EXECUTION COPY First Amendment



Exhibit 10.2


Execution Version


FIRST AMENDMENT



               FIRST
AMENDMENT, dated as of April 8, 2005 (this “First
Amendment”), to the Credit Agreement, dated as of December
10, 2004 (as amended, supplemented, restated or otherwise modified
from time to time, the “Credit Agreement”), among
PG&E CORPORATION, a California corporation (the
“Borrower”), the several banks and other financial
institutions or entities from time to time parties to the Credit
Agreement (the “Lenders”), BNP PARIBAS
(“BNP”) and DEUTSCHE BANK SECURITIES INC.
(“Deutsche”), as joint lead arrangers and joint
bookrunners (together and in such capacities, the 
“Arrangers”), Deutsche, as syndication agent (in such
capacity, the “Syndication Agent”), 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
“Documentation Agents”), and BNP, as administrative
agent (in such capacity, together with any successors thereto, the
“Administrative Agent”).



W I T N E S S E T H:



               WHEREAS,
pursuant to the Credit Agreement, the Lenders have agreed to make
certain loans and other extensions of credit to the Borrower;



               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;



               NOW,
THEREFORE, the parties hereto hereby agree as follows:



               SECTION
1.  Defined Terms.  Unless otherwise defined
herein, capitalized terms that are defined in the Credit Agreement
are used herein as therein defined.



               SECTION
2.  Amendments to Section 1.1 (Defined
Terms). 



               (a) 
The definition of “Applicable Margin” that appears in
Section 1.1 of the Credit Agreement is hereby amended (i) by
replacing the reference to “level 3” in the last
sentence therein with “level 4” and (ii) amending and
restating the grid that appears therein to read as follows:



	
Level

	
Rating


S&P/Moody’s

	
Applicable Margin

 for

 Eurodollar Loans

	
Applicable Margin

 for

 ABR Loans


	
1

	
ü BBB+/Baa1

	
0.50%

	
0.00%


	
2

	
BBB/Baa2

	
0.70%

	
0.00%


	
3

	
BBB-/Baa3

	
1.05%

	
0.00%


	
4

	
< BBB-/Baa3

	
1.35%

	
0.50%











               (b) 
The definition of “Facility Fee Rate” that appears in
Section 1.1 of the Credit Agreement is hereby amended (i) by
replacing the reference to “level 3” in the last
sentence therein with “level 4” and (ii) amending and
restating the grid that appears therein to read as follows:



	
Level

	
Rating

 S&P/Moody’s

	
Facility Fee Rate


	
1

	
ü BBB+/Baa1

	
0.15%


	
2

	
BBB/Baa2

	
0.175%


	
3

	
BBB-/Baa3

	
0.20%


	
4

	
< BBB-/Baa3

	
0.40%








               (c) 
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:  


	

                                 

	
“Material Adverse Effect”:  (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’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. 


		
      


		
“PG&E Utility Credit Agreement”: 
the $1,000,000,000 credit agreement, dated as of April 8, 2005,
among PG&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).






               (d) 
The definition of “Termination Date” that appears in
Section 1.1 of the Credit Agreement is hereby amended by replacing
the word “third” therein with the word
“fifth.”



               (e) 
The following definitions that appear in Section 1.1 of the Credit
Agreement are hereby deleted in their respective entireties: 
“Dividend Commencement Date” and “Specified
Indebtedness”.



               SECTION
3.  Amendment to Section 2.3(b) (Commitment
Increases).  Section 2.3(b) of the Credit Agreement is
hereby amended by replacing the reference to
“$10,000,000” therein with
“$5,000,000.”



               SECTION
4.  Amendment to Section 4.1 (Financial
Condition).  The first two sentences of Section 4.1 of the
Credit Agreement are hereby amended and restated in their entirety
to read as follows:


	

                                 

	
4.1  Financial Condition.  The audited
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as of December 31, 2004, and the related
consolidated statement of operations and cash flows for the fiscal
year ended on such date, reported on by Deloitte & 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.  All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods
involved. 






               SECTION
5.  Amendment to Section 4.10 (ERISA).  The
first sentence of Section 4.10 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:


	

                                 

	
4.10   ERISA.  Neither a Reportable Event (other
than the Post-event Notices of Reportable Events filed with the
PBGC on May 2, 2001, in respect of the April 6, 2001,
bankruptcy filing of PG&E Utility, on July 16, 2003, in
respect of the July 8, 2003, bankruptcy filing of National
Energy & Gas Transmission (“NEGT”), and on November
4, 2004, in respect of the departure of NEGT from the PG&E
Utility controlled group of companies on October 29, 2004) nor an
“accumulated funding deficiency” (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has
occurred during the five‐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, “accumulated funding deficiency”
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. 









               SECTION
6.  Amendment to Section 4.14 (Accuracy of
Information).  The last sentence of Section 4.14 of the
Credit Agreement is hereby amended and restated in its entirety to
read as follows:


	

                                 

	
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.









               SECTION
7.  Amendment to Section 5.2(b) (Conditions to Each Credit
Event).  Section 5.2(b) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:


	

                                 

	
(b)  Representations and Warranties.  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 (other than the representations and
warranties set forth in Sections 4.2 and 4.6(b)) 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).






               SECTION
8. Amendment to Section 6.5(b) (Maintenance of Property;
Insurance).  Section 6.5 of the Credit Agreement is hereby
amended by deleting each reference to the phrase “or the
applicable Significant Subsidiary” therein. 



               SECTION
9.  Amendment to Section 6.7(b) (Notices). 
Section 6.7(b) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:


	

                                 

	
(b)  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;






               SECTION
10.  Amendment to Section 7.2 of the Credit Agreement
(Indebtedness).   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 “(b) permit”
therein with the word “Permit”. 



               SECTION
11.  Amendment to Section 7.4 of the Credit Agreement
(Fundamental Changes).  Section 7.4 of the Credit
Agreement is hereby amended and restated in its entirety to read as
follows:


	

                                 

	
7.4  Fundamental Changes.  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) the ratings by Moody’s and S&P of the continuing
or surviving corporation’s or purchaser’s, as the case
may be, senior, unsecured, non credit-enhanced debt shall be at
least the higher of (1) Baa3 from Moody’s and BBB- from
S&P and (2) the ratings by such rating agencies of the
Borrower’s senior, unsecured, non credit-enhanced debt in
effect before the earlier of the occurrence or the public
announcement of such event.









               SECTION
12.  Amendments to Section 8 (Events of Default). 
Section 8 is hereby amended as follows:



               (a)  by
amending and restating clause (c) of such section in its entirety
to read as follows:


	

                                 

	
(c)  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






               (b)  by
adding the following proviso at the end of clause (e) of such
section: 


	

                                 

	
;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






               (c)  by
amending and restating clause (g) of such section in its entirety
to read as follows:


	

                                 

	
(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






               SECTION
13.  Conditions to Effectiveness.  This First
Amendment shall become effective on the date first set forth above
(such date, the “First Amendment Effective Date”) upon
the satisfaction of the following conditions precedent:



               (a)  the
Administrative Agent shall have received counterparts of this First
Amendment duly executed and delivered by the Borrower and each of
the Lenders;



               (b)  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



               (c)  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’s outstanding Commitments on the First Amendment
Effective Date.



               SECTION
14.  Representations and Warranties.  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). 



               SECTION
15.  Counterparts.  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.  A set of the
copies of this First Amendment signed by all the parties shall be
lodged with the Borrower and the Administrative Agent.  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.



               SECTION
16.  Continuing Effect; No Other Amendments. 
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.  Any
references in the Credit Agreement to “this Agreement”,
“hereunder”, “herein” or words of like
import, and each reference in any other document executed in
connection with the Credit Agreement to “the
Agreement”, “the Credit Agreement”,
“thereunder”, “therein” or words of like
import, shall mean and be a reference to the Credit Agreement as
amended hereby.



               SECTION
17.  GOVERNING LAW.  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.
















               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.



	

                                                                            

	
PG&E CORPORATION


		
          


		
By:  /s/  Leroy T. Barnes, Jr._________


		
        Name:  Leroy T.
Barnes, Jr.


		
       
Title:    Vice President and Treasurer


		
          


		
          


		
BNP PARIBAS, as Administrative Agent and as a Lender


		
          


		
By:  /s/  Mark A. Renaud______


		
        Name:  
Mark A. Renaud


		
       
Title:     Managing Director


		
          


		
By:  /s/  Francis J. DeLaney____


		
       Name:   Francis
J. DeLaney


		
      
Title:     Managing Director


		
          


		
          


		
DEUTSCHE BANK SECURITIES INC., as Syndication Agent


		
          


		
By:  /s/  Richard Henshall  ___


		
       Name:   Richard
Henshall


		
      
Title:     Director


		
          


		
By:  /s/  David J. Bell________


		
       Name:   David J.
Bell


		
      
Title:      Managing Director


		
          


		
ABN AMRO BANK N.V., as Documentation Agent and as a Lender


		
By:  /s/  John D.
Reed_              


		
       Name:   John D.
Reed


		
      
Title:     Director


		
          


		
By:  /s/  Todd D. Vaubel____  


		
       Name:   Todd D.
Vaubel


		
      
Title:      Assistant Vice President


		
          


		
          


		
GOLDMAN SACHS CREDIT PARTNERS L.P., as Documentation Agent and
as a Lender


		
          


		
By:   /s/ Bruce S. Mendelsohn           

       Name: Bruce S. Mendelsohn

       Title:   Authorized Signatory


		
          


		
UNION BANK OF CALIFORNIA, N.A., as Documentation Agent and as a
Lender


		
          


		
By:  /s/  Dennis G. Blank_____


		
       Name:   Dennis G.
Blank


		
      
Title:     Vice President


		
          


		
BARCLAYS BANK PLC


		
          


		
By:  /s/  Sydney G.
Dennis         


		
       Name:   Sydney G.
Dennis


		
      
Title:     Director


		
          


		
CITICORP USA, INC.


		
By:  /s/  Dhaya Ranganathan________


		
       Name:  Dhaya
Ranganathan


		
      
Title:     Director


		
          


		
DEUTSCHE BANK AG NEW YORK BRANCH


		
          


		
By:  /s/  Richard
Henshall          


		
       Name:   Richard
Henshall


		
      
Title:     Director


		
          


		
By:  /s/  David J. Bell____


		
       Name:   David J.
Bell


		
       
Title:     Managing Director


		
          


		
JPMORGAN CHASE BANK, N.A.


		
By:  /s/  Thomas Casey_______


		
        Name:  Thomas
Casey


		
       
Title:     Vice President


		
          


		
KBC BANK N.V.


		
          


		
By:  /s/  Jean-Pierre
Diels___   


		
        Name:   
Jean-Pierre Diels


		
      
Title:      First Vice President


		
          


		
By:  /s/  Eric Raskin_________


		
       Name:   Eric
Raskin


		
      
Title:     Vice President


		
          


		
LEHMAN BROTHERS BANK, FSB


		
          


		
By:  /s/  Janine M. Shugan___  


		
       Name:   Janine M.
Shugan


		
      
Title:     Authorized Signatory


		
          


		
MORGAN STANLEY BANK


		
          


		
By:  /s/  Daniel Twenge __


		
       Name:   Daniel
Twenge


		
      
Title:     Vice President


		
          


		
ROYAL BANK OF CANADA


		
		
  By:  /s/  Linda M. Stephens__


		
        
Name:   Linda M. Stephens


		
        
Title:     Authorized Signatory


		
          


		
THE BANK OF NEW YORK


		
          


		
By:  /s/  Jesus Williams______


		
       Name:   Jesus
Williams


		
       Title:
     Vice President


		
          


		
THE BANK OF NOVA SCOTIA


		
          


		
By:  /s/  Thane Rattew  
__________


	
 

	
       Name:   Thane
Rattew


		
      
Title:      Managing Director