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| UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C., 20549FORM 10-Q                                                                                                                                                                                                                                                                                                                                            |
| (Mark One)                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
| [X]                                                                                                                                                                                                                                                                                                                                                                                                                         | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934 |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |
| For the quarterly period ended June 30, 2009 OR                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
| [  ]                                                                                                                                                                                                                                                                                                                                                                                                              | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934 |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
| For the transition period from ___________ to __________                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|  CommissionFileNumber_______________                                                                                                                                                                                                                                                                                                                                                                                   | Exact Name ofRegistrantas specifiedin its charter_______________ |  State or otherJurisdiction ofIncorporation______________ |  IRS EmployerIdentificationNumber___________ |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |
| 1-12609                                                                                                                                                                                                                                                                                                                                                                                                                     | PG&E Corporation | California | 94-3234914 |
| 1-2348                                                                                                                                                                                                                                                                                                                                                                                                                      | Pacific Gas and Electric Company | California | 94-0742640 |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Pacific Gas and Electric Company77 Beale StreetP.O. Box 770000San Francisco, California 94177________________________________________                                                                                                                                                                                                                                                                                       | PG&E CorporationOne Market, Spear TowerSuite 2400San Francisco, California 94105______________________________________ |
| Address of principal executive offices, including zip code                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Pacific Gas and Electric Company(415) 973-7000________________________________________                                                                                                                                                                                                                                                                                                                                      | PG&E Corporation(415) 267-7000______________________________________ |
| Registrant's telephone number, including area code                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Indicate by check mark whether each registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 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 90days.  [X] Yes     [  ] No |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).[X] Yes     [  ] No           |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |
| PG&E Corporation:                                                                                                                                                                                                                                                                                                                                                                                                       | [X] Large accelerated filer | [  ] Accelerated Filer |
|                                                                                                                                                                                                                                                                                                                                                                                                                        | [  ] Non-accelerated filer | [  ] Smaller reporting company |
| Pacific Gas and Electric Company:                                                                                                                                                                                                                                                                                                                                                                                           | [  ] Large accelerated filer | [  ] Accelerated Filer |
|                                                                                                                                                                                                                                                                                                                                                                                                                        | [X] Non-accelerated filer | [  ] Smaller reporting company |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).                                                                                                                                                                                                                                                                                                            |
| PG&E Corporation:                                                                                                                                                                                                                                                                                                                                                                                                       | [  ] Yes [X] No |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
| Pacific Gas and Electric Company:                                                                                                                                                                                                                                                                                                                                                                                           | [  ] Yes [X] No |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
| Common Stock Outstanding as of July 31, 2009:                                                                                                                                                                                                                                                                                                                                                                               |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
| PG&E Corporation                                                                                                                                                                                                                                                                                                                                                                                                        | 370,687,258 |
| Pacific Gas and Electric Company                                                                                                                                                                                                                                                                                                                                                                                            | 264,374,809 |
|                                                                                                                                                                                                                                                                                                                                                                                                                        |   |

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| PART I.  | FINANCIAL INFORMATION                                                                | PAGE                                                   |
|----------|--------------------------------------------------------------------------------------|--------------------------------------------------------|
| ITEM 1.  | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                                          |                                                   |
|     | PG&E Corporation                                                                 |                                                   |
|     |                                                                                 | Condensed Consolidated Statements of Income            | 3 |
|     |                                                                                 | Condensed Consolidated Balance Sheets                  | 4 |
|     |                                                                                 | Condensed Consolidated Statements of Cash Flows        | 6 |
|     | Pacific Gas and Electric Company                                                     |                                                   |
|     |                                                                                 | Condensed Consolidated Statements of Income            | 8 |
|     |                                                                                 | Condensed Consolidated Balance Sheets                  | 9 |
|     |                                                                                 | Condensed Consolidated Statements of Cash Flows        | 11 |
|     | NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                             |                                                   |
|     | NOTE 1:                                                                              | Organization and Basis of Presentation                 | 13 |
|     | NOTE 2:                                                                              | New and Significant Accounting Policies                | 13 |
|     | NOTE 3:                                                                              | Regulatory Assets, Liabilities, and Balancing Accounts | 18 |
|     | NOTE 4:                                                                              | Debt                                                   | 21 |
|     | NOTE 5:                                                                              | Equity                                                 | 22 |
|     | NOTE 6:                                                                              | Earnings Per Share                                     | 23 |
|     | NOTE 7:                                                                              | Derivatives and Hedging Activities                     | 24 |
|     | NOTE 8:                                                                              | Fair Value Measurements                                | 27 |
|     | NOTE 9:                                                                              | Related Party Agreements and Transactions              | 30 |
|     | NOTE 10:                                                                             | Resolution of Remaining Chapter 11 Disputed Claims     | 31 |
|     | NOTE 11:                                                                             | Commitments and Contingencies                          | 31 |
|     |
| ITEM 2.  | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS |                                                   |
|     | Overview                                                                             | 38                                                     |
|     | Forward-Looking Statements                                                           | 40                                                     |
|     | Results of Operations                                                                | 42                                                     |
|     | Liquidity and Financial Resources                                                    | 47                                                     |
|     | Contractual Commitments                                                              | 50                                                     |
|     | Capital Expenditures                                                                 | 51                                                     |
|     | Off-Balance Sheet Arrangements                                                       | 52                                                     |
|     | Contingencies                                                                        | 52                                                     |
|     | Regulatory Matters                                                                   | 52                                                     |
|     | Risk Management Activities                                                           | 54                                                     |
|     | Critical Accounting Policies                                                         | 55                                                     |
|     | New Accounting Policies                                                              | 55                                                     |
|     | Accounting Pronouncements Issued But Not Yet Adopted                                 | 57                                                     |
|     |
| ITEM 3.  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           | 58                                                     |
| ITEM 4.  | CONTROLS AND PROCEDURES                                                              | 58                                                     |
|     |
| PART II. | OTHER INFORMATION                                                                    |                                                   |
| ITEM 1.  | LEGAL PROCEEDINGS                                                                    | 59                                                     |
| ITEM 1A. | RISK FACTORS                                                                         | 59                                                     |
| ITEM 2.  | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                          | 59                                                     |
| ITEM 4.  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  | 60                                                     |
| ITEM 5.  | OTHER INFORMATION                                                                    | 62                                                     |
| ITEM 6.  | EXHIBITS                                                                             | 63                                                     |

----

ITEM 1: CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

| PG&E CORPORATION                                                       |   |
|----------------------------------------------------------------------------|--------|
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME                                |   |
|                                                                       |   | (Unaudited) |   |
|                                                                       |   | Three Months Ended |   |   | Six Months Ended |   |
|                                                                       |   | June 30, |   |   | June 30, |   |
| (in millions, except per share amounts)                                    |   | 2009 |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
| Operating Revenues                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Electric                                                                   |   | $ | 2,554 |   |   | $ | 2,645 |   |   | $ | 4,980 |   |   | $ | 5,159 |   |
| Natural gas                                                                |   |   | 640 |   |   |   | 933 |   |   |   | 1,645 |   |   |   | 2,152 |   |
| Total operating revenues                                                   |   |   | 3,194 |   |   |   | 3,578 |   |   |   | 6,625 |   |   |   | 7,311 |   |
| Operating Expenses                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of electricity                                                        |   |   | 883 |   |   |   | 1,097 |   |   |   | 1,766 |   |   |   | 2,124 |   |
| Cost of natural gas                                                        |   |   | 188 |   |   |   | 487 |   |   |   | 745 |   |   |   | 1,262 |   |
| Operating and maintenance                                                  |   |   | 1,038 |   |   |   | 991 |   |   |   | 2,097 |   |   |   | 2,027 |   |
| Depreciation, amortization, and decommissioning                            |   |   | 429 |   |   |   | 419 |   |   |   | 848 |   |   |   | 821 |   |
| Total operating expenses                                                   |   |   | 2,538 |   |   |   | 2,994 |   |   |   | 5,456 |   |   |   | 6,234 |   |
| Operating Income                                                           |   |   | 656 |   |   |   | 584 |   |   |   | 1,169 |   |   |   | 1,077 |   |
| Interest income                                                            |   |   | 17 |   |   |   | 33 |   |   |   | 26 |   |   |   | 59 |   |
| Interest expense                                                           |   |   | (178 | ) |   |   | (185 | ) |   |   | (359 | ) |   |   | (372 | ) |
| Other income, net                                                          |   |   | 22 |   |   |   | 5 |   |   |   | 40 |   |   |   | 10 |   |
| Income Before Income Taxes                                                 |   |   | 517 |   |   |   | 437 |   |   |   | 876 |   |   |   | 774 |   |
| Income tax provision                                                       |   |   | 125 |   |   |   | 140 |   |   |   | 240 |   |   |   | 250 |   |
| Net Income                                                                 |   |   | 392 |   |   |   | 297 |   |   |   | 636 |   |   |   | 524 |   |
| Preferred stock dividend requirement of subsidiary                         |   |   | 4 |   |   |   | 4 |   |   |   | 7 |   |   |   | 7 |   |
| Income Available for Common Shareholders                                   |   | $ | 388 |   |   | $ | 293 |   |   | $ | 629 |   |   | $ | 517 |   |
| Weighted Average Common Shares Outstanding, Basic                          |   |   | 368 |   |   |   | 356 |   |   |   | 366 |   |   |   | 355 |   |
| Weighted Average Common Shares Outstanding, Diluted                        |   |   | 369 |   |   |   | 357 |   |   |   | 367 |   |   |   | 356 |   |
| Net Earnings Per Common Share, Basic                                       |   | $ | 1.03 |   |   | $ | 0.80 |   |   | $ | 1.68 |   |   | $ | 1.42 |   |
| Net Earnings Per Common Share, Diluted                                     |   | $ | 1.02 |   |   | $ | 0.80 |   |   | $ | 1.67 |   |   | $ | 1.42 |   |
| Dividends Declared Per Common Share                                        |   | $ | 0.42 |   |   | $ | 0.39 |   |   | $ | 0.84 |   |   | $ | 0.78 |   |
|                                                                       |   |
| See accompanying Notes to the Condensed Consolidated Financial Statements. |   |

----

PG&E CORPORATION

|                                                                                              |   | (Unaudited)   |    |
|---------------------------------------------------------------------------------------------------|--------|---------------|---------|
|                                                                                              |   | Balance At    |    |
| (in millions)                                                                                     |   | June 30, 2009 |    |   | December 31, 2008 |   |
| ASSETS                                                                                            |   |          |    |   |   |   |
| Current Assets                                                                                    |   |          |    |   |   |   |
| Cash and cash equivalents                                                                         |   | $             | 338     |   |   | $ | 219 |   |
| Restricted cash                                                                                   |   |          | 1,285   |   |   |   | 1,290 |   |
| Accounts receivable:                                                                              |   |          |    |   |   |   |   |   |
| Customers (net of allowance for doubtful accounts of $77 million in 2009 and $76 million in 2008) |   |          | 1,481   |   |   |   | 1,751 |   |
| Accrued unbilled revenue                                                                          |   |          | 757     |   |   |   | 685 |   |
| Regulatory balancing accounts                                                                     |   |          | 1,304   |   |   |   | 1,197 |   |
| Inventories:                                                                                      |   |          |    |   |   |   |   |   |
| Gas stored underground and fuel oil                                                               |   |          | 107     |   |   |   | 232 |   |
| Materials and supplies                                                                            |   |          | 204     |   |   |   | 191 |   |
| Income taxes receivable                                                                           |   |          | 171     |   |   |   | 120 |   |
| Prepaid expenses and other                                                                        |   |          | 781     |   |   |   | 718 |   |
| Total current assets                                                                              |   |          | 6,428   |   |   |   | 6,403 |   |
| Property, Plant, and Equipment                                                                    |   |          |    |   |   |   |   |   |
| Electric                                                                                          |   |          | 29,580  |   |   |   | 27,638 |   |
| Gas                                                                                               |   |          | 10,387  |   |   |   | 10,155 |   |
| Construction work in progress                                                                     |   |          | 1,523   |   |   |   | 2,023 |   |
| Other                                                                                             |   |          | 13      |   |   |   | 17 |   |
| Total property, plant, and equipment                                                              |   |          | 41,503  |   |   |   | 39,833 |   |
| Accumulated depreciation                                                                          |   |          | (13,904 | ) |   |   | (13,572 | ) |
| Net property, plant, and equipment                                                                |   |          | 27,599  |   |   |   | 26,261 |   |
| Other Noncurrent Assets                                                                           |   |          |    |   |   |   |   |   |
| Regulatory assets                                                                                 |   |          | 5,969   |   |   |   | 5,996 |   |
| Nuclear decommissioning funds                                                                     |   |          | 1,740   |   |   |   | 1,718 |   |
| Other                                                                                             |   |          | 461     |   |   |   | 482 |   |
| Total other noncurrent assets                                                                     |   |          | 8,170   |   |   |   | 8,196 |   |
| TOTAL ASSETS                                                                                      |   | $             | 42,197  |   |   | $ | 40,860 |   |

----

|                                                                                                                                                                                             |   | (Unaudited)   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|
|                                                                                                                                                                                             |   | Balance At    |   |
|  (in millions, except share amounts)                                                                                                                                                        |   | June 30, 2009 |   |   | December 31, 2008 |   |
| LIABILITIES AND EQUITY                                                                                                                                                                           |   |          |   |   |   |   |
| Current Liabilities                                                                                                                                                                              |   |          |   |   |   |   |
| Short-term borrowings                                                                                                                                                                            |   | $             | 743    |   |   | $ | 287 |   |
| Long-term debt, classified as current                                                                                                                                                            |   |          | 252    |   |   |   | 600 |   |
| Energy recovery bonds, classified as current                                                                                                                                                     |   |          | 378    |   |   |   | 370 |   |
| Accounts payable:                                                                                                                                                                                |   |          |   |   |   |   |   |   |
| Trade creditors                                                                                                                                                                                  |   |          | 863    |   |   |   | 1,096 |   |
| Disputed claims and customer refunds                                                                                                                                                             |   |          | 1,552  |   |   |   | 1,580 |   |
| Regulatory balancing accounts                                                                                                                                                                    |   |          | 611    |   |   |   | 730 |   |
| Other                                                                                                                                                                                            |   |          | 367    |   |   |   | 343 |   |
| Interest payable                                                                                                                                                                                 |   |          | 842    |   |   |   | 802 |   |
| Deferred income taxes                                                                                                                                                                            |   |          | 424    |   |   |   | 251 |   |
| Other                                                                                                                                                                                            |   |          | 1,400  |   |   |   | 1,567 |   |
| Total current liabilities                                                                                                                                                                        |   |          | 7,432  |   |   |   | 7,626 |   |
| Noncurrent Liabilities                                                                                                                                                                           |   |          |   |   |   |   |   |   |
| Long-term debt                                                                                                                                                                                   |   |          | 9,933  |   |   |   | 9,321 |   |
| Energy recovery bonds                                                                                                                                                                            |   |          | 1,031  |   |   |   | 1,213 |   |
| Regulatory liabilities                                                                                                                                                                           |   |          | 3,838  |   |   |   | 3,657 |   |
| Pension and other postretirement benefits                                                                                                                                                        |   |          | 2,177  |   |   |   | 2,088 |   |
| Asset retirement obligations                                                                                                                                                                     |   |          | 1,539  |   |   |   | 1,684 |   |
| Income taxes payable                                                                                                                                                                             |   |          | 9      |   |   |   | 35 |   |
| Deferred income taxes                                                                                                                                                                            |   |          | 3,816  |   |   |   | 3,397 |   |
| Deferred tax credits                                                                                                                                                                             |   |          | 91     |   |   |   | 94 |   |
| Other                                                                                                                                                                                            |   |          | 2,133  |   |   |   | 2,116 |   |
| Total noncurrent liabilities                                                                                                                                                                     |   |          | 24,567 |   |   |   | 23,605 |   |
| Commitments and Contingencies                                                                                                                                                                    |   |          |   |   |   |   |   |   |
| Equity                                                                                                                                                                                           |   |          |   |   |   |   |   |   |
| Shareholders’ Equity                                                                                                                                                                       |   |          |   |   |   |   |   |   |
| Preferred stock, no par value, authorized 80,000,000 shares, $100 par value, authorized 5,000,000 shares, none issued                                                                            |   |          | -      |   |   |   | - |   |
| Common stock, no par value, authorized 800,000,000 shares, issued 368,841,539 common and 673,491 restricted shares in 2009 and issued 361,059,116 common and 1,287,569 restricted shares in 2008 |   |          | 6,219  |   |   |   | 5,984 |   |
| Reinvested earnings                                                                                                                                                                              |   |          | 3,934  |   |   |   | 3,614 |   |
| Accumulated other comprehensive loss                                                                                                                                                             |   |          | (207   | ) |   |   | (221 | ) |
| Total shareholders’ equity                                                                                                                                                                 |   |          | 9,946  |   |   |   | 9,377 |   |
| Noncontrolling Interest – Preferred Stock of Subsidiary                                                                                                                                    |   |          | 252    |   |   |   | 252 |   |
| Total equity                                                                                                                                                                                     |   |          | 10,198 |   |   |   | 9,629 |   |
| TOTAL LIABILITIES AND EQUITY                                                                                                                                                                     |   | $             | 42,197 |   |   | $ | 40,860 |   |

----

| PG&E CORPORATION                                                                                                                 |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                      |   |
|                                                                                                                                 |   | (Unaudited) |   |
|                                                                                                                                 |   | Six Months Ended |   |
|                                                                                                                                 |   | June 30, |   |
| (in millions)                                                                                                                        |   | 2009 |   |   | 2008 |   |
| Cash Flows from Operating Activities                                                                                                 |   |   |   |   |   |   |
| Net income                                                                                                                           |   | $ | 636 |   |   | $ | 524 |   |
| Adjustments to reconcile net income to net cash provided by operating activities:                                                    |   |   |   |   |   |   |   |   |
| Depreciation, amortization, and decommissioning                                                                                      |   |   | 944 |   |   |   | 902 |   |
| Allowance for equity funds used during construction                                                                                  |   |   | (47 | ) |   |   | (32 | ) |
| Deferred income taxes and tax credits, net                                                                                           |   |   | 377 |   |   |   | 346 |   |
| Other changes in noncurrent assets and liabilities                                                                                   |   |   | (46 | ) |   |   | 493 |   |
| Effect of changes in operating assets and liabilities:                                                                               |   |   |   |   |   |   |   |   |
| Accounts receivable                                                                                                                  |   |   | 198 |   |   |   | (68 | ) |
| Inventories                                                                                                                          |   |   | 113 |   |   |   | (57 | ) |
| Accounts payable                                                                                                                     |   |   | (143 | ) |   |   | 121 |   |
| Income taxes receivable/payable                                                                                                      |   |   | 161 |   |   |   | 21 |   |
| Regulatory balancing accounts, net                                                                                                   |   |   | (228 | ) |   |   | (351 | ) |
| Other current assets                                                                                                                 |   |   | 10 |   |   |   | 431 |   |
| Other current liabilities                                                                                                            |   |   | (224 | ) |   |   | (79 | ) |
| Other                                                                                                                                |   |   | 3 |   |   |   | (3 | ) |
| Net cash provided by operating activities                                                                                            |   |   | 1,754 |   |   |   | 2,248 |   |
| Cash Flows from Investing Activities                                                                                                 |   |   |   |   |   |   |   |   |
| Capital expenditures                                                                                                                 |   |   | (2,077 | ) |   |   | (1,712 | ) |
| Proceeds from sale of assets                                                                                                         |   |   | 5 |   |   |   | 12 |   |
| Decrease (increase) in restricted cash                                                                                               |   |   | 15 |   |   |   | (7 | ) |
| Proceeds from nuclear decommissioning trust sales                                                                                    |   |   | 954 |   |   |   | 636 |   |
| Purchases of nuclear decommissioning trust investments                                                                               |   |   | (985 | ) |   |   | (665 | ) |
| Other                                                                                                                                |   |   | 7 |   |   |   | - |   |
| Net cash used in investing activities                                                                                                |   |   | (2,081 | ) |   |   | (1,736 | ) |
| Cash Flows from Financing Activities                                                                                                 |   |   |   |   |   |   |   |   |
| Net repayments under revolving credit facility                                                                                       |   |   | - |   |   |   | (250 | ) |
| Net repayments of commercial paper, net of discount of $3 million in 2009 and $2 million in 2008                                     |   |   | (47 | ) |   |   | (114 | ) |
| Proceeds from issuance of short-term debt, net of issuance costs of $1 million in 2009                                               |   |   | 499 |   |   |   | - |   |
| Proceeds from issuance of long-term debt, net of premium, discount, and issuance costs of $16 million in 2009 and $2 million in 2008 |   |   | 884 |   |   |   | 598 |   |
| Long-term debt matured or repurchased                                                                                                |   |   | (600 | ) |   |   | (454 | ) |
| Energy recovery bonds matured                                                                                                        |   |   | (174 | ) |   |   | (165 | ) |
| Common stock issued                                                                                                                  |   |   | 182 |   |   |   | 82 |   |
| Common stock dividends paid                                                                                                          |   |   | (286 | ) |   |   | (267 | ) |
| Other                                                                                                                                |   |   | (12 | ) |   |   | 10 |   |
| Net cash provided by (used in) financing activities                                                                                  |   |   | 446 |   |   |   | (560 | ) |
| Net change in cash and cash equivalents                                                                                              |   |   | 119 |   |   |   | (48 | ) |
| Cash and cash equivalents at January 1                                                                                               |   |   | 219 |   |   |   | 345 |   |
| Cash and cash equivalents at June 30                                                                                                 |   | $ | 338 |   |   | $ | 297 |   |

----

| Supplemental disclosures of cash flow information                          |   |   |   |   |   |   |
|----------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Cash received (paid) for:                                                  |   |   |   |   |   |   |
| Interest, net of amounts capitalized                                       |   | $      | (298   | )      |   | $      | (260 | ) |
| Income taxes, net                                                          |   |   | 201    |   |   |   | 60 |   |
| Supplemental disclosures of noncash investing and financing activities     |   |   |   |   |   |   |   |   |
| Common stock dividends declared but not yet paid                           |   | $      | 155    |   |   | $      | 140 |   |
| Capital expenditures financed through accounts payable                     |   |   | 245    |   |   |   | 180 |   |
| Noncash common stock issuances                                             |   |   | 39     |   |   |   | 6 |   |
|                                                                       |   |   |   |   |   |   |   |   |
| See accompanying Notes to the Condensed Consolidated Financial Statements. |   |

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| PACIFIC GAS AND ELECTRIC COMPANY                                           |   |
|----------------------------------------------------------------------------|--------|
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME                                |   |
|                                                                       |   | (Unaudited) |   |
|                                                                       |   | Three Months Ended |   |   | Six Months Ended |   |
|                                                                       |   | June 30, |   |   | June 30, |   |
| (in millions)                                                              |   | 2009 |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
| Operating Revenues                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Electric                                                                   |   | $ | 2,554 |   |   | $ | 2,645 |   |   | $ | 4,980 |   |   | $ | 5,159 |   |
| Natural gas                                                                |   |   | 640 |   |   |   | 933 |   |   |   | 1,645 |   |   |   | 2,152 |   |
| Total operating revenues                                                   |   |   | 3,194 |   |   |   | 3,578 |   |   |   | 6,625 |   |   |   | 7,311 |   |
| Operating Expenses                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of electricity                                                        |   |   | 883 |   |   |   | 1,097 |   |   |   | 1,766 |   |   |   | 2,124 |   |
| Cost of natural gas                                                        |   |   | 188 |   |   |   | 487 |   |   |   | 745 |   |   |   | 1,262 |   |
| Operating and maintenance                                                  |   |   | 1,037 |   |   |   | 991 |   |   |   | 2,096 |   |   |   | 2,027 |   |
| Depreciation, amortization, and decommissioning                            |   |   | 429 |   |   |   | 418 |   |   |   | 848 |   |   |   | 820 |   |
| Total operating expenses                                                   |   |   | 2,537 |   |   |   | 2,993 |   |   |   | 5,455 |   |   |   | 6,233 |   |
| Operating Income                                                           |   |   | 657 |   |   |   | 585 |   |   |   | 1,170 |   |   |   | 1,078 |   |
| Interest income                                                            |   |   | 17 |   |   |   | 33 |   |   |   | 26 |   |   |   | 57 |   |
| Interest expense                                                           |   |   | (166 | ) |   |   | (178 | ) |   |   | (339 | ) |   |   | (358 | ) |
| Other income, net                                                          |   |   | 15 |   |   |   | 7 |   |   |   | 36 |   |   |   | 26 |   |
| Income Before Income Taxes                                                 |   |   | 523 |   |   |   | 447 |   |   |   | 893 |   |   |   | 803 |   |
| Income tax provision                                                       |   |   | 132 |   |   |   | 134 |   |   |   | 263 |   |   |   | 254 |   |
| Net Income                                                                 |   |   | 391 |   |   |   | 313 |   |   |   | 630 |   |   |   | 549 |   |
| Preferred stock dividend requirement                                       |   |   | 4 |   |   |   | 4 |   |   |   | 7 |   |   |   | 7 |   |
| Income Available for Common Stock                                          |   | $ | 387 |   |   | $ | 309 |   |   | $ | 623 |   |   | $ | 542 |   |
|                                                                       |   |
| See accompanying Notes to the Condensed Consolidated Financial Statements. |   |

----

PACIFIC GAS AND ELECTRIC COMPANY

|                                                                                              |   | (Unaudited)   |    |
|---------------------------------------------------------------------------------------------------|--------|---------------|---------|
|                                                                                              |   | Balance At    |    |
|  (in millions)                                                                               |   | June 30, 2009 |    |   | December 31, 2008 |   |
| ASSETS                                                                                            |   |          |    |   |   |   |
| Current Assets                                                                                    |   |          |    |   |   |   |
| Cash and cash equivalents                                                                         |   | $             | 158     |   |   | $ | 52 |   |
| Restricted cash                                                                                   |   |          | 1,285   |   |   |   | 1,290 |   |
| Accounts receivable:                                                                              |   |          |    |   |   |   |   |   |
| Customers (net of allowance for doubtful accounts of $77 million in 2009 and $76 million in 2008) |   |          | 1,481   |   |   |   | 1,751 |   |
| Accrued unbilled revenue                                                                          |   |          | 757     |   |   |   | 685 |   |
| Related parties                                                                                   |   |          | 1       |   |   |   | 2 |   |
| Regulatory balancing accounts                                                                     |   |          | 1,304   |   |   |   | 1,197 |   |
| Inventories:                                                                                      |   |          |    |   |   |   |   |   |
| Gas stored underground and fuel oil                                                               |   |          | 107     |   |   |   | 232 |   |
| Materials and supplies                                                                            |   |          | 204     |   |   |   | 191 |   |
| Income taxes receivable                                                                           |   |          | 120     |   |   |   | 25 |   |
| Prepaid expenses and other                                                                        |   |          | 775     |   |   |   | 705 |   |
| Total current assets                                                                              |   |          | 6,192   |   |   |   | 6,130 |   |
| Property, Plant, and Equipment                                                                    |   |          |    |   |   |   |   |   |
| Electric                                                                                          |   |          | 29,580  |   |   |   | 27,638 |   |
| Gas                                                                                               |   |          | 10,387  |   |   |   | 10,155 |   |
| Construction work in progress                                                                     |   |          | 1,523   |   |   |   | 2,023 |   |
| Total property, plant, and equipment                                                              |   |          | 41,490  |   |   |   | 39,816 |   |
| Accumulated depreciation                                                                          |   |          | (13,893 | ) |   |   | (13,557 | ) |
| Net property, plant, and equipment                                                                |   |          | 27,597  |   |   |   | 26,259 |   |
| Other Noncurrent Assets                                                                           |   |          |    |   |   |   |   |   |
| Regulatory assets                                                                                 |   |          | 5,969   |   |   |   | 5,996 |   |
| Nuclear decommissioning funds                                                                     |   |          | 1,740   |   |   |   | 1,718 |   |
| Related parties receivable                                                                        |   |          | 26      |   |   |   | 27 |   |
| Income taxes receivable                                                                           |   |          | 18      |   |   |   | - |   |
| Other                                                                                             |   |          | 382     |   |   |   | 407 |   |
| Total other noncurrent assets                                                                     |   |          | 8,135   |   |   |   | 8,148 |   |
| TOTAL ASSETS                                                                                      |   | $             | 41,924  |   |   | $ | 40,537 |   |

----

|                                                                                                  |   | (Unaudited)   |   |
|-------------------------------------------------------------------------------------------------------|--------|---------------|--------|
|                                                                                                  |   | Balance At    |   |
| (in millions, except share amounts)                                                                   |   | June 30, 2009 |   |   | December 31, 2008 |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                                            |   |          |   |   |   |   |
| Current Liabilities                                                                                   |   |          |   |   |   |   |
| Short-term borrowings                                                                                 |   | $             | 743    |   |   | $ | 287 |   |
| Long-term debt, classified as current                                                                 |   |          | -      |   |   |   | 600 |   |
| Energy recovery bonds, classified as current                                                          |   |          | 378    |   |   |   | 370 |   |
| Accounts payable:                                                                                     |   |          |   |   |   |   |   |   |
| Trade creditors                                                                                       |   |          | 863    |   |   |   | 1,096 |   |
| Disputed claims and customer refunds                                                                  |   |          | 1,552  |   |   |   | 1,580 |   |
| Related parties                                                                                       |   |          | 11     |   |   |   | 25 |   |
| Regulatory balancing accounts                                                                         |   |          | 611    |   |   |   | 730 |   |
| Other                                                                                                 |   |          | 366    |   |   |   | 325 |   |
| Interest payable                                                                                      |   |          | 836    |   |   |   | 802 |   |
| Income tax payable                                                                                    |   |          | -      |   |   |   | 53 |   |
| Deferred income taxes                                                                                 |   |          | 430    |   |   |   | 257 |   |
| Other                                                                                                 |   |          | 1,201  |   |   |   | 1,371 |   |
| Total current liabilities                                                                             |   |          | 6,991  |   |   |   | 7,496 |   |
| Noncurrent Liabilities                                                                                |   |          |   |   |   |   |   |   |
| Long-term debt                                                                                        |   |          | 9,585  |   |   |   | 9,041 |   |
| Energy recovery bonds                                                                                 |   |          | 1,031  |   |   |   | 1,213 |   |
| Regulatory liabilities                                                                                |   |          | 3,838  |   |   |   | 3,657 |   |
| Pension and other postretirement benefits                                                             |   |          | 2,127  |   |   |   | 2,040 |   |
| Asset retirement obligations                                                                          |   |          | 1,539  |   |   |   | 1,684 |   |
| Income taxes payable                                                                                  |   |          | 3      |   |   |   | 12 |   |
| Deferred income taxes                                                                                 |   |          | 3,859  |   |   |   | 3,449 |   |
| Deferred tax credits                                                                                  |   |          | 91     |   |   |   | 94 |   |
| Other                                                                                                 |   |          | 2,093  |   |   |   | 2,064 |   |
| Total noncurrent liabilities                                                                          |   |          | 24,166 |   |   |   | 23,254 |   |
| Commitments and Contingencies                                                                         |   |          |   |   |   |   |   |   |
| Shareholders’ Equity                                                                            |   |          |   |   |   |   |   |   |
| Preferred stock without mandatory redemption provisions:                                              |   |          |   |   |   |   |   |   |
| Nonredeemable, 5.00% to 6.00%, outstanding 5,784,825 shares                                           |   |          | 145    |   |   |   | 145 |   |
| Redeemable, 4.36% to 5.00%, outstanding 4,534,958 shares                                              |   |          | 113    |   |   |   | 113 |   |
| Common stock, $5 par value, authorized 800,000,000 shares, issued 264,374,809 shares in 2009 and 2008 |   |          | 1,322  |   |   |   | 1,322 |   |
| Additional paid-in capital                                                                            |   |          | 2,986  |   |   |   | 2,331 |   |
| Reinvested earnings                                                                                   |   |          | 6,403  |   |   |   | 6,092 |   |
| Accumulated other comprehensive loss                                                                  |   |          | (202   | ) |   |   | (216 | ) |
| Total shareholders’ equity                                                                      |   |          | 10,767 |   |   |   | 9,787 |   |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY                                                      |   | $             | 41,924 |   |   | $ | 40,537 |   |

----

| PACIFIC GAS AND ELECTRIC COMPANY                                                                                                     |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                      |   |
|                                                                                                                                 |   | (Unaudited) |   |
|                                                                                                                                 |   | Six Months Ended |   |
|                                                                                                                                 |   | June 30, |   |
| (in millions)                                                                                                                        |   | 2009 |   |   | 2008 |   |
| Cash Flows from Operating Activities                                                                                                 |   |   |   |   |   |   |
| Net income                                                                                                                           |   | $ | 630 |   |   | $ | 549 |   |
| Adjustments to reconcile net income to net cash provided by operating activities:                                                    |   |   |   |   |   |   |   |   |
| Depreciation, amortization, and decommissioning                                                                                      |   |   | 932 |   |   |   | 902 |   |
| Allowance for equity funds used during construction                                                                                  |   |   | (47 | ) |   |   | (32 | ) |
| Deferred income taxes and tax credits, net                                                                                           |   |   | 368 |   |   |   | 316 |   |
| Other changes in noncurrent assets and liabilities                                                                                   |   |   | (34 | ) |   |   | 480 |   |
| Effect of changes in operating assets and liabilities:                                                                               |   |   |   |   |   |   |   |   |
| Accounts receivable                                                                                                                  |   |   | 199 |   |   |   | (66 | ) |
| Inventories                                                                                                                          |   |   | 113 |   |   |   | (57 | ) |
| Accounts payable                                                                                                                     |   |   | (140 | ) |   |   | 123 |   |
| Income taxes receivable/payable                                                                                                      |   |   | 64 |   |   |   | 57 |   |
| Regulatory balancing accounts, net                                                                                                   |   |   | (228 | ) |   |   | (351 | ) |
| Other current assets                                                                                                                 |   |   | 10 |   |   |   | 429 |   |
| Other current liabilities                                                                                                            |   |   | (220 | ) |   |   | (73 | ) |
| Other                                                                                                                                |   |   | 3 |   |   |   | (3 | ) |
| Net cash provided by operating activities                                                                                            |   |   | 1,650 |   |   |   | 2,274 |   |
| Cash Flows from Investing Activities                                                                                                 |   |   |   |   |   |   |   |   |
| Capital expenditures                                                                                                                 |   |   | (2,077 | ) |   |   | (1,712 | ) |
| Proceeds from sale of assets                                                                                                         |   |   | 5 |   |   |   | 12 |   |
| Decrease (increase) in restricted cash                                                                                               |   |   | 15 |   |   |   | (7 | ) |
| Proceeds from nuclear decommissioning trust sales                                                                                    |   |   | 954 |   |   |   | 636 |   |
| Purchases of nuclear decommissioning trust investments                                                                               |   |   | (985 | ) |   |   | (665 | ) |
| Net cash used in investing activities                                                                                                |   |   | (2,088 | ) |   |   | (1,736 | ) |
| Cash Flows from Financing Activities                                                                                                 |   |   |   |   |   |   |   |   |
| Net repayments under revolving credit facility                                                                                       |   |   | - |   |   |   | (250 | ) |
| Net repayments of commercial paper, net of discount of $3 million in 2009 and $2 million in 2008                                     |   |   | (47 | ) |   |   | (114 | ) |
| Proceeds from issuance of short-term debt, net of issuance costs of $1 million in 2009                                               |   |   | 499 |   |   |   | - |   |
| Proceeds from issuance of long-term debt, net of premium, discount, and issuance costs of $12 million in 2009 and $2 million in 2008 |   |   | 538 |   |   |   | 598 |   |
| Long-term debt matured or repurchased                                                                                                |   |   | (600 | ) |   |   | (454 | ) |
| Energy recovery bonds matured                                                                                                        |   |   | (174 | ) |   |   | (165 | ) |
| Preferred stock dividends paid                                                                                                       |   |   | (7 | ) |   |   | (7 | ) |
| Common stock dividends paid                                                                                                          |   |   | (312 | ) |   |   | (284 | ) |
| Equity contribution                                                                                                                  |   |   | 653 |   |   |   | 50 |   |
| Other                                                                                                                                |   |   | (6 | ) |   |   | 16 |   |
| Net cash provided by (used in) financing activities                                                                                  |   |   | 544 |   |   |   | (610 | ) |
| Net change in cash and cash equivalents                                                                                              |   |   | 106 |   |   |   | (72 | ) |
| Cash and cash equivalents at January 1                                                                                               |   |   | 52 |   |   |   | 141 |   |
| Cash and cash equivalents at June 30                                                                                                 |   | $ | 158 |   |   | $ | 69 |   |

----

| Supplemental disclosures of cash flow information                          |   |   |   |   |   |   |
|----------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Cash received (paid) for:                                                  |   |   |   |   |   |   |
| Interest, net of amounts capitalized                                       |   | $      | (286   | )      |   | $      | (246 | ) |
| Income taxes, net                                                          |   |   | 70     |   |   |   | 60 |   |
| Supplemental disclosures of noncash investing and financing activities     |   |   |   |   |   |   |   |   |
| Capital expenditures financed through accounts payable                     |   | $      | 245    |   |   | $      | 180 |   |
|                                                                       |   |   |   |   |   |   |   |   |
| See accompanying Notes to the Condensed Consolidated Financial Statements. |   |

----

NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION

NOTE 2: NEW AND SIGNIFICANT ACCOUNTING POLICIES

| ·   | a 25-year power purchase agreement approved by the CPUC in 2009 to purchase energy from a 250-megawatt (“MW”) solar photovoltaic energy facility beginning upon the date of commercial operations (expected in 2012); |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a 20-year power purchase agreement approved by the CPUC in 2009 to purchase energy from a 550-MW solar photovoltaic energy facility beginning upon the date of commercial operations (expected in 2013); and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a 25-year power purchase agreement approved by the CPUC in 2008 to purchase energy from a 554-MW solar trough facility beginning upon the date of commercial operations (expected in 2011). |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  (in millions)                |   |   |   |
|------------------------------------|--------|--------|--------|
| ARO liability at December 31, 2008 |   | $      | 1,684  |   |
| Revision in estimated cash flows   |   |   | (172   | )  |
| Accretion                          |   |   | 49     |   |
| Liabilities settled                |   |   | (22    | )  |
| ARO liability at June 30, 2009     |   | $      | 1,539  |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | PG&E Corporation       |   |   | Utility                    |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|--------|--------|----------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | Three Months EndedJune 30, |   |   | Three Months EndedJune 30, |   |
| (in millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | 2009                       |   |   | 2008                       |   |   | 2009 |   |   | 2008 |   |
| Stock options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $                          | -      |   |                       | $      | - |   |   | $ | - |   |   | $ | - |   |
| Restricted stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                       | 3      |   |                       |   | 5 |   |   |   | 2 |   |   |   | 3 |   |
| Restricted stock units (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                       | 1      |   |                       |   | - |   |   |   | 1 |   |   |   | - |   |
| Performance shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                       | 6      |   |                       |   | 12 |   |   |   | 5 |   |   |   | 8 |   |
| Total compensation expense (pre-tax)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $                          | 10     |   |                       | $      | 17 |   |   | $ | 8 |   |   | $ | 11 |   |
| Total compensation expense (after-tax)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | $                          | 6      |   |                       | $      | 10 |   |   | $ | 5 |   |   | $ | 7 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| (1) Beginning January 1, 2009, PG&E Corporation awarded restricted stock units (“RSUs”) instead of restricted stock as permitted by the PG&E Corporation 2006 Long-Term Incentive Plan. RSUs are hypothetical shares of stock that will generallyvest in 20% increments on the first business day of March in 2010, 2011, and 2012, with the remaining 40% vesting on the first business day of March 2013. Each vested RSU is settled for one share of PG&E Corporation common stock. Additionally, upon settlement, RSUs recipients receive payment for the amount of dividend equivalents associated with the vested RSUs that have accrued since the date of grant. |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | PG&E Corporation     |   |   | Utility                  |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|--------|--------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | Six Months EndedJune 30, |   |   | Six Months EndedJune 30, |   |
| (in millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 2009                     |   |   | 2008                     |   |   | 2009 |   |   | 2008 |   |
| Stock options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $                        | -      |   |                     | $      | 1 |   |   | $ | - |   |   | $ | 1 |   |
| Restricted stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                     | 5      |   |                     |   | 14 |   |   |   | 4 |   |   |   | 9 |   |
| Restricted stock units (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                     | 7      |   |                     |   | - |   |   |   | 4 |   |   |   | - |   |
| Performance shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                     | 22     |   |                     |   | 8 |   |   |   | 15 |   |   |   | 4 |   |
| Total compensation expense (pre-tax)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | $                        | 34     |   |                     | $      | 23 |   |   | $ | 23 |   |   | $ | 14 |   |
| Total compensation expense (after-tax)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $                        | 20     |   |                     | $      | 14 |   |   | $ | 14 |   |   | $ | 8 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                     |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| (1) Beginning January 1, 2009, PG&E Corporation awarded RSUs instead of restricted stock as permitted by the PG&E Corporation 2006 Long-Term Incentive Plan. RSUs are hypothetical shares of stock that will generally vest in 20% increments on the firstbusiness day of March in 2010, 2011, and 2012, with the remaining 40% vesting on the first business day of March 2013. Each vested RSU is settled for one share of PG&E Corporation common stock. Additionally, upon settlement, RSUs recipients receive payment for the amount of dividend equivalents associated with the vested RSUs that have accrued since the date of grant. |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Pension Benefits           |   |   | Other Benefits             |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|--------|--------|----------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Three Months EndedJune 30, |   |   | Three Months EndedJune 30, |   |
| (in millions)                                                                                                                                                                                                                                                                                                                                                                                                             |   | 2009                       |   |   | 2008                       |   |   | 2009 |   |   | 2008 |   |
| Service cost for benefits earned                                                                                                                                                                                                                                                                                                                                                                                          |   | $                          | 67     |   |                       | $      | 59 |   |   | $ | 7 |   |   | $ | 7 |   |
| Interest cost                                                                                                                                                                                                                                                                                                                                                                                                             |   |                       | 155    |   |                       |   | 144 |   |   |   | 21 |   |   |   | 20 |   |
| Expected return on plan assets                                                                                                                                                                                                                                                                                                                                                                                            |   |                       | (145   | )      |                       |   | (175 | ) |   |   | (17 | ) |   |   | (24 | ) |
| Amortization of transition obligation                                                                                                                                                                                                                                                                                                                                                                                     |   |                       | -      |   |                       |   | - |   |   |   | 7 |   |   |   | 7 |   |
| Amortization of prior service cost                                                                                                                                                                                                                                                                                                                                                                                        |   |                       | 12     |   |                       |   | 12 |   |   |   | 4 |   |   |   | 4 |   |
| Amortization of unrecognized (gain) loss                                                                                                                                                                                                                                                                                                                                                                                  |   |                       | 24     |   |                       |   | - |   |   |   | 1 |   |   |   | (4 | ) |
|      Net periodic benefit cost                                                                                                                                                                                                                                                                                                                                                                   |   |                       | 113    |   |                       |   | 40 |   |   |   | 23 |   |   |   | 10 |   |
|      Less: transfer to regulatory account (1)                                                                                                                                                                                                                                                                                                                                                    |   |                       | (72    | )      |                       |   | 1 |   |   |   | - |   |   |   | - |   |
|      Total                                                                                                                                                                                                                                                                                                                                                                                       |   | $                          | 41     |   |                       | $      | 41 |   |   | $ | 23 |   |   | $ | 10 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| (1) For the three months ended June 30, 2009 and 2008, the Utility recorded $72 million as an addition to the existing pension regulatory asset and $1 million as an addition to the existing pension regulatory liability, respectively, to reflect the difference betweenpension expense or income for accounting purposes and pension expense or income for ratemaking purposes, which is based on a funding approach. |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Pension Benefits         |   |   | Other Benefits           |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|--------|--------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Six Months EndedJune 30, |   |   | Six Months EndedJune 30, |   |
| (in millions)                                                                                                                                                                                                                                                                                                                                                                                                            |   | 2009                     |   |   | 2008                     |   |   | 2009 |   |   | 2008 |   |
| Service cost for benefits earned                                                                                                                                                                                                                                                                                                                                                                                         |   | $                        | 133    |   |                     | $      | 118 |   |   | $ | 15 |   |   | $ | 15 |   |
| Interest cost                                                                                                                                                                                                                                                                                                                                                                                                            |   |                     | 310    |   |                     |   | 287 |   |   |   | 42 |   |   |   | 40 |   |
| Expected return on plan assets                                                                                                                                                                                                                                                                                                                                                                                           |   |                     | (290   | )      |                     |   | (349 | ) |   |   | (34 | ) |   |   | (47 | ) |
| Amortization of transition obligation                                                                                                                                                                                                                                                                                                                                                                                    |   |                     | -      |   |                     |   | - |   |   |   | 13 |   |   |   | 12 |   |
| Amortization of prior service cost                                                                                                                                                                                                                                                                                                                                                                                       |   |                     | 23     |   |                     |   | 24 |   |   |   | 8 |   |   |   | 8 |   |
| Amortization of unrecognized (gain) loss                                                                                                                                                                                                                                                                                                                                                                                 |   |                     | 49     |   |                     |   | - |   |   |   | 2 |   |   |   | (8 | ) |
|      Net periodic benefit cost                                                                                                                                                                                                                                                                                                                                                                  |   |                     | 225    |   |                     |   | 80 |   |   |   | 46 |   |   |   | 20 |   |
|      Less: transfer to regulatory account (1)                                                                                                                                                                                                                                                                                                                                                   |   |                     | (143   | )      |                     |   | 2 |   |   |   | - |   |   |   | - |   |
|      Total                                                                                                                                                                                                                                                                                                                                                                                      |   | $                        | 82     |   |                     | $      | 82 |   |   | $ | 46 |   |   | $ | 20 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                     |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| (1) For the six months ended June 30, 2009 and 2008, the Utility recorded $143 million as an addition to the existing pension regulatory asset and $2 million as an addition to the existing pension regulatory liability, respectively, to reflect the difference betweenpension expense or income for accounting purposes and pension expense or income for ratemaking purposes, which is based on a funding approach. |   |

----

----

----

NOTE 3: REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS

|                                                     |   | Balance At   |   |
|----------------------------------------------------------|--------|--------------|--------|
|  (in millions)                                      |   | June 30,2009 |   |   | December 31,2008 |   |
| Pension benefits                                         |   | $            | 1,696  |   |   | $ | 1,624 |   |
| Energy recovery bonds                                    |   |         | 1,322  |   |   |   | 1,487 |   |
| Deferred income tax                                      |   |         | 913    |   |   |   | 847 |   |
| Utility retained generation                              |   |         | 772    |   |   |   | 799 |   |
| Price risk management                                    |   |         | 410    |   |   |   | 362 |   |
| Environmental compliance costs                           |   |         | 392    |   |   |   | 385 |   |
| Unamortized loss, net of gain, on reacquired debt        |   |         | 213    |   |   |   | 225 |   |
| Regulatory assets associated with plan of reorganization |   |         | 88     |   |   |   | 99 |   |
| Contract termination costs                               |   |         | 75     |   |   |   | 82 |   |
| Other                                                    |   |         | 88     |   |   |   | 86 |   |
| Total long-term regulatory assets                        |   | $            | 5,969  |   |   | $ | 5,996 |   |

----

|                                                |   | Balance At   |   |
|-----------------------------------------------------|--------|--------------|--------|
|  (in millions)                                 |   | June 30,2009 |   |   | December 31,2008 |   |
| Cost of removal obligation                          |   | $            | 2,841  |   |   | $ | 2,735 |   |
| Public purpose programs                             |   |         | 445    |   |   |   | 442 |   |
| Recoveries in excess of asset retirement obligation |   |         | 348    |   |   |   | 226 |   |
| Price risk management                               |   |         | 82     |   |   |   | 81 |   |
| Gateway Generating Station                          |   |         | 66     |   |   |   | 67 |   |
| Environmental remediation insurance recoveries      |   |         | 38     |   |   |   | 52 |   |
| Other                                               |   |         | 18     |   |   |   | 54 |   |
| Total long-term regulatory liabilities              |   | $            | 3,838  |   |   | $ | 3,657 |   |

----

|                                      |   | Receivable (Payable) |   |
|-------------------------------------------|--------|----------------------|--------|
|                                      |   | Balance At           |   |
| (in millions)                             |   | June 30, 2009        |   |   | December 31, 2008 |   |
| Utility generation                        |   | $                    | 493    |   |   | $ | 164 |   |
| Distribution revenue adjustment mechanism |   |                 | 249    |   |   |   | 40 |   |
| Modified transition cost                  |   |                 | 220    |   |   |   | 214 |   |
| Transmission revenue                      |   |                 | 156    |   |   |   | 173 |   |
| Energy resource recovery                  |   |                 | 1      |   |   |   | 384 |   |
| DWR power charge collection               |   |                 | (92    | ) |   |   | (83 | ) |
| Public purpose programs                   |   |                 | (138   | ) |   |   | (263 | ) |
| Energy recovery bonds                     |   |                 | (164   | ) |   |   | (231 | ) |
| Other                                     |   |                 | (32    | ) |   |   | 69 |   |
| Total regulatory balancing accounts, net  |   | $                    | 693    |   |   | $ | 467 |   |

----

NOTE 4: DEBT

----

NOTE 5: EQUITY

|                                               |   | PG&E Corporation |   |   | Utility                         |   |
|----------------------------------------------------|--------|----------------------|--------|--------|---------------------------------|--------|
| (in millions)                                      |   | TotalEquity          |   |   | TotalShareholders’ Equity |   |
| Balance at December 31, 2008                       |   | $                    | 9,629  |   |                            | $      | 9,787 |   |
| Net income                                         |   |                 | 636    |   |                            |   | 630 |   |
| Common stock issued                                |   |                 | 221    |   |                            |   | - |   |
| Share-based compensation amortization              |   |                 | 12     |   |                            |   | - |   |
| Common stock dividends declared and paid           |   |                 | (154   | )      |                            |   | (312 | ) |
| Common stock dividends declared but not yet paid   |   |                 | (155   | )      |                            |   | - |   |
| Preferred stock dividend requirement               |   |                 | -      |   |                            |   | (7 | ) |
| Preferred stock dividend requirement of subsidiary |   |                 | (7     | )      |                            |   | - |   |
| Tax benefit from employee stock plans              |   |                 | 2      |   |                            |   | 2 |   |
| Other comprehensive income                         |   |                 | 14     |   |                            |   | 14 |   |
| Equity contribution                                |   |                 | -      |   |                            |   | 653 |   |
| Balance at June 30, 2009                           |   | $                    | 10,198 |   |                            | $      | 10,767 |   |

----

NOTE 6: EARNINGS PER SHARE

|                                                                                                                                                                                                                          |   | Three Months Ended |   |   | Six Months Ended |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                                                                                                                                                                                                          |   | June 30,           |   |   | June 30,         |   |
| (in millions, except per share amounts)                                                                                                                                                                                       |   | 2009               |   |   | 2008             |   |   | 2009 |   |   | 2008 |   |
| Income Available for Common Shareholders                                                                                                                                                                                      |   | $                  | 388    |   |             | $      | 293 |   |   | $ | 629 |   |   | $ | 517 |   |
| Less: distributed earnings to common shareholders                                                                                                                                                                             |   |               | 155    |   |             |   | 139 |   |   |   | 309 |   |   |   | 278 |   |
| Undistributed earnings                                                                                                                                                                                                        |   | $                  | 233    |   |             | $      | 154 |   |   | $ | 320 |   |   | $ | 239 |   |
| Common shareholders earnings                                                                                                                                                                                                  |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                                                                                                         |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Distributed earnings to common shareholders                                                                                                                                                                                   |   | $                  | 155    |   |             | $      | 139 |   |   | $ | 309 |   |   | $ | 278 |   |
| Undistributed earnings allocated to common shareholders                                                                                                                                                                       |   |               | 223    |   |             |   | 146 |   |   |   | 306 |   |   |   | 227 |   |
| Total common shareholders earnings, basic                                                                                                                                                                                     |   | $                  | 378    |   |             | $      | 285 |   |   | $ | 615 |   |   | $ | 505 |   |
| Diluted                                                                                                                                                                                                                       |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Distributed earnings to common shareholders                                                                                                                                                                                   |   | $                  | 155    |   |             | $      | 139 |   |   | $ | 309 |   |   | $ | 278 |   |
| Undistributed earnings allocated to common shareholders                                                                                                                                                                       |   |               | 223    |   |             |   | 146 |   |   |   | 306 |   |   |   | 227 |   |
| Total common shareholders earnings, diluted                                                                                                                                                                                   |   | $                  | 378    |   |             | $      | 285 |   |   | $ | 615 |   |   | $ | 505 |   |
| Weighted average common shares outstanding, basic                                                                                                                                                                             |   |               | 368    |   |             |   | 356 |   |   |   | 366 |   |   |   | 355 |   |
| 9.50% Convertible Subordinated Notes                                                                                                                                                                                          |   |               | 17     |   |             |   | 19 |   |   |   | 17 |   |   |   | 19 |   |
| Weighted average common shares outstanding and participating securities, basic                                                                                                                                                |   |               | 385    |   |             |   | 375 |   |   |   | 383 |   |   |   | 374 |   |
| Weighted average common shares outstanding, basic                                                                                                                                                                             |   |               | 368    |   |             |   | 356 |   |   |   | 366 |   |   |   | 355 |   |
| Employee share-based compensation                                                                                                                                                                                             |   |               | 1      |   |             |   | 1 |   |   |   | 1 |   |   |   | 1 |   |
| Weighted average common shares outstanding, diluted                                                                                                                                                                           |   |               | 369    |   |             |   | 357 |   |   |   | 367 |   |   |   | 356 |   |
| 9.50% Convertible Subordinated Notes                                                                                                                                                                                          |   |               | 17     |   |             |   | 19 |   |   |   | 17 |   |   |   | 19 |   |
| Weighted average common shares outstanding and participating securities, diluted                                                                                                                                              |   |               | 386    |   |             |   | 376 |   |   |   | 384 |   |   |   | 375 |   |
| Net earnings per common share, basic                                                                                                                                                                                          |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Distributed earnings, basic (1)                                                                                                                                                                                               |   | $                  | 0.42   |   |             | $      | 0.39 |   |   | $ | 0.84 |   |   | $ | 0.78 |   |
| Undistributed earnings, basic                                                                                                                                                                                                 |   |               | 0.61   |   |             |   | 0.41 |   |   |   | 0.84 |   |   |   | 0.64 |   |
| Total                                                                                                                                                                                                                         |   | $                  | 1.03   |   |             | $      | 0.80 |   |   | $ | 1.68 |   |   | $ | 1.42 |   |
| Net earnings per common share, diluted                                                                                                                                                                                        |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Distributed earnings, diluted                                                                                                                                                                                                 |   | $                  | 0.42   |   |             | $      | 0.39 |   |   | $ | 0.84 |   |   | $ | 0.78 |   |
| Undistributed earnings, diluted                                                                                                                                                                                               |   |               | 0.60   |   |             |   | 0.41 |   |   |   | 0.83 |   |   |   | 0.64 |   |
| Total                                                                                                                                                                                                                         |   | $                  | 1.02   |   |             | $      | 0.80 |   |   | $ | 1.67 |   |   | $ | 1.42 |   |
|                                                                                                                                                                                                                          |   |
| (1) Distributed earnings, basic may differ from actual per share amounts paid as dividends, as the EPS computation under GAAP requires the use of the weighted average, rather than the actual, number of shares outstanding. |   |

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NOTE 7: DERIVATIVES AND HEDGING ACTIVITIES

| ·   | forward contracts that commit the Utility to purchase a commodity in the future; |
|--------------------|----------------------------------------------------------------------------------|

| ·   | swap agreements that require payments to or from counterparties based upon the difference between two prices for a predetermined contractual quantity; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | option contracts that provide the Utility with the right to buy a commodity at a predetermined price; and |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| ·   | futures contracts that are exchange-traded contracts that commit the Utility to purchase a commodity or make a cash settlement at a specified price and future date. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                            |                          |   | Contract Volumes (1) |        |
|---------------------------------------------------------------------------------------------------------------------------------|-------------------------------|--------|----------------------|-------------|
| Underlying Product                                                                                                              | Instruments                   |   | Less Than 1 Year     |        |   | 1 Year But Less Than 3 Years |   |   | 3 Years But Less Than 5 Years |   |   | Over 5 Years (2) |   |
| Natural Gas (3) (MMBtus (4))                                                                                                    | Forwards, Futures, and Swaps  |   |                 | 305,796,371 |   |   |   | 172,333,439 |   |   |   | 21,545,000 |   |   |   | - |   |
|                                                                                                                            | Options                       |   |                 | 146,042,523 |   |   |   | 105,737,360 |   |   |   | - |   |   |   | - |   |
|                                                                                                                            |                          |   |                 |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Electricity (Megawatt-hours)                                                                                                    | Forwards, Futures, and Swaps  |   |                 | 3,508,656   |   |   |   | 7,500,504 |   |   |   | 5,535,512 |   |   |   | 5,408,479 |   |
|                                                                                                                            | Options                       |   |                 | 28,076      |   |   |   | 11,450 |   |   |   | 70,584 |   |   |   | 597,908 |   |
|                                                                                                                            | Congestion Revenue Rights     |   |                 | 55,943,502  |   |   |   | 59,684,359 |   |   |   | 59,618,554 |   |   |   | 116,386,405 |   |
|                                                                                                                            |                          |   |                 |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PG&E Corporation Equity Shares                                                                                         | Dividend Participation Rights |   |                 | 16,702,194  |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                            |                          |   |                 |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) Amounts shown reflect the total gross derivative volumes by commodity type that are expected to settle in each time period. |                          |
| (2) Derivatives in this category expire between 2014 and 2022.                                                             |                          |
| (3) Amounts shown are for the combined positions of the electric and core gas portfolios.                                       |                          |
| (4) Million British Thermal Units.                                                                                              |                          |

----

|                                                                                                                                                                               |   | Gross Balances (1)                             |   |   |                                 |   |   |   |   |   |        |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|--------|--------|--------------------------------------|--------|--------|--------|--------|--------|-------------|--------|
| (in millions)                                                                                                                                                                      |   | Derivatives Designated as Cash Flow Hedges (2) |   |   | Derivatives Not Designated as Hedges |   |   | Total  |   |   | Netting (3) |   |   | Cash Collateral (3) |   |   | Total Derivative Balances on the Condensed Consolidated Balance Sheets |   |
| Commodity Risk (Corporation and Utility)                                                                                                                                           |   |
| Current Assets – Prepaid expenses and other                                                                                                                                  |   | $                                              | 7      |   |                                 | $      | 42     |   |   | $      | 49          |   |   | $ | (10 | ) |   | $ | 93 |   |   | $ | 132 |   |
| Other Noncurrent Assets – Other                                                                                                                                              |   |                                           | 3      |   |                                 |   | 121    |   |   |   | 124         |   |   |   | (42 | ) |   |   | 32 |   |   |   | 114 |   |
| Current Liabilities – Other                                                                                                                                                  |   |                                           | (141   | )      |                                 |   | (236   | )      |   |   | (377        | )      |   |   | 10 |   |   |   | 186 |   |   |   | (181 | ) |
| Noncurrent Liabilities – Other                                                                                                                                               |   |                                           | (209   | )      |                                 |   | (243   | )      |   |   | (452        | )      |   |   | 42 |   |   |   | 67 |   |   |   | (343 | ) |
| Total Commodity Risk                                                                                                                                                               |   | $                                              | (340   | )      |                                 | $      | (316   | )      |   | $      | (656        | )      |   | $ | - |   |   | $ | 378 |   |   | $ | (278 | ) |
|                                                                                                                                                                               |   |                                           |   |   |                                 |   |   |   |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Risk Instruments (4) (PG&E Corporation Only)                                                                                                                        |   |
| Current Liabilities – Other                                                                                                                                                  |   | $                                              | -      |   |                                 | $      | (27    | )      |   | $      | (27         | )      |   | $ | - |   |   | $ | - |   |   | $ | (27 | ) |
| Noncurrent Liabilities – Other                                                                                                                                               |   |                                           | -      |   |                                 |   | -      |   |   |   | -           |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total Other Risk Instruments                                                                                                                                                       |   | $                                              | -      |   |                                 | $      | (27    | )      |   | $      | (27         | )      |   | $ | - |   |   | $ | - |   |   | $ | (27 | ) |
| Total Derivatives                                                                                                                                                                  |   | $                                              | (340   | )      |                                 | $      | (343   | )      |   | $      | (683        | )      |   | $ | - |   |   | $ | 378 |   |   | $ | (305 | ) |
|                                                                                                                                                                               |   |                                           |   |   |                                 |   |   |   |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) See Note 8 of the Notes to the Condensed Consolidated Financial Statements for discussion of the valuation techniques used to calculate the fair value of these instruments.   |   |
| (2) As of June 30, 2009, PG&E Corporation and the Utility had cash flow hedges with expiration dates through December 2014 for energy contract-related derivative instruments. |   |
| (3) Netting in accordance with FIN 39 (“Right of Offset”) and FSP FIN 39-1.                                                                                            |   |
| (4) This category relates to the dividend participation rights of PG&E Corporation’s Convertible Subordinated Notes.                                                     |   |

| (in millions)                                                                                                                                                                                                                                                                                                                                               |   | Derivatives Designated as Cash Flow Hedges (1) |   |   | Derivatives Not Designated as Hedges |   |   | Total  |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|--------|--------------------------------------|--------|--------|--------|--------|
| Commodity Risk(PG&E Corporation and Utility)                                                                                                                                                                                                                                                                                                            |   |
| Unrealized gain/(loss) - Regulatory assets and liabilities (2)                                                                                                                                                                                                                                                                                              |   | $                                                   | 3      |   |                                 | $      | (163   | )      |   | $ | (160 | ) |
| Realized gain/(loss) - Cost of electricity(3)                                                                                                                                                                                                                                                                                                               |   |                                                | (43    | )      |                                 |   | (382   | )      |   |   | (425 | ) |
| Realized gain/(loss)- Cost of natural gas (3)                                                                                                                                                                                                                                                                                                               |   |                                                | (28    | )      |                                 |   | (1     | )      |   |   | (29 | ) |
| Total Commodity Risk                                                                                                                                                                                                                                                                                                                                        |   | $                                                   | (68    | )      |                                 | $      | (546   | )      |   | $ | (614 | ) |
| Other Risk Instruments(4)(PG&E Corporation Only)                                                                                                                                                                                                                                                                                                        |   |
| Other income, net                                                                                                                                                                                                                                                                                                                                           |   | $                                                   | -      |   |                                 | $      | 1      |   |   | $ | 1 |   |
| Total Other Risk                                                                                                                                                                                                                                                                                                                                            |   | $                                                   | -      |   |                                 | $      | 1      |   |   | $ | 1 |   |
|                                                                                                                                                                                                                                                                                                                                                        |   |                                                |   |   |                                 |   |   |   |   |   |   |   |
| (1) As a result of applying the provisions of SFAS No. 71, unrealized gains and losses on cash flow hedges are recorded to regulatory assets or liabilities, rather than being deferred in accumulated other comprehensive income.                                                                                                                          |   |
| (2) As a result of applying the provisions of SFAS No. 71, unrealized gains and losses on the commodity risk-related derivative instrument are recorded to regulatory assets or liabilities, rather than being recorded to the Condensed Consolidated Statements of Income. Additionally,these amounts exclude the impact of cash collateral postings. |   |
| (3) These amounts are fully passed through to customers in rates. Accordingly, net income was not impacted by realized amounts on these instruments.                                                                                                                                                                                                   |   |
| (4) This category relates to the dividend participation rights of PG&E Corporation’s Convertible Subordinated Notes.                                                                                                                                                                                                                              |   |

----

| (in millions)                                                                                                                                                                 |   |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
| Derivatives in a Liability Position with Credit-Risk-Related Contingencies That Are Not Fully Collateralized                                                                  |   | $      | (654   | ) |
| Related Derivatives in an Asset Position                                                                                                                                      |   |   | 64     |   |
| Collateral Posting in the Normal Course of Business Related to These Derivatives                                                                                              |   |   | 132    |   |
| Net Position of Derivative Contracts/Additional Collateral Posting Requirements (1)                                                                                           |   | $      | (458   | ) |
|                                                                                                                                                                          |   |   |   |   |
| (1) This calculation excludes the impact of closed but unpaid positions, as their settlement is not impacted by any of the Utility’s credit-risk-related contingencies. |   |

NOTE 8: FAIR VALUE MEASUREMENTS

| PG&E Corporation                                                                                                                                                                    |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Fair Value Measurements at June 30, 2009                                                                                                                                                |   |
| (in millions)                                                                                                                                                                           |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Assets:                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Money market investments (held by PG&E Corporation)                                                                                                                                 |   | $ | 176 |   |   | $ | - |   |   | $ | 5 |   |   | $ | 181 |   |
| Nuclear decommissioning trusts                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Equity securities                                                                                                                                         |   |   | 977 |   |   |   | - |   |   |   | 5 |   |   |   | 982 |   |
|      U.S. government and agency issues                                                                                                                         |   |   | 590 |   |   |   | 48 |   |   |   | - |   |   |   | 638 |   |
|      Municipal bonds and other                                                                                                                                 |   |   | - |   |   |   | 178 |   |   |   | - |   |   |   | 178 |   |
| Nuclear decommissioning trusts Total (1)                                                                                                                                                |   |   | 1,567 |   |   |   | 226 |   |   |   | 5 |   |   |   | 1,798 |   |
| Rabbi trusts-Equity                                                                                                                                                                     |   |   | 70 |   |   |   | - |   |   |   | - |   |   |   | 70 |   |
| Long-term disability trust                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Equity                                                                                                                                                    |   |   | 74 |   |   |   | - |   |   |   | 57 |   |   |   | 131 |   |
|      Corporate Debt Securities                                                                                                                                 |   |   | - |   |   |   | - |   |   |   | 24 |   |   |   | 24 |   |
| Long-term disability trust Total                                                                                                                                                        |   |   | 74 |   |   |   | - |   |   |   | 81 |   |   |   | 155 |   |
| Assets Total                                                                                                                                                                            |   | $ | 1,887 |   |   | $ | 226 |   |   | $ | 91 |   |   | $ | 2,204 |   |
| Liabilities:                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend participation rights                                                                                                                                                           |   | $ | - |   |   | $ | - |   |   | $ | 27 |   |   | $ | 27 |   |
| Price risk management instruments(2)                                                                                                                                                    |   |   | (22 | ) |   |   | 111 |   |   |   | 189 |   |   |   | 278 |   |
| Other                                                                                                                                                                                   |   |   | - |   |   |   | - |   |   |   | 3 |   |   |   | 3 |   |
| Liabilities Total                                                                                                                                                                       |   | $ | (22 | ) |   | $ | 111 |   |   | $ | 219 |   |   | $ | 308 |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) Excludes deferred taxes on appreciation of investment value.                                                                                                                        |   |
| (2) Balances include the impact of netting adjustments in accordance with the requirements of FIN 39-1 of $129 million to Level 1, $81 million to Level 2, and $168 million to Level 3. |   |

----

| Utility                                                                                                                                                                                 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Fair Value Measurements at June 30, 2009                                                                                                                                                |   |
| (in millions)                                                                                                                                                                           |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Assets:                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Nuclear decommissioning trusts                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|      Equity securities                                                                                                                                         |   | $ | 977 |   |   | $ | - |   |   | $ | 5 |   |   | $ | 982 |   |
|      U.S. government and agency issues                                                                                                                         |   |   | 590 |   |   |   | 48 |   |   |   | - |   |   |   | 638 |   |
|      Municipal bonds and other                                                                                                                                 |   |   | - |   |   |   | 178 |   |   |   | - |   |   |   | 178 |   |
| Nuclear decommissioning trusts Total (1)                                                                                                                                                |   |   | 1,567 |   |   |   | 226 |   |   |   | 5 |   |   |   | 1,798 |   |
| Long-term disability trust                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Equity                                                                                                                                                    |   |   | 74 |   |   |   | - |   |   |   | 57 |   |   |   | 131 |   |
|      Corporate Debt Securities                                                                                                                                 |   |   | - |   |   |   | - |   |   |   | 24 |   |   |   | 24 |   |
| Long-term disability trust Total                                                                                                                                                        |   |   | 74 |   |   |   | - |   |   |   | 81 |   |   |   | 155 |   |
| Assets Total                                                                                                                                                                            |   | $ | 1,641 |   |   | $ | 226 |   |   | $ | 86 |   |   | $ | 1,953 |   |
| Liabilities:                                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Price risk management instruments (2)                                                                                                                                                   |   | $ | (22 | ) |   | $ | 111 |   |   | $ | 189 |   |   | $ | 278 |   |
| Other                                                                                                                                                                                   |   |   | - |   |   |   | - |   |   |   | 3 |   |   |   | 3 |   |
|  Liabilities Total                                                                                                                                                                 |   | $ | (22 | ) |   | $ | 111 |   |   | $ | 192 |   |   | $ | 281 |   |
|                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) Excludes deferred taxes on appreciation of investment value.                                                                                                                        |   |
| (2) Balances include the impact of netting adjustments in accordance with the requirements of FIN 39-1 of $129 million to Level 1, $81 million to Level 2, and $168 million to Level 3. |   |

| · | The fair values of cash and cash equivalents, restricted cash and deposits, net accounts receivable, price risk management assets and liabilities, short-term borrowings, accounts payable, customer deposits, and the Utility’s variable rate pollution control bond loan agreements approximate their carrying values at June 30, 2009 and December31, 2008. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                 |
| · | The fair values of the Utility’s fixed rate senior notes, fixed rate pollution control bond loan agreements, PG&E Corporation’s 9.50% Convertible Subordinated Notes, and the ERBs issued by PERF were based on quoted market prices at June 30, 2009.                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                 |

|                           |   | At June 30,     |   |   | At December 31, |   |
|--------------------------------|--------|-----------------|--------|--------|-----------------|--------|
|                           |   | 2009            |   |   | 2008            |   |
| (in millions)                  |   | Carrying Amount |   |   | Fair Value      |   |   | Carrying Amount |   |   | Fair Value |   |
| Debt (Note 4):            |   |            |   |   |            |   |   |   |   |   |   |   |
| PG&E Corporation           |   | $               | 602    |   |            | $      | 1,024 |   |   | $ | 280 |   |   | $ | 739 |   |
| Utility                        |   |            | 8,690  |   |            |   | 9,116 |   |   |   | 8,740 |   |   |   | 9,134 |   |
| Energy recovery bonds (Note 4) |   |            | 1,409  |   |            |   | 1,446 |   |   |   | 1,583 |   |   |   | 1,564 |   |

----

|                                                             |   | Maturity Date |      |   | Amortized Cost |   |   | Total Unrealized Gains |   |   | Total Unrealized Losses |   |   | Estimated (1) Fair Value |   |
|------------------------------------------------------------------|--------|---------------|-----------|--------|----------------|--------|--------|------------------------|--------|--------|-------------------------|--------|--------|--------------------------|--------|
| (in millions)                                                    |   |          |      |   |           |   |   |                   |   |   |                    |   |   |                     |   |
| Six months ended June 30, 2009                                   |   |          |      |   |           |   |   |                   |   |   |                    |   |   |                     |   |
| U.S. government and agency issues                                |   |          | 2009-2038 |   |           | $      | 585    |                   |   | $      | 59                      |   |   | $                        | (2     | ) |   | $ | 642 |   |
| Municipal bonds and other                                        |   |          | 2009-2049 |   |           |   | 176    |                   |   |   | 3                       |   |   |                     | (5     | ) |   |   | 174 |   |
| Equity securities                                                |   |          |      |   |           |   | 589    |                   |   |   | 399                     |   |   |                     | (6     | ) |   |   | 982 |   |
| Total                                                            |   |          |      |   |           | $      | 1,350  |                   |   | $      | 461                     |   |   | $                        | (13    | ) |   | $ | 1,798 |   |
|                                                             |   |          |      |
| (1) Excludes deferred taxes on appreciation of investment value. |   |

|                                                                    |   | Six Months Ended June 30, |   |   | Year Ended December 31, |   |
|-------------------------------------------------------------------------|--------|---------------------------|--------|--------|-------------------------|--------|
|                                                                    |   | 2009                      |   |   | 2008                    |   |
| (in millions)                                                           |   |                      |   |   |                    |   |
| Gross realized gains on sales of securities held as available-for-sale  |   |                      | 12     |   |                    |   | 30 |   |
| Gross realized losses on sales of securities held as available-for-sale |   |                      | (50    | )      |                    |   | (142 | ) |

|                                                                |   | PG&E Corporation Only |   |    | PG&E Corporation and the Utility |   |   |                  |   |
|---------------------------------------------------------------------|--------|---------------------------|--------|---------|--------------------------------------|--------|--------|-----------------------|--------|
| (in millions)                                                       |   | Money Market              |   |    | Dividend Participation Rights        |   |   | Price Risk Management |   |   | Nuclear Decommission-ing Trusts Equity (1) |   |   | Long-term Disability Equity |   |   | Long-term Disability Corp. Debt Securities |   |   | Other |   |   | Total |   |
| Asset (Liability) Balance as of January 1, 2009                     |   | $                         | 12     |    |                                 | $      | (42    | )                     |   | $ | (156 | ) |   | $ | 5 |   |   | $ | 54 |   |   | $ | 24 |   |   | $ | (2 | ) |   | $ | (105 | ) |
| Realized and unrealized gains (losses):                             |   |                      |   |    |                                 |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Included in earnings                                                |   |                      | -      |    |                                 |   | 1      |                  |   |   | - |   |   |   | - |   |   |   | 3 |   |   |   | - |   |   |   | - |   |   |   | 4 |   |
| Included in regulatory assets and liabilities or balancing accounts |   |                      | -      |    |                                 |   | -      |                  |   |   | (33 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1 | ) |   |   | (34 | ) |
| Purchases, issuances, and settlements                               |   |                      | (7     | )  |                                 |   | 14     |                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 7 |   |
| Transfers in to Level 3                                             |   |                      | -      |    |                                 |   | -      |                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Asset (Liability) Balance as of June 30, 2009                       |   | $                         | 5      |    |                                 | $      | (27    | )                     |   | $ | (189 | ) |   | $ | 5 |   |   | $ | 57 |   |   | $ | 24 |   |   | $ | (3 | )  |   | $ | (128 | ) |
|                                                                |   |                      |   |    |                                 |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) Excludes deferred taxes on appreciation of investment value.    |   |                      |   |    |                                 |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                |   | PG&E Corporation Only |   |   | PG&E Corporation and the Utility |   |   |                  |   |
|---------------------------------------------------------------------|--------|---------------------------|--------|--------|--------------------------------------|--------|--------|-----------------------|--------|
| (in millions)                                                       |   | Money Market              |   |   | Dividend Participation Rights        |   |   | Price Risk Management |   |   | Nuclear Decommission-ing Trusts Equity (1) |   |   | Long-term Disability Equity |   |   | Long-term Disability Corp. Debt Securities |   |   | Other |   |   | Total |   |
| Asset (Liability) Balance as of April 1, 2009                       |   | $                         | 8      |   |                                 | $      | (33    | )                     |   | $ | (176 | ) |   | $ | 4 |   |   | $ | 47 |   |   | $ | 24 |   |   | $ | (1 | ) |   | $ | (127 | ) |
| Realized and unrealized gains (losses):                             |   |                      |   |   |                                 |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Included in earnings                                                |   |                      | -      |   |                                 |   | (1     | )                     |   |   | - |   |   |   | - |   |   |   | 10 |   |   |   | - |   |   |   | - |   |   |   | 9 |   |
| Included in regulatory assets and liabilities or balancing accounts |   |                      | -      |   |                                 |   | -      |                  |   |   | (13 | ) |   |   | 1 |   |   |   | - |   |   |   | - |   |   |   | (2 | ) |   |   | (14 | ) |
| Purchases, issuances, and settlements                               |   |                      | (3     | )      |                                 |   | 7      |                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 4 |   |
| Transfers in to Level 3                                             |   |                      | -      |   |                                 |   | -      |                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Asset (Liability) Balance as of June 30, 2009                       |   | $                         | 5      |   |                                 | $      | (27    | )                |   | $ | (189 | ) |   | $ | 5 |   |   | $ | 57 |   |   | $ | 24 |   |   | $ | (3 | ) |   | $ | (128 | ) |
|                                                                |   |                      |   |   |                                 |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) Excludes deferred taxes on appreciation of investment value.    |   |                      |   |   |                                 |   |   |                  |   |   |   |   |   |

NOTE 9: RELATED PARTY AGREEMENTS AND TRANSACTIONS

|                                                                        |   | Three Months Ended |   |   | Six Months Ended |   |
|-----------------------------------------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                                                        |   | June 30,           |   |   | June 30,         |   |
| (in millions)                                                               |   | 2009               |   |   | 2008             |   |   | 2009 |   |   | 2008 |   |
| Utility revenues from:                                                      |   |               |   |   |             |   |   |   |   |   |   |   |
| Administrative services provided to PG&E Corporation                    |   | $                  | 1      |   |             | $      | 1 |   |   | $ | 2 |   |   | $ | 2 |   |
| Utility employee benefit due from PG&E Corporation                      |   |               | -      |   |             |   | - |   |   |   | - |   |   |   | - |   |
| Utility expenses from:                                                      |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Administrative services received   from PG&E Corporation |   | $                  | 14     |   |             | $      | 28 |   |   | $ | 33 |   |   | $ | 52 |   |
| Utility employee benefit due to PG&E Corporation                        |   |               | 3      |   |             |   | 4 |   |   |   | 9 |   |   |   | 11 |   |

----

NOTE 10: RESOLUTION OF REMAINING CHAPTER 11 DISPUTED CLAIMS

| (in millions)                |   |   |   |
|------------------------------|--------|--------|--------|
| Balance at December 31, 2008 |   | $      | 1,750  |   |
| Interest accrued             |   |   | 34     |   |
| Less: Settlements            |   |   | (32    | )  |
| Balance at June 30, 2009     |   | $      | 1,752  |   |

NOTE 11: COMMITMENTS AND CONTINGENCIES

----

| (in millions) |   |   |   |
|---------------|--------|--------|--------|
| 2009          |   | $      | 1,093  |   |
| 2010          |   |   | 2,158  |   |
| 2011          |   |   | 2,189  |   |
| 2012          |   |   | 2,206  |   |
| 2013          |   |   | 2,160  |   |
| Thereafter    |   |   | 21,278 |   |
| Total         |   | $      | 31,084 |   |

| (in millions)                            |   |   |   |
|------------------------------------------|--------|--------|--------|
| 2009                                     |   | $      | 29     |   |
| 2010                                     |   |   | 50     |   |
| 2011                                     |   |   | 50     |   |
| 2012                                     |   |   | 50     |   |
| 2013                                     |   |   | 50     |   |
| Thereafter                               |   |   | 206    |   |
| Total fixed capacity payments            |   |   | 435    |   |
| Less: Amount representing interest       |   |   | 100    |   |
| Present value of fixed capacity payments |   | $      | 335    |   |

----

| (in millions) |   |   |   |
|---------------|--------|--------|--------|
| 2009          |   | $      | 381    |   |
| 2010          |   |   | 438    |   |
| 2011          |   |   | 121    |   |
| 2012          |   |   | 49     |   |
| 2013          |   |   | 42     |   |
| Thereafter    |   |   | 157    |   |
| Total         |   | $      | 1,188  |   |

| (in millions) |   |   |   |
|---------------|--------|--------|--------|
| 2009          |   | $      | 151    |   |
| 2010          |   |   | 101    |   |
| 2011          |   |   | 100    |   |
| 2012          |   |   | 88     |   |
| 2013          |   |   | 118    |   |
| Thereafter    |   |   | 1,181  |   |
| Total         |   | $      | 1,739  |   |

----

----

| · | $49 million for remediation at the Utility’s natural gas compressor site located near Hinkley, California;                                                                                                                                                                                                                                                                  |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                              |
| · | $158 million for remediation at the Utility’s natural gas compressor site located in Topock, Arizona, near the California border;                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                              |
| · |   $86 million related to remediation at divested generation facilities;                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                              |
| · | $248 million related to remediation costs for the Utility’s generation and other facilities, third-party disposal sites, and manufactured gas plant sites owned by the Utility or third parties (including those sites that are the subject of remediation orders by environmental agencies or claims by the current owners of the former manufacturedgas plant sites); and |
|   |                                                                                                                                                                                                                                                                                                                                                                              |
| · |  $53 million related to remediation costs for fossil decommissioning sites.                                                                                                                                                                                                                                                                                                  |

----

----

----

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

OVERVIEW

----

| · | The Outcome of Regulatory Proceedings and the Impact of Ratemaking Mechanisms.  Most of the Utility’s revenue requirements are set based on its costs of service in proceedings such as the General Rate Case (“GRC”) filed with the CPUC and transmission owner(“TO”) rate cases filed with the FERC.  On July 20, 2009 the Utility notified the CPUC of the Utility’s intent to file its 2011-2013 GRC application by December 1, 2009 in which the Utility intends to request an increase in authorized electric distribution, gas distribution, and electric generation revenue requirements. (See “Regulatory Matters” below.)  From time to time, the Utility also files separate applications requesting the CPUC or the FERC to authorizeadditional revenue requirements for specific capital expenditure projects, such as new power plants, gas or electric transmission facilities, installation of an advanced metering infrastructure, and reliability or system infrastructure improvements.  The Utility’s revenues will also be affected by incentive ratemaking, such as the CPUC’s customer energy efficiency shareholder incentive mechanism.  (See “Regulatory Matters” below.)  In addition, the CPUC hasauthorized the Utility to recover 100% of its reasonable electric fuel and energy procurement costs and has established a timely rate adjustment mechanism to recover such costs.  As a result, the Utility’s revenues and costs can be affected by volatility in the prices of natural gas and electricity.  (See “Risk Management Activities” below.)                                                                                                                                                                                                                           |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| · | Capital Structure and Return on Common Equity.  The Utility’s current CPUC-authorized capital structure includes a 52% common equity component.  The CPUC has authorized the Utility to set rates targeted to earn a ROE of 11.35% on the equity component of itselectric and natural gas distribution and electric generation rate base.  The Utility’s capital structure is set until 2011, and its cost of capital components, including an 11.35% ROE, will be changed before 2011 only if the annual adjustment mechanism established by the CPUC is triggered.  If the 12-month October-through-September average yield for the applicable Moody’s Investors Service utility bond index increases or decreases by more than 1% as compared to the applicablebenchmark, the Utility will file to adjust its authorized cost of capital effective on January 1 of the following year.  The Utility can also apply for an adjustment to either its capital structure or its cost of capital at any time in the event of extraordinary circumstances.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| · | The Ability of the Utility to Control Costs While Improving Operational Efficiency and Reliability.  The Utility’s revenue requirements are generally set at a level to allow the Utility the opportunity to recover its basic forecasted operating expenses, as well as toearn an ROE and recover depreciation, tax, and interest expense associated with authorized capital expenditures.  Differences in the amount or timing of forecasted and actual operating expenses and capital expenditures can affect the Utility’s ability to earn its authorized rate of return and the amount of PG&E Corporation’s income available for common shareholders.  When capital expenditures are higher than authorized levels, the Utility incurs associated depreciation, propertytax, and interest expense but does not recover revenues to fully offset these expenses or earn an ROE until the increased capital expenditures are added to rate base in future rate cases.  Items that could cause higher expenses than provided for in the last GRC primarily relate to the Utility’s efforts to maintain its aging electric and natural gas systems infrastructure; to improve the reliability and safety of its electric and natural gas system; and to improve its information technologyinfrastructure, support, and security.  In addition, the Utility expects that it will continue to incur higher costs to accelerate system-wide natural gas leak surveys and associated remedial work.  (See “Results of Operations” below.)  The Utility continually seeks to achieve operational efficiencies and improve reliability while creating future sustainable cost savings to offset these higher anticipated expenses.  The Utility also seeks to make the amountand timing of its capital expenditures consistent with budgeted amounts and timing. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| · | The Availability and Terms of Debt and Equity Financing.  The amount and timing of the Utility’s future financing needs will depend on various factors, including the conditions in the capital markets, the amount and timing of scheduled principal and interest paymentson long-term debt, the amount and timing of planned capital expenditures, and the amount and timing of interest payments related to the remaining disputed claims that were made by electricity suppliers in the Utility’s proceeding under Chapter 11 of the U.S. Bankruptcy Code (“Chapter 11”).  (See Note 10 of the Notes to the Condensed Consolidated Financial Statements.)  The amount of the Utility’s short-term financing will vary depending on the level of operating cashflows, seasonal demand for electricity and natural gas, volatility in electricity and natural gas prices, and collateral requirements related to price risk management activity, among other factors.  In order to maintain the Utility’s CPUC-authorized capital structure, during 2009 PG&E Corporation contributed $653 million of equity to the Utility. The timing and amount of future equity contributions will affect the timing and amount of any future equity or debt issuances by PG&E Corporation.  InMarch 2009, PG&E Corporation and the Utility issued $350 million and $550 million, respectively, of senior unsecured notes.  Additionally, the Utility issued $500 million principal amount of Floating Rate Senior Notes due June 10, 2010.  At June 30, 2009, the interest rate on the Floating Rate Senior Notes was 1.60%.  (See “Liquidity and Financial Resources” below.)                                                                                                                                                                         |

----

FORWARD-LOOKING STATEMENTS

| · | the Utility’s ability to manage capital expenditures and its operating and maintenance expenses within authorized levels;                                                                                                                                                                                                                                         |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                    |
| · | the outcome of pending and future regulatory proceedings and whether the Utility is able to timely recover its costs through rates;                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                    |
| · | the adequacy and price of electricity and natural gas supplies, and the ability of the Utility to manage and respond to the volatility of the electricity and natural gas markets, including the ability of the Utility and its counterparties to post or return collateral;                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                    |
| · | the effect of weather, storms, earthquakes, floods, disease, other natural disasters, explosions, fires, accidents, mechanical breakdowns, disruption of information technology and computer systems, acts of terrorism, and other events or hazards on the Utility’s facilities and operations, its customers, and third parties on which theUtility relies;     |
|   |                                                                                                                                                                                                                                                                                                                                                                    |
| · | the potential impacts of climate change on the Utility’s electricity and natural gas businesses;                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                    |
| · | changes in customer demand for electricity and natural gas resulting from unanticipated population growth or decline, general economic and financial market conditions, changes in technology including the development of alternative energy sources, or other reasons;                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                    |
| · | operating performance of the Utility’s Diablo Canyon Power Plant (“Diablo Canyon”), the availability of nuclear fuel, the occurrence of unplanned outages at Diablo Canyon, or the temporary or permanent cessation of operations at Diablo Canyon;                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                    |
| · | whether the Utility can maintain the cost savings that it has recognized from operating efficiencies that it has achieved and identify and successfully implement additional sustainable cost-saving measures;                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                    |
| · | whether the Utility incurs substantial expense to improve the safety and reliability of its electric and natural gas systems;                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                    |
| · | whether the Utility achieves the CPUC’s energy efficiency targets and recognizes any incentives that the Utility may earn in a timely manner;                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                    |
| · | the impact of changes in federal or state laws, or their interpretation, on energy policy and the regulation of utilities and their holding companies;                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                    |
| · | the impact of changing wholesale electric or gas market rules, including the impact of future FERC-ordered changes that will be incorporated into the new day-ahead, hour-ahead, and real-time wholesale electricity markets established by the California Independent System Operator (“CAISO”) to restructure the California wholesaleelectricity market; |
|   |                                                                                                                                                                                                                                                                                                                                                                    |
| · | how the CPUC administers the conditions imposed on PG&E Corporation when it became the Utility’s holding company;                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                    |
| · | the extent to which PG&E Corporation or the Utility incurs costs and liabilities in connection with litigation that are not recoverable through rates, from insurance, or from other third parties;                                                                                                                                                                 |

----

|   |                                                                                                                                                               |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | the ability of PG&E Corporation, the Utility, and counterparties to access capital markets and other sources of credit in a timely manner on acceptable terms; |
|   |                                                                                                                                                               |
| · | the impact of environmental laws and regulations and the costs of compliance and remediation;                                                                      |
|   |                                                                                                                                                               |
| · | the effect of municipalization, direct access, community choice aggregation, or other forms of bypass; and                                                         |
|   |                                                                                                                                                               |
| · | the outcome of federal or state tax audits and the impact of changes in federal or state tax laws, policies, or regulations.                                       |

----

RESULTS OF OPERATIONS

|                                                                                |   | Three Months Ended |   |   | Six Months Ended |   |
|-------------------------------------------------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                                                                |   | June 30,           |   |   | June 30,         |   |
| (in millions)                                                                       |   | 2009               |   |   | 2008             |   |   | 2009 |   |   | 2008 |   |
| Utility                                                                             |   |               |   |   |             |   |   |   |   |   |   |   |
| Electric operating revenues                                                         |   | $                  | 2,554  |   |             | $      | 2,645 |   |   | $ | 4,980 |   |   | $ | 5,159 |   |
| Natural gas operating revenues                                                      |   |               | 640    |   |             |   | 933 |   |   |   | 1,645 |   |   |   | 2,152 |   |
|    Total operating revenues                                          |   |               | 3,194  |   |             |   | 3,578 |   |   |   | 6,625 |   |   |   | 7,311 |   |
| Cost of electricity                                                                 |   |               | 883    |   |             |   | 1,097 |   |   |   | 1,766 |   |   |   | 2,124 |   |
| Cost of natural gas                                                                 |   |               | 188    |   |             |   | 487 |   |   |   | 745 |   |   |   | 1,262 |   |
| Operating and maintenance                                                           |   |               | 1,037  |   |             |   | 991 |   |   |   | 2,096 |   |   |   | 2,027 |   |
| Depreciation, amortization, and decommissioning                                     |   |               | 429    |   |             |   | 418 |   |   |   | 848 |   |   |   | 820 |   |
|    Total operating expenses                                          |   |               | 2,537  |   |             |   | 2,993 |   |   |   | 5,455 |   |   |   | 6,233 |   |
| Operating Income                                                                    |   |               | 657    |   |             |   | 585 |   |   |   | 1,170 |   |   |   | 1,078 |   |
| Interest income                                                                     |   |               | 17     |   |             |   | 33 |   |   |   | 26 |   |   |   | 57 |   |
| Interest expense                                                                    |   |               | (166   | )      |             |   | (178 | ) |   |   | (339 | ) |   |   | (358 | ) |
| Other income, net                                                                   |   |               | 15     |   |             |   | 7 |   |   |   | 36 |   |   |   | 26 |   |
| Income Before Income Taxes                                                          |   |               | 523    |   |             |   | 447 |   |   |   | 893 |   |   |   | 803 |   |
| Income tax provision                                                                |   |               | 132    |   |             |   | 134 |   |   |   | 263 |   |   |   | 254 |   |
| Net Income                                                                          |   |               | 391    |   |             |   | 313 |   |   |   | 630 |   |   |   | 549 |   |
| Preferred stock dividend requirement                                                |   |               | 4      |   |             |   | 4 |   |   |   | 7 |   |   |   | 7 |   |
| Income Available for Common Stock                                                   |   | $                  | 387    |   |             | $      | 309 |   |   | $ | 623 |   |   | $ | 542 |   |
| PG&E Corporation, Eliminations, and Other(1)                                    |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Operating revenues                                                                  |   | $                  | -      |   |             | $      | - |   |   | $ | - |   |   | $ | - |   |
| Operating expenses                                                                  |   |               | 1      |   |             |   | 1 |   |   |   | 1 |   |   |   | 1 |   |
| Operating Loss                                                                      |   |               | (1     | )      |             |   | (1 | ) |   |   | (1 | ) |   |   | (1 | ) |
| Interest income                                                                     |   |               | -      |   |             |   | - |   |   |   | - |   |   |   | 2 |   |
| Interest expense                                                                    |   |               | (12    | )      |             |   | (7 | ) |   |   | (20 | ) |   |   | (14 | ) |
| Other income (expense), net                                                         |   |               | 7      |   |             |   | (2 | ) |   |   | 4 |   |   |   | (16 | ) |
| Loss Before Income Taxes                                                            |   |               | (6     | )      |             |   | (10 | ) |   |   | (17 | ) |   |   | (29 | ) |
| Income tax provision (benefit)                                                      |   |               | (7     | )      |             |   | 6 |   |   |   | (23 | ) |   |   | (4 | ) |
| Net Income (Loss)                                                                   |   | $                  | 1      |   |             | $      | (16 | ) |   | $ | 6 |   |   | $ | (25 | ) |
| Consolidated Total                                                                  |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Operating revenues                                                                  |   | $                  | 3,194  |   |             | $      | 3,578 |   |   | $ | 6,625 |   |   | $ | 7,311 |   |
| Operating expenses                                                                  |   |               | 2,538  |   |             |   | 2,994 |   |   |   | 5,456 |   |   |   | 6,234 |   |
| Operating Income                                                                    |   |               | 656    |   |             |   | 584 |   |   |   | 1,169 |   |   |   | 1,077 |   |
| Interest income                                                                     |   |               | 17     |   |             |   | 33 |   |   |   | 26 |   |   |   | 59 |   |
| Interest expense                                                                    |   |               | (178   | )      |             |   | (185 | ) |   |   | (359 | ) |   |   | (372 | ) |
| Other income, net                                                                   |   |               | 22     |   |             |   | 5 |   |   |   | 40 |   |   |   | 10 |   |
| Income Before Income Taxes                                                          |   |               | 517    |   |             |   | 437 |   |   |   | 876 |   |   |   | 774 |   |
| Income tax provision                                                                |   |               | 125    |   |             |   | 140 |   |   |   | 240 |   |   |   | 250 |   |
| Net Income                                                                          |   |               | 392    |   |             |   | 297 |   |   |   | 636 |   |   |   | 524 |   |
| Preferred stock dividend requirement of subsidiary                                  |   |               | 4      |   |             |   | 4 |   |   |   | 7 |   |   |   | 7 |   |
| Income Available for Common Shareholders                                            |   | $                  | 388    |   |             | $      | 293 |   |   | $ | 629 |   |   | $ | 517 |   |
|                                                                                |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| (1) PG&E Corporation eliminates all intercompany transactions in consolidation. |   |

----

|                                                                                                                                                                                                                                                          |   | Three Months Ended |   |   | Six Months Ended |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                                                                                                                                                                                                                                          |   | June 30,           |   |   | June 30,         |   |
| (in millions)                                                                                                                                                                                                                                                 |   | 2009               |   |   | 2008             |   |   | 2009 |   |   | 2008 |   |
| Electric revenues                                                                                                                                                                                                                                             |   | $                  | 3,012  |   |             | $      | 2,948 |   |   | $ | 5,833 |   |   | $ | 5,789 |   |
| DWR pass-through revenues(1)                                                                                                                                                                                                                                  |   |               | (458   | )      |             |   | (303 | ) |   |   | (853 | ) |   |   | (630 | ) |
| Total electric operating revenues                                                                                                                                                                                                                             |   | $                  | 2,554  |   |             | $      | 2,645 |   |   | $ | 4,980 |   |   | $ | 5,159 |   |
|                                                                                                                                                                                                                                                          |   |               |   |
| (1) These are revenues collected on behalf of the DWR for electricity allocated to the Utility’s customers under contracts between the DWR and power suppliers, and are not included in the Utility’s CondensedConsolidated Statements of Income. |   |

| · | Electricity procurement costs passed through to customers decreased by $238 million in the three months ended June 30, 2009 and $385 million in the six months ended June 30, 2009.  (See “Cost of Electricity” below.)                                       |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                |
| · | Public purpose program costs passed through to customers decreased by $17 million in the three months ended June 30, 2009 and $46 million in the six months ended June 30, 2009, due to timing of program spending.  (See “Operating and Maintenance” below.) |
|   |                                                                                                                                                                                                                                                                                |
| · | Other miscellaneous decreases in electric operating revenues of $2 million in the three months ended June 30, 2009 and $6 million in the six months ended June 30, 2009.                                                                                                            |

| · | Base revenues increased by $26 million in the three months ended June 30, 2009 and $52 million in the six months ended June 30, 2009, as a result of attrition adjustments as authorized in the 2007 GRC.                                                                              |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                   |
| · | Revenues associated with separately funded projects placed in service, including the Gateway Generating Station and the new steam generators at Diablo Canyon, increased by $47 million in the three months ended June 30, 2009 and $94 million in the six months ended June 30, 2009. |
|   |                                                                                                                                                                                                                                                                                   |
| · | Electric operating revenues increased by $35 million in the three and six months ended June 30, 2009 for the recovery of costs related to hydroelectric generation facilities in 2000 and 2001.  (See “Regulatory Matters” below.)                               |

----

|   |                                                                                                                                                                                                                                                                          |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | Electric transmission revenues increased by $38 million in the three months ended June 30, 2009 and $57 million in the six months ended June 30, 2009, primarily due to an increase in rates as authorized in the current TO rate case.                                       |
|   |                                                                                                                                                                                                                                                                          |
| · | Electric operating revenues increased by $20 million in the three and six months ended June 30, 2009 due to recovery of collateral payments to the CAISO in order to participate in the new day-ahead market.  (See “Operating and Maintenance” below.) |

|                                                 |   | Three Months Ended |   |   | Six Months Ended |   |
|------------------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                                 |   | June 30,           |   |   | June 30,         |   |
| (in millions)                                        |   | 2009               |   |   | 2008             |   |   | 2009 |   |   | 2008 |   |
| Cost of purchased power                              |   | $                  | 852    |   |             | $      | 1,140 |   |   | $ | 1,721 |   |   | $ | 2,178 |   |
| Proceeds from surplus sales allocated to the Utility |   |               | (17    | )      |             |   | (90 | ) |   |   | (48 | ) |   |   | (135 | ) |
| Fuel used in own generation                          |   |               | 48     |   |             |   | 47 |   |   |   | 93 |   |   |   | 81 |   |
| Total cost of electricity                            |   | $                  | 883    |   |             | $      | 1,097 |   |   | $ | 1,766 |   |   | $ | 2,124 |   |
| Average cost of purchased power per kWh (1)          |   | $                  | 0.084  |   |             | $      | 0.089 |   |   | $ | 0.081 |   |   | $ | 0.088 |   |
| Total purchased power (in millions of kWh)           |   |               | 10,177 |   |             |   | 12,862 |   |   |   | 21,165 |   |   |   | 24,652 |   |
|                                                 |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| (1) Kilowatt-hour                                    |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                   |   | Three Months Ended |   |   | Six Months Ended |   |
|--------------------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                                   |   | June 30,           |   |   | June 30,         |   |
| (in millions)                                          |   | 2009               |   |   | 2008             |   |   | 2009 |   |   | 2008 |   |
| Bundled natural gas revenues                           |   | $                  | 555    |   |             | $      | 849 |   |   | $ | 1,478 |   |   | $ | 1,990 |   |
| Transportation service-only revenues                   |   |               | 85     |   |             |   | 84 |   |   |   | 167 |   |   |   | 162 |   |
| Total natural gas operating revenues                   |   | $                  | 640    |   |             | $      | 933 |   |   | $ | 1,645 |   |   | $ | 2,152 |   |
| Average bundled revenue per Mcf(1) of natural gas sold |   | $                  | 10.67  |   |             | $      | 15.72 |   |   | $ | 9.66 |   |   | $ | 11.92 |   |
| Total bundled natural gas sales (in millions of Mcf)   |   |               | 52     |   |             |   | 54 |   |   |   | 153 |   |   |   | 167 |   |
|                                                   |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| (1) One thousand cubic feet                            |   |

|                                        |   | Three Months Ended |   |   | Six Months Ended |   |
|---------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                        |   | June 30,           |   |   | June 30,         |   |
| (in millions)                               |   | 2009               |   |   | 2008             |   |   | 2009 |   |   | 2008 |   |
| Cost of natural gas sold                    |   | $                  | 149    |   |             | $      | 448 |   |   | $ | 664 |   |   | $ | 1,202 |   |
| Transportation cost of natural gas sold     |   |               | 39     |   |             |   | 39 |   |   |   | 81 |   |   |   | 60 |   |
| Total cost of natural gas                   |   | $                  | 188    |   |             | $      | 487 |   |   | $ | 745 |   |   | $ | 1,262 |   |
| Average cost per Mcf of natural gas sold    |   | $                  | 2.87   |   |             | $      | 8.30 |   |   | $ | 4.34 |   |   | $ | 7.20 |   |
| Total natural gas sold (in millions of Mcf) |   |               | 52     |   |             |   | 54 |   |   |   | 153 |   |   |   | 167 |   |

----

----

| · | Interest expense decreased by $14 million in the three months ended June 30, 2009, and $28 million in the six months ended June 30, 2009, primarily due to lower FERC interest rates accrued on the liability for disputed claims.                                                                                                                                                                                          |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                        |
| · | Interest expense decreased by $10 million in the three months ended June 30, 2009, and $17 million in the six months ended June 30, 2009, primarily due to lower interest rates affecting various balancing accounts.                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                        |
| · | Interest expense decreased by $4 million in the three months ended June 30, 2009, and $10 million in the six months ended June 30, 2009, due to the reduction of the outstanding balance of ERBs.                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                        |
| · | Interest expense on pollution control bonds decreased by $8 million in the six months ended June 30, 2009, due to the repurchase of auction rate pollution control bonds in March and April 2008.  The Utility partially refunded these bonds in September and October 2008.  Additionally, interest expense decreased due to lowerinterest rates on outstanding variable rate pollution control bonds. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                        |
| · | Interest expense decreased by $10 million in the three months ended June 30, 2009, and $11 million in the six months ended June 30, 2009, primarily due to decreases in other interest expense.                                                                                                                                                                                                                             |

LIQUIDITY AND FINANCIAL RESOURCES

----

| (in millions)                                                                                                                                                                                                                  |                      |             | At June 30, 2009 |           |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------|------------------|------------------|----------------|
| Authorized Borrower                                                                                                                                                                                                            | Facility                  | Termination Date |             | Facility Limit |   |   | Letters of Credit Outstanding |   |   | Cash Borrowings |   |   | Commercial Paper Backup |   |   | Availability |   |
| PG&E Corporation                                                                                                                                                                                                           | Revolving credit facility | February 2012    |             | $              | 187 | (1)  |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 187 |   |
| Utility                                                                                                                                                                                                                        | Revolving credit facility | February 2012    |             |           | 1,940 | (2)  |   |   | 303 |   |   |   | - |   |   |   | 243 |   |   |   | 1,394 |   |
| Total credit facilities                                                                                                                                                                                                        |                      | $                | 2,127            |           |   | $ | 303 |   |   | $ | - |   |   | $ | 243 |   |   | $ | 1,581 |   |
|                                                                                                                                                                                                                      |                      |             |             |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) Includes an $87 million sublimit for letters of credit and $100 million sublimit for “swingline” loans, defined as loans that are made available on a same-day basis and are repayable in full within 30 days. |                      |
| (2) Includes a $921 million sublimit for letters of credit and $200 million sublimit for swingline loans.                                                                                                                      |                      |

----

|                                                                              |   | Six Months Ended |   |
|-----------------------------------------------------------------------------------|--------|------------------|--------|
|                                                                              |   | June 30,         |   |
| (in millions)                                                                     |   | 2009             |   |   | 2008 |   |
| Net income                                                                        |   | $                | 630    |   |   | $ | 549 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |             |   |   |   |   |   |   |
| Depreciation, amortization, and decommissioning                                   |   |             | 932    |   |   |   | 902 |   |
| Allowance for equity funds used during construction                               |   |             | (47    | ) |   |   | (32 | ) |
| Deferred income taxes and tax credits, net                                        |   |             | 368    |   |   |   | 316 |   |
| Other changes in noncurrent assets and liabilities                                |   |             | (34    | ) |   |   | 480 |   |
| Effect of changes in operating assets and liabilities:                            |   |             |   |   |   |   |   |   |
| Accounts receivable                                                               |   |             | 199    |   |   |   | (66 | ) |
| Inventories                                                                       |   |             | 113    |   |   |   | (57 | ) |
| Accounts payable                                                                  |   |             | (140   | ) |   |   | 123 |   |
| Income taxes receivable/payable                                                   |   |             | 64     |   |   |   | 57 |   |
| Regulatory balancing accounts, net                                                |   |             | (228   | ) |   |   | (351 | ) |
| Other current assets                                                              |   |             | 10     |   |   |   | 429 |   |
| Other current liabilities                                                         |   |             | (220   | ) |   |   | (73 | ) |
| Other                                                                             |   |             | 3      |   |   |   | (3 | ) |
| Net cash provided by operating activities                                         |   | $                | 1,650  |   |   | $ | 2,274 |   |

----

|                                                   |   | Six Months Ended |   |
|--------------------------------------------------------|--------|------------------|--------|
|                                                   |   | June 30,         |   |
| (in millions)                                          |   | 2009             |   |   | 2008 |   |
| Capital expenditures                                   |   | $                | (2,077 | ) |   | $ | (1,712 | ) |
| Proceeds from sale of assets                           |   |             | 5      |   |   |   | 12 |   |
| Decrease (increase) in restricted cash                 |   |             | 15     |   |   |   | (7 | ) |
| Proceeds from nuclear decommissioning trust sales      |   |             | 954    |   |   |   | 636 |   |
| Purchases of nuclear decommissioning trust investments |   |             | (985   | ) |   |   | (665 | ) |
| Net cash used in investing activities                  |   | $                | (2,088 | ) |   | $ | (1,736 | ) |

|                                                                                                                                 |   | Six Months Ended |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|--------|
|                                                                                                                                 |   | June 30,         |   |
| (in millions)                                                                                                                        |   | 2009             |   |   | 2008 |   |
| Net repayments under revolving credit facility                                                                                       |   | $                | -      |   |   | $ | (250 | ) |
| Net repayments of commercial paper, net of discount of $3 million in 2009 and $2 million in 2008                                     |   |             | (47    | ) |   |   | (114 | ) |
| Proceeds from issuance of short-term debt, net of issuance costs of $1 million in 2009                                               |   |             | 499    |   |   |   | - |   |
| Proceeds from issuance of long-term debt, net of premium, discount, and issuance costs of $12 million in 2009 and $2 million in 2008 |   |             | 538    |   |   |   | 598 |   |
| Long-term debt matured or repurchased                                                                                                |   |             | (600   | ) |   |   | (454 | ) |
| Energy recovery bonds matured                                                                                                        |   |             | (174   | ) |   |   | (165 | ) |
| Preferred stock dividends paid                                                                                                       |   |             | (7     | ) |   |   | (7 | ) |
| Common stock dividends paid                                                                                                          |   |             | (312   | ) |   |   | (284 | ) |
| Equity contribution                                                                                                                  |   |             | 653    |   |   |   | 50 |   |
| Other                                                                                                                                |   |             | (6     | ) |   |   | 16 |   |
| Net cash provided by (used in) financing activities                                                                                  |   | $                | 544    |   |   | $ | (610 | ) |

CONTRACTUAL COMMITMENTS

----

CAPITAL EXPENDITURES

----

OFF-BALANCE SHEET ARRANGEMENTS

CONTINGENCIES

REGULATORY MATTERS

----

----

RISK MANAGEMENT ACTIVITIES

| (in millions)                                                                                                                                                                                                                                                                                     |   | Gross CreditExposure Before Credit Collateral(1) |   |   | Credit Collateral |   |   | Net Credit Exposure(2) |   |   | Number ofWholesaleCustomers or Counterparties>10% |   |   | Net Exposure toWholesaleCustomers or Counterparties>10% |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|--------|--------|-------------------|--------|--------|------------------------|--------|--------|------------------------------------------------------|--------|--------|------------------------------------------------------------|--------|
| June 30, 2009                                                                                                                                                                                                                                                                                     |   | $                                                | 204    |   |              | $      | 32     |                   |   | $      | 172                                                  |   |   |                                                       | 3      |   |   | $ | 142 |   |
| December 31, 2008                                                                                                                                                                                                                                                                                 |   | $                                                | 240    |   |              | $      | 84     |                   |   | $      | 156                                                  |   |   |                                                       | 2      |   |   | $ | 107 |   |
|                                                                                                                                                                                                                                                                                              |   |                                             |   |   |              |   |   |                   |   |   |                                                 |   |   |                                                       |   |   |   |   |   |   |
| (1) Gross credit exposure equals mark-to-market value on financially settled contracts, notes receivable, and net receivables (payables) where netting is contractually allowed. Gross and net credit exposure amounts reported above do not include adjustmentsfor time value or liquidity. |   |
| (2) 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.                                                                             |   |

----

CRITICAL ACCOUNTING POLICIES

| · | regulatory assets and liabilities;      |
|--------|-----------------------------------------|
|   |                                    |
| · | environmental remediation liabilities;  |
|   |                                    |
| · | asset retirement obligations;           |
|   |                                    |
| · | accounting for income taxes; and        |
|   |                                    |
| · | pension and other postretirement plans. |

NEW ACCOUNTING POLICIES

----

----

ACCOUNTING PRONOUNCEMENTS ISSUED BUT NOT YET ADOPTED

----

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4. CONTROLS AND PROCEDURES

----

ITEM 1. LEGAL PROCEEDINGS

ITEM 1A. RISK FACTORS

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

----

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

| 1.   | 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): |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   |   |              For |   |            Against |   |             Abstain |
|------------------------|--------|-----------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------|
| David R. Andrews       |   | 260,180,247                                                                       |   | 4,381,437                                                                 |   | 1,169,522                                                                       |
| C. Lee Cox             |   | 259,858,613                                                                       |   | 4,731,971                                                                 |   | 1,140,622                                                                       |
| Peter A. Darbee        |   | 259,218,162                                                                       |   | 5,489,392                                                                 |   | 1,023,652                                                                       |
| Maryellen C. Herringer |   | 259,558,816                                                                       |   | 5,008,503                                                                 |   | 1,163,887                                                                       |
| Roger H. Kimmel        |   | 261,024,544                                                                       |   | 3,486,603                                                                 |   | 1,220,059                                                                       |
| Richard A. Meserve     |   | 252,048,376                                                                       |   | 12,532,659                                                                |   | 1,150,171                                                                       |
| Forrest E. Miller      |   | 261,197,670                                                                       |   | 3,397,224                                                                 |   | 1,136,312                                                                       |
| Barbara L. Rambo       |   | 258,823,414                                                                       |   | 5,858,981                                                                 |   | 1,048,811                                                                       |
| Barry Lawson Williams  |   | 251,196,096                                                                       |   | 13,431,653                                                                |   | 1,103,457                                                                       |

| 2.   | Ratification of the appointment of Deloitte & Touche LLP as independent registered public accounting firm for 2009 (included as Item 2 in the proxy statement): |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | For:     |   | 261,716,319 |
|--------|----------|--------|-------------|
|   | Against: |   | 3,349,443   |
|   | Abstain: |   | 665,444     |

| 3.   | Consideration of a shareholder proposal regarding shareholder say on executive pay (included as Item 3 in the proxy statement): |
|----------------|---------------------------------------------------------------------------------------------------------------------------------|

|   |  For:              |   | 85,730,957  |
|--------|-------------------------|--------|-------------|
|   |  Against:          |   | 129,649,130 |
|   |  Abstain:          |   | 12,438,735  |
|   |  Broker Non-Vote1: |   | 37,912,384  |

----

----

| 4. | Consideration of a shareholder proposal regarding shareholder reincorporation in North Dakota (included as Item 4 in the proxy statement): |
|----|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | For:              |   | 5,331,955   |
|--------|-------------------|--------|-------------|
|   | Against:          |   | 219,966,095 |
|   | Abstain:          |   | 2,520,772   |
|   | Broker Non-Vote2: |   | 37,912,384  |

| 1.   | 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): |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   |   |             For |   |                Against |   |                Abstain |
|------------------------|--------|-----------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------|
| David R. Andrews       |   | 271,967,457                                                                 |   | 158,076                                                                                           |   | 46,770                                                                                            |
| C. Lee Cox             |   | 271,971,629                                                                 |   | 153,907                                                                                           |   | 46,767                                                                                            |
| Peter A. Darbee        |   | 271,983,262                                                                 |   | 143,123                                                                                           |   | 45,918                                                                                            |
| Maryellen C. Herringer |   | 271,974,291                                                                 |   | 160,751                                                                                           |   | 37,261                                                                                            |
| Roger H. Kimmel        |   | 271,986,056                                                                 |   | 146,337                                                                                           |   | 39,910                                                                                            |
| Richard A. Meserve     |   | 271,979,187                                                                 |   | 143,461                                                                                           |   | 49,655                                                                                            |
| Forrest E. Miller      |   | 271,984,004                                                                 |   | 140,631                                                                                           |   | 47,668                                                                                            |
| Barbara L. Rambo       |   | 271,977,891                                                                 |   | 141,702                                                                                           |   | 52,710                                                                                            |
| Barry Lawson Williams  |   | 271,944,498                                                                 |   | 178,715                                                                                           |   | 49,090                                                                                            |

| 2.   | Ratification of the appointment of Deloitte & Touche LLP as independent registered public accounting firm for 2009 (included as Item 2 in the proxy statement): |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | For:     |   | 272,027,596 |
|--------|----------|--------|-------------|
|   | Against: |   | 64,071      |
|   | Abstain: |   | 80,636      |

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ITEM 5. OTHER INFORMATION

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ITEM 6. EXHIBITS

|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.1                                                                                                                    | Seventh Supplemental Indenture, dated as of June 11, 2009 relating to the issuance of $500,000,000 aggregate principal amount of Pacific Gas and Electric Company’s Floating Rate Senior Notes due June 10, 2010 (incorporated by reference to Pacific Gas and Electric Company’s Current Report on Form 8-K dated June 11, 2009 (File No.1-2348), Exhibit 4.1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.1                                                                                                                   | Amendment and Limited Consent Agreement, dated as of April 27, 2009, by which Lehman Brothers Bank, FSB has been removed as a lender under the Amended and Restated Unsecured Revolving Credit Agreement entered into among PG&E Corporation, BNP Paribas, as administrative agent and a lender, Deutsche Bank Securities Inc., as syndicationagent, ABN AMRO Bank, N.V., Bank of America, N.A., and Barclays Bank Plc, as documentation agents and lenders, and other lenders, dated February 26, 2007.  (The Amended and Restated Unsecured Revolving Credit Agreement has previously been filed as Exhibit 10.1 to PG&E Corporation and Pacific Gas and Electric Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (File No. 1-12609 and File No. 1-2348).)                                                              |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.2                                                                                                                   | Amendment and Limited Consent Agreement, dated as of April 27, 2009, by which Lehman Brothers Bank, FSB has been removed as a lender under the Amended and Restated Unsecured Revolving Credit Agreement entered into among Pacific Gas and Electric Company, Citicorp North America, Inc., as administrative agent and a lender, JPMorgan SecuritiesInc., as syndication agent, Barclays Bank Plc and BNP Paribas, as documentation agents and lenders, Deutsche Bank Securities Inc., as documentation agent, and other lenders, dated February 26, 2007.   (The Amended and Restated Unsecured Revolving Credit Agreement has previously been filed as Exhibit 10.2 to PG&E Corporation’s and Pacific Gas and Electric Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (File No. 1-12609 and File No. 1-2348).) |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 11                                                                                                                     | Computation of Earnings Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 12.1                                                                                                                   | Computation of Ratios of Earnings to Fixed Charges for Pacific Gas and Electric Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 12.2                                                                                                                   | Computation of Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends for Pacific Gas and Electric Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 12.3                                                                                                                   | Computation of Ratios of Earnings to Fixed Charges for PG&E Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 31.1                                                                                                                   | Certifications of the Chief Executive Officer and the Chief Financial Officer of PG&E Corporation required by Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 31.2                                                                                                                   | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 32.1**                                                                                                                 | Certifications of the Chief Executive Officer and the Chief Financial Officer of PG&E Corporation required by Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 32.2**                                                                                                                 | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                   |
| **Pursuant to Item 601(b) (32) of SEC Regulation S-K, these Exhibits are furnished rather than filed with this report. |

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| PG&E CORPORATION                                                                                                     |
|--------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                     |
| KENT M. HARVEY                                                                                                           |
|                                                                                                                     |
| Kent M. HarveySenior Vice President and Chief Financial Officer(duly authorized officer and principal financial officer) |

| PACIFIC GAS AND ELECTRIC COMPANY                                                                                              |
|-------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                          |
| BARBARA L. BARCON                                                                                                             |
|                                                                                                                          |
| Barbara L. BarconVice President, Finance and Chief Financial Officer(duly authorized officer and principal financial officer) |

----

|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.1                                                                                                                    | Seventh Supplemental Indenture, dated as of June 11, 2009 relating to the issuance of $500,000,000 aggregate principal amount of Pacific Gas and Electric Company’s Floating Rate Senior Notes due June 10, 2010 (incorporated by reference to Pacific Gas and Electric Company’s Current Report on Form 8-K dated June 11, 2009 (File No.1-2348), Exhibit 4.1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.1                                                                                                                   | Amendment and Limited Consent Agreement, dated as of April 27, 2009, by which Lehman Brothers Bank, FSB has been removed as a lender under the Amended and Restated Unsecured Revolving Credit Agreement entered into among PG&E Corporation, BNP Paribas, as administrative agent and a lender, Deutsche Bank Securities Inc., as syndicationagent, ABN AMRO Bank, N.V., Bank of America, N.A., and Barclays Bank Plc, as documentation agents and lenders, and other lenders, dated February 26, 2007.  (The Amended and Restated Unsecured Revolving Credit Agreement has previously been filed as Exhibit 10.1 to PG&E Corporation and Pacific Gas and Electric Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (File No. 1-12609 and File No. 1-2348).)                                                        |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.2                                                                                                                   | Amendment and Limited Consent Agreement, dated as of April 27, 2009, by which Lehman Brothers Bank, FSB has been removed as a lender under the Amended and Restated Unsecured Revolving Credit Agreement entered into among Pacific Gas and Electric Company, Citicorp North America, Inc., as administrative agent and a lender, JPMorgan SecuritiesInc., as syndication agent, Barclays Bank Plc and BNP Paribas, as documentation agents and lenders, Deutsche Bank Securities Inc., as documentation agent, and other lenders, dated February 26, 2007.  (The Amended and Restated Unsecured Revolving Credit Agreement has previously been filed as Exhibit 10.2 to PG&E Corporation’s and Pacific Gas and Electric Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (File No. 1-12609 and File No. 1-2348).) |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 11                                                                                                                     | Computation of Earnings Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 12.1                                                                                                                   | Computation of Ratios of Earnings to Fixed Charges for Pacific Gas and Electric Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 12.2                                                                                                                   | Computation of Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends for Pacific Gas and Electric Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 12.3                                                                                                                   | Computation of Ratios of Earnings to Fixed Charges for PG&E Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 31.1                                                                                                                   | Certifications of the Chief Executive Officer and the Chief Financial Officer of PG&E Corporation required by Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 31.2                                                                                                                   | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 32.1**                                                                                                                 | Certifications of the Chief Executive Officer and the Chief Financial Officer of PG&E Corporation required by Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 32.2**                                                                                                                 | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                   |
|                                                                                                                   |
| **Pursuant to Item 601(b) (32) of SEC Regulation S-K, these Exhibits are furnished rather than filed with this report. |

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