ex1021.htm


    Exhibit
10.21

    


    2010 OFFICER SHORT-TERM
INCENTIVE PLAN

    


    On
February 16, 2010, the Compensation Committee of the PG&E Corporation Board
of Directors (“Committee”) approved the specific performance targets for each
component of the 2010 Short-Term Incentive Plan (“STIP”).  The
Committee previously approved the STIP structure and the weighting of each
component in December 2009.  Officers of PG&E Corporation and the
Utility are eligible to receive cash incentives under the STIP based on the
extent to which the adopted 2010 performance targets are met.  The
Committee will continue to retain full discretion as to the determination of
final officer STIP payments.

    


    The
corporate financial performance target, with a weighting of 50%, is based on
PG&E Corporation’s budgeted earnings from operations that were previously
approved by the Board of Directors, consistent with the basis for reporting and
guidance to the financial community.  As with previous earnings
performance scales, unbudgeted items impacting comparability such as changes in
accounting methods, workforce restructuring, and one-time occurrences will be
excluded.

    


    The
Committee also approved the 2010 performance targets for each of the five other
measures set forth in the table below.  The 2009 performance results
for each of these measures are included for comparative purposes.

    


    2010 STIP Operational Performance
Targets(1)

    


    
      	
              Measure

            	 
      	
              Relative
      Weight

            	 
      	
              2009
      Results

            	 
      	
              2010
      Target

            
	
              
                Customer
      Satisfaction and Brand Health Index (Residential & Business)(2)

              

            	 
      	
              
                15.0%

              

            	 
      	
              
                76.8

              

            	 
      	
              
                77.7

              

            
	
              
                Reliable Energy Delivery
      Index(3)

              

            	 
      	
              
                15.0%

              

            	 
      	
              
                1.775

              

            	 
      	
              
                1.00

              

            
	
              
                Employee Survey (Premier)
      Index(4)

              

            	 
      	
              
                5%

              

            	 
      	
              
                66.70%

              

            	 
      	
              
                68.70%

              

            
	
              
                Occupational
      Safety and Health Administration (OSHA) Recordable Injury Rate and Motor
      Vehicle Incident (MVI) Rate(5)

              

            	 
      	
              
                10%

              

            	 
      	
              
                2.382

              

            	 
      	
              
                1.0

              

            
	
              
                Environmental
      Leadership(6)

              

            	 
      	
              
                5%

              

            	 
      	
              
                N/A

              

            	 
      	
              
                1.0

              

            


    

    


    
      	
              1.

            	
              As
      explained above, 50% of the STIP award will be based on achievement of
      corporate earnings from operations
targets.

            


    

     

    
      	
              2.

            	
              The
      Customer Satisfaction and Brand Health Index is the result of a quarterly
      survey performed by an independent research firm, TNS Custom Research, and
      is a combination of a customer satisfaction score, which has a 75%
      weighting, as well as a brand favorability score (measuring the relative
      strength of the PG&E brand against a select group of companies), which
      has a 25% weighting.  The customer satisfaction score will
      measure overall satisfaction with the Utility’s operational performance in
      delivering its services.  The brand favorability score will
      measure residential, small business and medium business customer
      perceptions.

            


    

     

    
      	
              3.

            	
              The
      Reliable Energy Delivery Index is a composite index score that measures
      leading indicators of electric and gas reliability performance, including
      electric outage frequency and duration (System Average Interruption
      Frequency Index (SAIFI), Customer Average Interruption Duration Index
      (CAIDI)) and performance improvement in the resurvey of the Utility’s gas
      system.

            


    

     

    
      	
              4.

            	
              The
      Premier Survey is the primary tool used to measure employee engagement at
      PG&E Corporation and the Utility.  The average overall
      employee survey index score provides a comprehensive metric that is
      derived by adding the percent of favorable responses from all 40 core
      survey items and then dividing the total sum by
  40.

            


    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              5.

            	
              The
      Safety Index includes (1) Occupational Safety and Health Administration
      (OSHA) Recordable Rate, and (2) Motor Vehicle Incident (MVI)
      Rate.  An “OSHA Recordable”, with a 75% weighting, is an
      occupational (job-related) injury or illness that requires medical
      treatment beyond first aid, or results in work restrictions, death or loss
      of consciousness. The “OSHA Recordable Rate” is the number of OSHA
      Recordables for every 200,000 hours worked, or for approximately 100
      employees.  This metric measures the percentage reduction in the
      PG&E Corporation’s and the Utility’s OSHA Recordable rate from the
      prior year and is used to monitor the effectiveness of the companies’
      safety programs, which are intended to significantly reduce the number and
      degree of employee injuries and illnesses.  The MVI Rate, with a
      25% weighting, is defined as the number of chargeable motor vehicle
      incidents per 1 million miles driven.  A chargeable incident is
      one where the Company driver could have prevented an incident, but failed
      to take reasonable steps to do so.  For 2010, subject to the
      Committee’s discretion, if there is an employee fatality that results from
      an accident while such employee is acting in the course and scope of his
      or her employment, the maximum 2010 STIP rating for the Safety performance
      measure shall be 1.0.  The 2009 result of 2.382 is for the OSHA
      Recordable Rate only.  The MVI Rate is new for
    2010.

            


    

     

    


    
      	
               6.
      

            	
              Environmental
      compliance is measured by the (1) Notice of Violation (NOV) Rate, and (2)
      the Utility’s operational footprint in reducing energy and water usage,
      and increasing solid waste diversion.  Agency NOV rate is
      defined as the rate of NOVs per 100 agency
      inspections.   Energy reduction is measured by the percent
      reduction in millions of British Thermal Units for a subset of Utility
      facilities. Water use reduction is measured by the percentage reduction in
      water consumption, in gallons, for a subset of Utility facilities. Solid
      waste diversion is measured by the percent reduction in solid waste
      disposal at a subset of Utility facilities. Solid waste includes
      non-hazardous waste, such as glass, paper, and certain metals. The focus
      of this measure is to divert solid waste from landfills, primarily through
      increased recycling efforts.

            


    

    


     

    Cash
awards under the STIP may range from 40 percent to 100 percent of base salary
depending on officer level, with a maximum payout of 200 percent of the
officer’s targeted award, as determined by the Committee.