| 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 operationstargets. |
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| 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. |
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| 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. |
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| 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. |
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| 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. |
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|  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. |
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