">
<tr>
<td valign="top" width="236">
<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;</p>
</td>
<td valign="top" width="263">
<p>BARCLAYS BANK PLC</p>
</td>
</tr>

<tr>
<td valign="top" width="236"></td>
<td valign="top" width="263">
<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;</p>
</td>
</tr>

<tr>
<td valign="top" width="236"></td>
<td valign="top" width="263">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="236"></td>
<td valign="top" width="263">
<p>By:&nbsp; <u>/s/&nbsp; Sydney G.
Dennis&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top" width="236"></td>
<td valign="top" width="263">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;&nbsp;Sydney
G. Dennis</p>
</td>
</tr>

<tr>
<td valign="top" width="236"></td>
<td valign="top" width="263">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director</p>
</td>
</tr>

</table>

<br clear="all" />


<table border="0" cellspacing="0" cellpadding="0" width="504">
<tr>
<td valign="top" width="260">
<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;</p>
</td>
<td valign="top" width="240">
<p>BNP PARIBAS</p>
</td>
</tr>

<tr>
<td valign="top" width="260">
</td>
<td valign="top" width="240">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="260">
</td>
<td valign="top" width="240">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="240">
<p>By:&nbsp; <u>/s/&nbsp; Mark A.
Renaud&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="240">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;Mark
A. Renaud</p>
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="240">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:&nbsp;&nbsp;&nbsp;&nbsp;Managing
Director</p>
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="240">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="240">
<p>By:&nbsp; <u>/s/&nbsp; Francis J.
DeLaney&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="240">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;Francis
J. DeLaney</p>
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="240">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:&nbsp;&nbsp;&nbsp;&nbsp;Managing
Director</p>
</td>
</tr>
</table>

&nbsp;
<p>&nbsp;</p>


<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>DEUTSCHE BANK AG NEW YORK BRANCH</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Richard Henshall
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Richard Henshall</p>
</td>
</tr>

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

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; David J. Bell&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; David J.
Bell</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; Managing Director</p>
</td>
</tr>
</table>

<br clear="all" />


<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>ABN AMRO BANK N.V.</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; John D. Reed&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; John D.
Reed</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Todd D.
Vaubel&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp;
Todd D. Vaubel</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Assistant Vice President</p>
</td>
</tr>
</table>

<br clear="all" />


<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>LEHMAN BROTHERS BANK, FSB</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Gary T. Taylor </u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Gary T.
Taylor</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; Senior Vice President</p>
</td>
</tr>

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

<br clear="all" />


<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>MELLON BANK, N.A.</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Richard A. Matthews&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Richard
A. Matthews</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; First Vice President</p>
</td>
</tr>

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

<br clear="all" />


<table border="0" cellspacing="0" cellpadding="0" width="501">
<tr>
<td valign="top" width="260">
<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;</p>
</td>
<td valign="top" width="237">
<p>ROYAL BANK OF CANADA</p>
</td>
</tr>

<tr>
<td valign="top" width="260">
</td>
<td valign="top" width="237">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="260">
</td>
<td valign="top" width="237">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="237">
<p>By:&nbsp;&nbsp;&nbsp; <u>/s/&nbsp; John D. Reed</u></p>
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="237">
<p>&nbsp; By:&nbsp; <u>/s/&nbsp; Linda M.
Stephens&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="237">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Name:&nbsp;&nbsp; Linda M. Stephens</p>
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="237">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; Authorized Signatory</p>
</td>
</tr>
</table>

<br clear="all" />


<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>THE BANK OF NEW YORK</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Jesus Williams&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Jesus
Williams</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Vice President</p>
</td>
</tr>
</table>

<br clear="all" />


<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>THE BANK OF NOVA SCOTIA</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Thane Rattew&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Thane
Rattew</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; Managing Director</p>
</td>
</tr>
</table>

<br clear="all" />


<table border="0" cellspacing="0" cellpadding="0" width="570">
<tr>
<td valign="top" width="260">
<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;</p>
</td>
<td valign="top" width="306">
<p>UBS LOAN FINANCE LLC</p>
</td>
</tr>

<tr>
<td valign="top" width="260">
</td>
<td valign="top" width="306">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="260">
</td>
<td valign="top" width="306">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="306">
<p>By:&nbsp; <u>/s/&nbsp; Edward
Gripps&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="306">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Edward
Gripps</p>
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="306">
<p>&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;Title:&nbsp;&nbsp;&nbsp;&nbsp; Director</p>
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="306">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="306">
<p>By:&nbsp; <u>/s/&nbsp; Joselin
Fernandes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="306">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Joselin
Fernandes</p>
</td>
</tr>

<tr>
<td valign="top" width="260"></td>
<td valign="top" width="306">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; Associate Director</p>
</td>
</tr>
</table>

<br clear="all" />


<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>UNION BANK OF CALIFORNIA, N.A.</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Dennis G.
Blank&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Dennis G.
Blank</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp;&nbsp;&nbsp;
&nbsp; Vice President</p>
</td>
</tr>
</table>

<br clear="all" />


<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>KBC BANK N.V.</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Jean-Pierre
Diels&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp;&nbsp;
Jean-Pierre Diels</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; First Vice President</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Eric
Raskin&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Eric
Raskin</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; Vice President</p>
</td>
</tr>
</table>

<br clear="all" />


<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>MORGAN STANLEY BANK</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Daniel Twenge </u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Daniel
Twenge</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; Vice President</p>
</td>
</tr>
</table>

<br clear="all" />


<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top">
<p>WILLIAM STREET COMMITMENT CORPORATION (Recourse only to assets
of William Street Commitment Corporation)</p>
</td>
</tr>

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

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>By:&nbsp; <u>/s/&nbsp; Manda
D&rsquo;Agata&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Manda
D&rsquo;Agata</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title:&nbsp;&nbsp;&nbsp;&nbsp; Assistant Vice President</p>
</td>
</tr>
</table>
</div>

<hr>

<br clear="all" />


<div>
<p>COMMITMENTS</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p>Lender</p>
</td>
<td valign="top">
<p>Commitment</p>
</td>
</tr>

<tr>
<td valign="top">
<p>Citicorp North America, Inc.</p>
</td>
<td valign="top">
<p>$93,000,000.00</p>
</td>
</tr>

<tr>
<td valign="top">
<p>JPMorgan Chase Bank, N.A.</p>
</td>
<td valign="top">
<p>$93,000,000.00</p>
</td>
</tr>

<tr>
<td valign="top">
<p>Barclays Bank PLC</p>
</td>
<td valign="top">
<p>$80,000,000.00</p>
</td>
</tr>

<tr>
<td valign="top">
<p>BNP Paribas</p>
</td>
<td valign="top">
<p>$80,000,000.00</p>
</td>
</tr>

<tr>
<td valign="top">
<p>Deutsche Bank AG New York Branch</p>
</td>
<td valign="top">
<p>$80,000,000.00</p>
</td>
</tr>

<tr>
<td valign="top">
<p>ABN Amro Bank N.V.</p>
</td>
<td valign="top">
<p>$62,000,000.00</p>
</td>
</tr>

<tr>
<td valign="top">
<p>Lehman Brothers Bank, FSB</p>
</td>
<td valign="top">
<p>$62,000,000.00</p>
</td>
</tr>

<tr>
<td valign="top">
<p>Mellon Bank, N.A.</p>
</td>
<td valign="top">
<p>$62,000,000.00</p>
</td>
</tr>

<tr>
<td valign="top">
<p>Royal Bank of Canada</p>
</td>
<td valign="top">
<p>$62,000,000.00</p>
</td>
</tr>

<tr>
<td valign="top">
<p>The Bank of New York</p>
</td>
<td valign="top">
<p>$62,000,000.00</p>
</td>
</tr>

<tr>
<td valign="top">
<p>The Bank of Nova Scotia</p>
</td>
<td valign="top">
<p>$62,000,000.00</p>
</td>
</tr>

<tr>
<td valign="top">
<p>UBS Loan Finance LLC</p>
</td>
<td valign="top">
<p>$62,000,000.00</p>
</td>
</tr>

<tr>
<td valign="top">
<p>Union Bank of California, N.A.</p>
</td>
<td valign="top">
<p>$62,000,000.00</p>
</td>
</tr>

<tr>
<td valign="top">
<p>KBC Bank, NV</p>
</td>
<td valign="top">
<p>$26,000,000.00</p>
</td>
</tr>

<tr>
<td valign="top">
<p>Morgan Stanley Bank</p>
</td>
<td valign="top">
<p>$26,000,000.00</p>
</td>
</tr>

<tr>
<td valign="top">
<p>William Street Commitment Corporation</p>
</td>
<td valign="top">
<p>$26,000,000.00</p>
</td>
</tr>

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

<tr>
<td valign="top">
<p><b>Total</b></p>
</td>
<td valign="top">
<p><b>$1,000,000,000.00</b></p>
</td>
</tr>
</table>
</div>
</body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-11
<SEQUENCE>6
<FILENAME>q105_ex11.htm
<DESCRIPTION>EXHIBIT 11
<TEXT>
<HTML>
<HEAD>

<META NAME="Generator" CONTENT="Microsoft Word 97">
<TITLE>EXHIBIT 11</TITLE>
</HEAD>
<BODY>

<B><FONT SIZE=2><P ALIGN="CENTER">EXHIBIT 11<BR>
PG&amp;E CORPORATION<BR>
COMPUTATION OF EARNINGS PER COMMON SHARE<BR>
<BR>
</P></B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=573>
<TR><TD WIDTH="73%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="27%" VALIGN="BOTTOM" COLSPAN=7 HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</B></FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="27%" VALIGN="BOTTOM" COLSPAN=7 HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="CENTER">March 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="27%" VALIGN="TOP" COLSPAN=7 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9>
<B><FONT SIZE=2><P>(in millions, except share amounts)</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=1><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=4 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="27%" VALIGN="BOTTOM" COLSPAN=7 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P>Net income </B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">218&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">3,033&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P>Less: distributed earnings to common shareholders </FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">111&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>Undistributed earnings</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">107&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">3,033&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9>
<B><FONT SIZE=2><P>Common shareholders earnings</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<B><I><FONT SIZE=2><P>Basic</B></I></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>Distributed earnings to common shareholders</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">111&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P>Undistributed earnings allocated to common shareholders</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">102&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">2,893&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P>Total common shareholders earnings, basic</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">213&nbsp;</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">2,893&nbsp;</B></FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9>
<B><I><FONT SIZE=2><P ALIGN="JUSTIFY">Diluted</B></I></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>Distributed earnings to common shareholders</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">111&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P>Undistributed earnings allocated to common shareholders</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">102&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">2,897&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="JUSTIFY">Total common shareholders earnings, diluted</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">$</B></FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">213&nbsp;</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">$</B></FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">2,897&nbsp;</B></FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9>
<B><FONT SIZE=2><P>Weighted average common shares outstanding, basic</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">388&nbsp;</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">393&nbsp;</B></FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>9.50% Convertible Subordinated Notes</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">19&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">19&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P>Weighted average common shares outstanding and participating securities, basic</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">407&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">412&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>Weighted average common shares outstanding, basic</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">388&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">393&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P>Employee stock options, restricted stock and PG&amp;E Corporation shares held by grantor trusts </FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">4&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">7&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>PG&amp;E Corporation warrants</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">4&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P>Rounding</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">1&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P>Weighted average common shares outstanding, diluted <SUP>(1)</B></SUP></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">392&nbsp;</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">405&nbsp;</B></FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P>9.50% Convertible Subordinated Notes</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">19&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">19&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>Weighted average common shares outstanding and participating securities, diluted</FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">411&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">424&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9>
<B><FONT SIZE=2><P>Net earnings per common share, basic</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P>Distributed earnings, basic</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">0.29&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>Undistributed earnings, basic</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">0.26&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">7.36&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9>
<B><FONT SIZE=2><P>Total</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">$</B></FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">0.55&nbsp;</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">$</B></FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">7.36&nbsp;</B></FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9>
<B><FONT SIZE=2><P>Net earnings per common share, diluted</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P>Distributed earnings, diluted</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">0.28&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P>Undistributed earnings, diluted</FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">0.26&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9>
<FONT SIZE=2><P ALIGN="RIGHT">7.15&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P>Total</B></FONT></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">$</B></FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">0.54&nbsp;</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" BGCOLOR="#c0c0c0" HEIGHT=9><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">$</B></FONT></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#c0c0c0" HEIGHT=9>
<B><FONT SIZE=2><P ALIGN="RIGHT">7.15&nbsp;</B></FONT></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="73%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="9%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=552>
<TR><TD WIDTH="9%" VALIGN="TOP">
<SUP><FONT SIZE=2><P ALIGN="RIGHT"><BR>
(1)</SUP></FONT></TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT SIZE=2><P><BR>
</FONT><FONT SIZE=1>Options to purchase 6,500 and 8,542,006 PG&amp;E Corporation common shares were outstanding during the three months ended March 31, 2005 and 2004, respectively, but not included in the computation of diluted earnings per common share because the option exercise prices were greater than the average market price.</FONT></TD>
</TR>
</TABLE>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12.1
<SEQUENCE>7
<FILENAME>q105_ex12-1.htm
<DESCRIPTION>EXHIBIT 12.1
<TEXT>
<HTML>
<HEAD>

<META NAME="Generator" CONTENT="Microsoft Word 97">
<TITLE>Exhibit 12</TITLE>
</HEAD>
<BODY>

<TABLE CELLSPACING=0 BORDER=0 WIDTH=725>
<TR><TD VALIGN="BOTTOM" COLSPAN=36 HEIGHT=15>
<B><FONT SIZE=2><P>Exhibit 12.1</B></FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=36 HEIGHT=15>
<B><FONT SIZE=2><P>Pacific Gas and Electric Company</B></FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=36 HEIGHT=15>
<B><FONT SIZE=2><P>Computation of Ratios of Earnings to Fixed Charges</B></FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=36 HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=58><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=58>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended<BR>
March 31,</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=58><P></P></TD>
<TD WIDTH="47%" VALIGN="BOTTOM" COLSPAN=23 HEIGHT=58>
<B><FONT SIZE=2><P ALIGN="CENTER">Year Ended December 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="47%" VALIGN="BOTTOM" COLSPAN=23 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=20>
<B><FONT SIZE=2><P>(dollars in millions)</B></FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=20>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=20>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=20>
<B><FONT SIZE=2><P ALIGN="CENTER">2003</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=20>
<B><FONT SIZE=2><P ALIGN="CENTER">2002</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=20>
<B><FONT SIZE=2><P ALIGN="CENTER">2001</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=20>
<B><FONT SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=20>
<B><FONT SIZE=2><P>Earnings <SUP>(1)</B></SUP></FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=20><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=20><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=20><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=20><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=20><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=20><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=18>
<FONT SIZE=2><P>Pre-tax income (loss) from continuing operations</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">365&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">6,543</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">1,451&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">2,997&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$ </FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">1,611&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$ </FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">(5,637)</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P>Add:</FONT></TD>
<TD WIDTH="37%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=18>
<FONT SIZE=2><P>Fixed Charges</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">161</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">671</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">964&nbsp; </FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">1,029&nbsp; </FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">1,019&nbsp; </FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">648&nbsp; </FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P>Less:</FONT></TD>
<TD WIDTH="37%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=18>
<FONT SIZE=2><P>Preferred dividend requirements of subsidiaries</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=18>
<B><FONT SIZE=2><P>Total Earnings (Loss)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">526&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">7,214</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">2,415&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">4,026&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">2,630&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">(4,989)</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=18>
<B><FONT SIZE=2><P>Fixed Charges<SUP> (2)</B></SUP></FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=18>
<FONT SIZE=2><P>Interest expense, net, including amortization of </FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=18>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;debt issue costs, premiums and discounts</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">154&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">668</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">939&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">990&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">976&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">609&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=18>
<FONT SIZE=2><P>AFUDC Debt</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">3&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">(12)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">16&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">21&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">12&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">6&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=18>
<FONT SIZE=2><P>Estimate of interest expense within rents</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">4&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">15</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">9&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">8&nbsp; </FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">7&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">9&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=18>
<FONT SIZE=2><P>Preferred dividend requirements of subsidiaries</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=18>
<FONT SIZE=2><P>Preferred security requirements of wholly-owned trust</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">10&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">24&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">24&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=18>
<B><FONT SIZE=2><P>Total Fixed Charges</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">161&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">671</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">964&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">1,029&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">1,019&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">648&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="41%" VALIGN="BOTTOM" COLSPAN=7 HEIGHT=18><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=8 HEIGHT=18>
<B><FONT SIZE=2><P>Ratio of Earnings (Loss) to Fixed Charges<SUP> (3)</B></SUP></FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">3.27&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">10.75</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">2.51&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">3.91&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">2.58&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">(7.70)</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=1><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=16><P></P></TD>
<TD WIDTH="35%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" COLSPAN=5 HEIGHT=49>
<SUP><FONT SIZE=2><P>(1)</SUP></FONT></TD>
<TD WIDTH="93%" VALIGN="TOP" COLSPAN=31 HEIGHT=49>
<FONT SIZE=2><P>For purposes of computing the ratio of earnings to fixed charges, "earnings" represents pre-tax income from continuing operations adjusted for minority interest in consolidated subsidiaries and equity in income or loss from subsidiaries accounted for using the equity method plus fixed charges, as computed, less the pre-tax earnings required to cover the preferred dividend requirements of subsidiaries.</FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=15><P></P></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=15><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=15><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" COLSPAN=5 HEIGHT=39>
<SUP><FONT SIZE=2><P>(2)</SUP></FONT></TD>
<TD WIDTH="93%" VALIGN="TOP" COLSPAN=31 HEIGHT=39>
<FONT SIZE=2><P>"Fixed charges" include interest, including amortization of debt issue costs, premiums and discounts, the debt portion of the allowance for funds used during construction, an estimate of the amount of interest within rents, and the preferred security requirements of consolidated subsidiaries.</FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=15><P></P></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="18%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=15><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=15><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=15><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=15><P></P></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" COLSPAN=5 HEIGHT=20>
<SUP><FONT SIZE=2><P>(3)</SUP></FONT></TD>
<TD WIDTH="93%" VALIGN="TOP" COLSPAN=31 HEIGHT=20>
<FONT SIZE=2><P>The ratio of earnings to fixed charges for the year 2000 indicates a ratio of less than one-to-one.  The dollar amount of the deficiency is approximately $5.6 billion.</FONT></TD>
</TR>
</TABLE>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12.2
<SEQUENCE>8
<FILENAME>q105_exh12-2.htm
<DESCRIPTION>EXHIBIT 12.2
<TEXT>
<HTML>
<HEAD>

<META NAME="Generator" CONTENT="Microsoft Word 97">
<TITLE>Exhibit 12</TITLE>
</HEAD>
<BODY>

<TABLE CELLSPACING=0 BORDER=0 WIDTH=725>
<TR><TD VALIGN="BOTTOM" COLSPAN=25 HEIGHT=15>
<B><FONT SIZE=2><P>Exhibit 12.2</B></FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=25 HEIGHT=15>
<B><FONT SIZE=2><P>Pacific Gas and Electric Company</B></FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=25 HEIGHT=15>
<B><FONT SIZE=2><P>Computation of Ratios of Earnings to Combined Fixed Charges and Preferred Dividends</B></FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" COLSPAN=25 HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=58><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=58>
<B><FONT SIZE=2><P ALIGN="CENTER">Three Months Ended<BR>
March 31,</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=58><P></P></TD>
<TD WIDTH="47%" VALIGN="BOTTOM" COLSPAN=15 HEIGHT=58>
<B><FONT SIZE=2><P ALIGN="CENTER">Year Ended December 31,</B></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="47%" VALIGN="BOTTOM" COLSPAN=15 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=20>
<B><FONT SIZE=2><P>(dollars in millions)</B></FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=20>
<B><FONT SIZE=2><P ALIGN="CENTER">2005</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=20>
<B><FONT SIZE=2><P ALIGN="CENTER">2004</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=20>
<B><FONT SIZE=2><P ALIGN="CENTER">2003</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=20>
<B><FONT SIZE=2><P ALIGN="CENTER">2002</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=20>
<B><FONT SIZE=2><P ALIGN="CENTER">2001</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=20>
<B><FONT SIZE=2><P ALIGN="CENTER">2000</B></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=1><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=20>
<B><FONT SIZE=2><P>Earnings <SUP>(1)</B></SUP></FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=20><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=20><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=20><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
<FONT SIZE=2><P>Pre-tax income (loss) from continuing operations</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">365&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">6,543</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">1,451&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">2,997&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$ </FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">1,611&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">(5,637)</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P>Add:</FONT></TD>
<TD WIDTH="37%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
<FONT SIZE=2><P>Fixed Charges</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">161&nbsp; </FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">671</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">964&nbsp; </FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">1,029&nbsp; </FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">1,019&nbsp; </FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">648&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18>
<FONT SIZE=2><P>Less:</FONT></TD>
<TD WIDTH="37%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
<FONT SIZE=2><P>Preferred dividend requirements of subsidiaries</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
<B><FONT SIZE=2><P>Total Earnings (Loss)</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">526&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">7,214</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">2,415&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">4,026&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">2,630&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">(4,989)</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=11><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=18>
<B><FONT SIZE=2><P>Fixed Charges<SUP> (2)</B></SUP></FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
<FONT SIZE=2><P>Interest expense, net, including amortization of </FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;debt issue costs, premiums and discounts</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">154&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">668</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">939&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">990&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">976&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">609&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
<FONT SIZE=2><P>AFUDC Debt</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">3&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">(12)</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">16&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">21&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">12&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">6&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
<FONT SIZE=2><P>Estimate of interest expense within rents</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">4&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">15</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">9&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">8&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">7&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">9&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
<FONT SIZE=2><P>Preferred dividend requirements of subsidiaries</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
<FONT SIZE=2><P>Preferred security requirements of wholly-owned trust</FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">-&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">10&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">24&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">24&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
<B><FONT SIZE=2><P>Total Fixed Charges</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">161&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">671</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">964&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">1,029&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">1,019&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">648&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=18>
<B><FONT SIZE=2><P>Preferred Stock Dividends</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
<FONT SIZE=2><P>Tax deductible dividends</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">2&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">9</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">9</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">9&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">9&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">9&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
<FONT SIZE=2><P>Pre-tax earnings required to cover non-tax<BR>
&nbsp;&nbsp;&nbsp;deductible preferred stock dividend requirements</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">7&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">34&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">27&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">28&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">27&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">27&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
<B><FONT SIZE=2><P>Total Preferred Stock Dividends</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">9&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">43&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">36&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">37&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">36&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">36&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
<B><FONT SIZE=2><P>Total Fixed Charges and Preferred Stock &nbsp;&nbsp;&nbsp;Dividends</B></FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">170&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">714&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">1,000&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">1,066&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">1,055&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">684&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=11><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=11><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=11><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="BOTTOM" COLSPAN=6 HEIGHT=18>
<B><FONT SIZE=2><P>Ratio of Earnings (Loss) to Combined Fixed Charges &nbsp;&nbsp;&nbsp;and Preferred Stock Dividends<SUP> (3)</B></SUP></FONT></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">3.09&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">10.10</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">2.42&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">3.78&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">2.49&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">(7.29)</FONT></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="2%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=1><P></P></TD>
<TD WIDTH="40%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2 BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=1><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" BGCOLOR="#000000" HEIGHT=1><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=9><P></P></TD>
<TD WIDTH="35%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="10%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="7%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=9><P></P></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=9><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=3 HEIGHT=49>
<SUP><FONT SIZE=2><P>(1)</SUP></FONT></TD>
<TD WIDTH="97%" VALIGN="TOP" COLSPAN=22 HEIGHT=49>
<FONT SIZE=2><P>For purposes of computing the ratio of earnings to fixed charges, "earnings" represents pre-tax income from continuing operations adjusted for minority interest in consolidated subsidiaries and equity in income or loss from subsidiaries accounted for using the equity method plus fixed charges, as computed, less the pre-tax earnings required to cover the preferred dividend requirements of subsidiaries.</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=15><P></P></TD>
<TD WIDTH="97%" VALIGN="BOTTOM" COLSPAN=22 HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=3 HEIGHT=39>
<SUP><FONT SIZE=2><P>(2)</SUP></FONT></TD>
<TD WIDTH="97%" VALIGN="TOP" COLSPAN=22 HEIGHT=39>
<FONT SIZE=2><P>"Fixed charges" include interest, including amortization of debt issue costs, premiums and discounts, the debt portion of the allowance for funds used during construction, an estimate of the amount of interest within rents, and the preferred security requirements of consolidated subsidiaries.</FONT></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=15><P></P></TD>
<TD WIDTH="97%" VALIGN="BOTTOM" COLSPAN=22 HEIGHT=15><P></P></TD>
</TR>
<TR><TD WIDTH="3%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<SUP><FONT SIZE=2><P>(3)</SUP></FONT></TD>
<TD WIDTH="97%" VALIGN="TOP" COLSPAN=22 HEIGHT=20>
<FONT SIZE=2><P>The ratio of earnings to fixed charges for the year 2000 indicates a ratio of less than one-to-one.  The dollar amount of the deficiency is approximately $5.6 billion.</FONT></TD>
</TR>
</TABLE>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>9
<FILENAME>ex31-1.htm
<DESCRIPTION>CORP CEO/CFO SECTION 302 CERTIFICATION
<TEXT>
<html>
<head>
<title>Exhbit 31.1</title>
</head>
<body link="blue" vlink="purple">
<div>
<p align="right"><font size="3" face="Times New Roman">Exhibit
31.1</font></p>

<p align="center"><font size="3" face=
"Times New Roman">CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER<br>
PURSUANT TO SECURITIES AND EXCHANGE COMMISSION RULE
13a-14(a)</font></p>

<p><font size="3" face="Times New Roman">I, Peter A. Darbee,
certify that:</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="666">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">1.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">I have reviewed this
Quarterly Report on Form 10-Q for the quarter ended March 31, 2005
of PG&amp;E Corporation;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">2.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Based on my knowledge,
this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period
covered by this report;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">3.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Based on my knowledge, the
financial statements, and other financial information included in
this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">4.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">The registrant's other
certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
</tr>
</table>

<table border="0" cellspacing="0" cellpadding="0" width="653">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">a.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Designed such disclosure
controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report
is being prepared;</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">b.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Designed such internal
control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">c.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Evaluated the
effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation;
and</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">d.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Disclosed in this report
any change in the registrant&rsquo;s internal control over
financial reporting that occurred during the registrant&rsquo;s
most recent fiscal quarter (the registrant&rsquo;s fourth quarter
in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrant&rsquo;s
internal control over financial reporting; and</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
</td>
<td valign="top">
<font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>
</td>
</tr>
</table>

<table border="0" cellspacing="0" cellpadding="0" width="666">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">5.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">The registrant's other
certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board
of directors (or persons performing the equivalent
functions):</font></p>
</td>
</tr>
<tr>
<td valign="top">
</td>
<td valign="top">
<font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>
</td>
</tr>
</table>

<table border="0" cellspacing="0" cellpadding="0" width="653">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">a.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">All significant
deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">b.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Any fraud, whether or not
material, that involves management or other employees who have a
significant role in the registrant's internal control over
financial reporting.</font></p>
<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
</tr>
</table>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Date: May 4,
2005</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&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">
<p><u><font size="3" face="Times New Roman">PETER A.
DARBEE&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></u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Peter A. Darbee</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">President and Chief
Executive Officer</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"><br clear="all">
</font></p>

<div align="center">

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

<p align="center"><font size="3" face=
"Times New Roman">CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER<br>
PURSUANT TO SECURITIES AND EXCHANGE COMMISSION RULE
13a-14(a)</font></p>

<p><font size="3" face="Times New Roman">I, Christopher P. Johns,
certify that:</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="666">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">1.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">I have reviewed this
Quarterly Report on Form 10-Q for the quarter ended March 31, 2005
of PG&amp;E Corporation;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">2.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Based on my knowledge,
this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period
covered by this report;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">3.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Based on my knowledge, the
financial statements, and other financial information included in
this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">4.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">The registrant's other
certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
</tr>
</table>

<table border="0" cellspacing="0" cellpadding="0" width="653">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">a.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Designed such disclosure
controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report
is being prepared;</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">b.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Designed such internal
control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">c.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Evaluated the
effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation;
and</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">d.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Disclosed in this report
any change in the registrant&rsquo;s internal control over
financial reporting that occurred during the registrant&rsquo;s
most recent fiscal quarter (the registrant&rsquo;s fourth quarter
in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrant&rsquo;s
internal control over financial reporting; and</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
</td>
<td valign="top">
<font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>
</td>
</tr>
</table>

<table border="0" cellspacing="0" cellpadding="0" width="666">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">5.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">The registrant's other
certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board
of directors (or persons performing the equivalent
functions):</font></p>
</td>
</tr>
<tr>
<td valign="top">
</td>
<td valign="top">
<font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>
</td>
</tr>
</table>

<table border="0" cellspacing="0" cellpadding="0" width="653">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">a.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">All significant
deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">b.&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Any fraud, whether or not
material, that involves management or other employees who have a
significant role in the registrant's internal control over
financial reporting.</font></p>
<p><font size="3" face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
</tr>
</table>

<table border="0" cellspacing="0" cellpadding="0" width="701">
<tr>
<td valign="top" width="155">
<p><font size="3" face="Times New Roman">Date: May 4,
2005</font></p>
</td>
<td valign="top" width="192">
<p><font size="3" face=
"Times New Roman">&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="348">
<p><u><font size="3" face="Times New Roman">CHRISTOPHER
P;JOHNS&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></u></p>
</td>
</tr>

<tr>
<td valign="top" width="155"></td>
<td valign="top" width="192"></td>
<td valign="top" width="348">
<p><font size="3" face="Times New Roman">Christopher P.
Johns</font></p>
</td>
</tr>

<tr>
<td valign="top" width="155"></td>
<td valign="top" width="192"></td>
<td valign="top" width="348">
<p><font size="3" face="Times New Roman">Senior Vice President,
Chief Financial Officer and Controller</font></p>
</td>
</tr>
</table>
</div>
</body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>10
<FILENAME>ex31-2.htm
<DESCRIPTION>UTILITY CEO/CFO SECTION 302 CERTIFICATION
<TEXT>
<html>
<head>
<title>Exhibit 31.2</title>
</head>
<body link="blue" vlink="purple">
<div>
<p align="right">Exhibit 31.2</p>

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

<p align="center">CERTIFICATION OF PRINCIPAL EXECUTIVE
OFFICER<br />
PURSUANT TO SECURITIES AND EXCHANGE COMMISSION RULE 13a-14(a)</p>

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

<p>I, Gordon R. Smith, certify that:</p>

<p></p>

<table border="0" cellspacing="0" cellpadding="0" width="666">
<tr>
<td valign="top">
<p>1.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>I have reviewed this Quarterly Report on Form 10-Q for the
quarter ended March 31, 2005 of PG&amp;E Corporation;</p>
</td>
</tr>

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

<tr>
<td valign="top">
<p>2.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this report;</p>
</td>
</tr>

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

<tr>
<td valign="top">
<p>3.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this report;</p>
</td>
</tr>

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

<tr>
<td valign="top">
<p>4.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>The registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</p>
</td>
</tr>
</table>

<p></p>

<table border="0" cellspacing="0" cellpadding="0" width="647">
<tr>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>a.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>b.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>c.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report
based on such evaluation; and</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>d.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>Disclosed in this report any change in the registrant&rsquo;s
internal control over financial reporting that occurred during the
registrant&rsquo;s most recent fiscal quarter (the
registrant&rsquo;s fourth quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially
affect, the registrant&rsquo;s internal control over financial
reporting; and</p>
</td>
</tr>
</table>

<p></p>

<table border="0" cellspacing="0" cellpadding="0" width="666">
<tr>
<td valign="top">
<p>5.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing
the equivalent functions):</p>
</td>
</tr>
</table>

<p></p>

<table border="0" cellspacing="0" cellpadding="0" width="668">
<tr>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>a.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>b.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.</p>
</td>
</tr>
</table>

<p></p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p>Date: May 4, 2005</p>
</td>
<td valign="top">
&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;
</td>
<td valign="top">
<p><u>GORDON R.
SMITH&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;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
</td>
<td valign="top">
<p>Gordon R. Smith</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
</td>
<td valign="top">
<p>President and Chief Executive Officer</p>
</td>
</tr>
</table>
</div>

<br clear="all" />


<hr>


<div>
<p align="center">CERTIFICATION OF PRINCIPAL FINANCIAL
OFFICER<br />
PURSUANT TO SECURITIES AND EXCHANGE COMMISSION RULE 13a-14(a)</p>

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

<p>I, Kent M. Harvey, certify that:</p>

<p></p>

<table border="0" cellspacing="0" cellpadding="0" width="666">
<tr>
<td valign="top">
<p>1.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>I have reviewed this Quarterly Report on Form 10-Q for the
quarter ended March 31, 2005 of PG&amp;E Corporation;</p>
</td>
</tr>

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

<tr>
<td valign="top">
<p>2.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this report;</p>
</td>
</tr>

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

<tr>
<td valign="top">
<p>3.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this report;</p>
</td>
</tr>

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

<tr>
<td valign="top">
<p>4.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>The registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</p>
</td>
</tr>
</table>

<p></p>

<table border="0" cellspacing="0" cellpadding="0" width="647">
<tr>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>a.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>b.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>c.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report
based on such evaluation; and</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>d.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>Disclosed in this report any change in the registrant&rsquo;s
internal control over financial reporting that occurred during the
registrant&rsquo;s most recent fiscal quarter (the
registrant&rsquo;s fourth quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially
affect, the registrant&rsquo;s internal control over financial
reporting; and</p>
</td>
</tr>
</table>

<p></p>

<table border="0" cellspacing="0" cellpadding="0" width="666">
<tr>
<td valign="top">
<p>5.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing
the equivalent functions):</p>
</td>
</tr>
</table>

<p></p>

<table border="0" cellspacing="0" cellpadding="0" width="668">
<tr>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>a.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and</p>
</td>
</tr>

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

<tr>
<td valign="top"></td>
<td valign="top">
<p>b.&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.</p>
</td>
</tr>
</table>

<p></p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p>Date: May 4, 2005</p>
</td>
<td valign="top">
&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;
</td>
<td valign="top">
<p><u>KENT M.
HARVEY&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;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
</td>
<td valign="top">
<p>Kent M. Harvey</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
</td>
<td valign="top">
<p>Senior Vice President, Chief Financial Officer and Treasurer</p>
</td>
</tr>
</table>

<p></p>
</div>
</body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>11
<FILENAME>ex32-1corp906cert.htm
<DESCRIPTION>CORP CEO/CFO SECTION 906 CERTIFICATION
<TEXT>
<html>
<head>
<title>Exhibit 32.1</title>
</head>
<body>
<div>
<p align="right"><b>Exhibit 32.1</b></p>

<p align="center"><b><br>
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER<br>
PURSUANT TO 18 U.S.C. SECTION 1350<br>
</b></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
connection with the accompanying Quarterly Report on Form 10-Q of
PG&amp;E Corporation for the quarter ended March 31, 2005, I, Peter
A. Darbee, President and Chief Executive Officer of PG&amp;E
Corporation, hereby certify pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
to the best of my knowledge and belief, that:</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)</p>
</td>
<td valign="top">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
<td valign="top">
<p>such Quarterly Report on Form 10-Q of PG&amp;E Corporation for
the quarter ended March 31, 2005, fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
</td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</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;(2)</p>
</td>
<td valign="top">
</td>
<td valign="top">
<p>the information contained in such Quarterly Report on Form 10-Q
of PG&amp;E Corporation for the quarter ended March 31, 2005,
fairly presents, in all material respects, the financial condition
and results of operations of PG&amp;E Corporation.</p>
</td>
</tr>

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

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">&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;&nbsp;</td>
<td valign="top">
<p><u>PETER A.
DARBEE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>PETER A. DARBEE.</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>President and Chief Executive Officer</p>
</td>
</tr>

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

<p>May 4, 2005</p>

<hr>

<br clear="all">


<p><b>&nbsp;</b></p>

<p align="center"><b>CERTIFICATION OF PRINCIPAL FINANCIAL
OFFICER<br>
PURSUANT TO 18 U.S.C. SECTION 1350<br>
</b></p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
connection with the accompanying Quarterly Report on Form 10-Q of
PG&amp;E Corporation for the quarter ended March 31, 2005, I,
Christopher P. Johns, Senior Vice President, Chief Financial
Officer and Controller of PG&amp;E Corporation, hereby certify
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge
and belief, that:</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)</p>
</td>
<td valign="top">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
<td valign="top">
<p>such Quarterly Report on Form 10-Q of PG&amp;E Corporation for
the quarter ended March 31, 2005, 2004, fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
</td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</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;(2)</p>
</td>
<td valign="top">
</td>
<td valign="top">
<p>the information contained in such Quarterly Report on Form 10-Q
of PG&amp;E Corporation for the quarter ended March 31, 2005,
fairly presents, in all material respects, the financial condition
and results of operations of PG&amp;E Corporation.</p>
</td>
</tr>

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

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<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;</p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">&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;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td valign="top">
<p><u>CHRISTOPHER P.
JOHNS&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>CHRISTOPHER P. JOHNS</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>Senior Vice President,</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>Chief Financial Officer and Controller</p>
</td>
</tr>

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

<p>May 4, 2005</p>

<p>&nbsp;</p>
</div>
</body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>12
<FILENAME>ex32-2906cert.htm
<DESCRIPTION>UTILITY CEO/CFO SECTION 906 CERTIFICATION
<TEXT>
<html>
<head>
<title>Exhibit 32.2</title>
</head>
<body>
<div>
<p align="right"><b>Exhibit 32.2</b></p>

<p align="center"><b>CERTIFICATION OF PRINCIPAL EXECUTIVE
OFFICER<br>
PURSUANT TO 18 U.S.C. SECTION 1350<br>
</b></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the accompanying Quarterly Report on Form 10-Q
of Pacific Gas and Electric Company for the quarter ended March 31,
2005, I, Gordon R. Smith, President and Chief Executive Officer of
Pacific Gas and Electric Company, hereby certify pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief,
that:</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;</p>
</td>
<td valign="top">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</td>
<td valign="top">
<p>such Quarterly Report on Form 10-Q of Pacific Gas and Electric
Company for the quarter ended March 31, 2005, fully complies with
the requirements of section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and</p>
</td>
</tr>

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

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;</p>
</td>
<td valign="top">
</td>
<td valign="top">
<p>the information contained in such Quarterly Report on Form 10-Q
of Pacific Gas and Electric Company for the quarter ended March 31,
2005, fairly presents, in all material respects, the financial
condition and results of operations of Pacific Gas and Electric
Company.</p>
</td>
</tr>
</table>

<p><br>
<br>
<br>
</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p><u>GORDON R.
SMITH&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>GORDON R. SMITH</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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>President and Chief Executive Officer</p>
</td>
</tr>
</table>

<p>May 4, 2005</p>

<br clear="all">


<hr>


<p><b>&nbsp;</b></p>

<p align="center"><b>CERTIFICATION OF PRINCIPAL FINANCIAL
OFFICER<br>
PURSUANT TO 18 U.S.C. SECTION 1350<br>
</b></p>

<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the accompanying Quarterly Report on Form 10-Q
of Pacific Gas and Electric Company for the quarter ended March 31,
2005, I, Kent M. Harvey, Senior Vice President, Chief Financial
Officer and Treasurer of Pacific Gas and Electric Company, hereby
certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my
knowledge and belief, that:</p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
</td>
<td valign="top">
<p>such Quarterly Report on Form 10-Q of Pacific Gas and Electric
Company for the quarter ended March 31, 2005, fully complies with
the requirements of section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and</p>
</td>
</tr>

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

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;</p>
</td>
<td valign="top">
</td>
<td valign="top">
<p>the information contained in such Quarterly Report on Form 10-Q
of Pacific Gas and Electric Company for the quarter ended March 31,
2005, fairly presents, in all material respects, the financial
condition and results of operations of Pacific Gas and Electric
Company.</p>
</td>
</tr>
</table>

<table border="0" cellspacing="0" cellpadding="0" width="644">
<tr>
<td valign="top" width="336"></td>
<td valign="top" width="304">&nbsp;
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
</tr>

<tr>
<td valign="top" width="336">&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td valign="top" width="304">
<p><u>KENT M.
HARVEY&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
</td>
</tr>

<tr>
<td valign="top" width="336"></td>
<td valign="top" width="304">
<p>KENT M. HARVEY</p>
</td>
</tr>

<tr>
<td valign="top" width="336"></td>
<td valign="top" width="304">
<p>Senior Vice President, Chief Financial Officer</p>
</td>
</tr>

<tr>
<td valign="top" width="336"></td>
<td valign="top" width="304">
<p>and Treasurer</p>
</td>
</tr>
</table>

<p>May 4, 2005</p>
</div>
</body>
</html>

</TEXT>
</DOCUMENT>
</SUBMISSION>
