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Workforce Diversity and Initiatives

PG&E operates in the most diverse state in the nation. It is our fundamental belief that the remarkable range of backgrounds and life experiences of California's citizens has made it one of the most innovative economies in the world and a leader on the important business, social and environmental matters of the day. And it is this belief that inspires us to foster rich diversity among our employee team; meaningful diversity allows us to achieve our vision of being the leading utility in the United States.

In 2006, PG&E's senior management team reviewed our overall approach to securing the most capable, highly skilled and diverse workforce possible. We recognize that for us to become the company we want to be, we will need an employee team that is composed of individuals who have the confidence and capabilities to work anywhere, do anything and yet choose to be at PG&E. Attracting and nurturing this kind of talent requires the creation of a culture and environment that encourages employees to realize their full potential and produce results beyond expectations. Pursuing a strategy that enhances, fosters and celebrates diversity is critical to realizing this vision.

The strategy developed by our senior management team is based on five key drivers:

Market: The diversity of our customer base is increasing rapidly; our workforce must reflect the marketplace.
Talent: There is an increasing “war for talent” with other utilities, companies and industries; attracting and retaining a diverse, high-quality workforce is critical.
Innovation: Leveraging our diversity to develop breakthrough solutions that will address customer service, distribution and operational challenges is essential.
Reputation: Our reputation and relationship with the diverse communities we serve is crucial to our future growth, profitability and overall viability.
Values: Our behaviors in the workplace must be aligned with our corporate values.
  To support this strategy, we are developing and implementing programs and policies to maintain and enhance diversity at PG&E, in all facets of the organization; ensure that all members of our employee team recognize the importance of a diverse workforce and understand how they contribute to realizing this goal; and prepare the workforce of tomorrow. And, we are communicating our vision and values widely so that all prospective candidates understand the opportunities available at PG&E. For example, PG&E was

honored to participate in the 2006 Net Impact conference, hosted by the Kellogg School of Management. The Net Impact conference brings together close to 1,000 MBA students from over 90 MBA programs to hear from leading businesses, academics and NGOs about corporate responsibility in today's workplace. PG&E provided insight into how our renewable energy programs help to create a sustainable energy future for both California and the nation, as well as the responsibility companies have to ensure that the communities they serve are both healthy and vibrant.

Some other examples of programs, policies and initiatives to foster a diverse workforce include:

MBA Leadership Program. PG&E's MBA Leadership Program recruits graduates from MBA programs at top business schools that are not only academically distinguished, but also are known for their diverse student bodies. The program puts MBA graduates on an accelerated track, developing them through a series of rotational assignments within PG&E that give them a broad base of experience and knowledge about our business. In 2006, 35 officers and directors, including the Chairman and CEO of PG&E Corporation, visited 5 campuses and met with more than 100 MBA candidates. Seven MBA hires will be joining PG&E in the fall of 2007. These recruits will join the 18 current and graduating members of this program currently working as part of our team.
Apprentice Training Programs. We also cultivate diversity through external partnerships with programs and organizations that work with minorities and women. For example, our partnership with the Center for Training and Careers in San Jose helps prepare and train women for careers in nontraditional occupations at PG&E. Currently nine graduates are working in career-oriented positions.
Math Engineering and Sciences Achievement Program (MESA). In 2005, PG&E agreed to underwrite three MESA postsecondary student leadership conferences through 2008. MESA is a recognized leader in developing tomorrow's engineering, technology and management leaders from California's educationally disadvantaged student populations. These events will provide more than 300 math, science and engineering students from community colleges and four-year universities throughout northern California with the opportunity to immerse themselves in leadership and career-building activities. Our collaboration with MESA serves as an outstanding industry-education model. It ensures an improved quality of education for California's diverse student community, and it expands the pool of talent from which PG&E can draw. And, in 2006, PG&E worked in coordination with other members of the California Utility Diversity Council to provide a three-year grant totaling more than $1.2 million to support internships for MESA students.
Sexual Harassment Prevention Training Program. In 2006, all company officers, directors and managers completed an interactive online Sexual Harassment Prevention Training program consistent with California's aggressive sexual harassment prevention training requirements. The program helps ensure that all company leaders know how to prevent unacceptable harassment from occurring in the workplace and also provides tools to help them communicate with their staff about sexual harassment.

This strategic approach to creating and maintaining a diverse, highly skilled workforce increases our success in representing the communities we serve. As of the end of 2006, PG&E employed approximately 19,700 people. Using Equal Employment Opportunity Commission (EEOC) definitions, PG&E's workforce statistics for 2004, 2005 and 2006 are presented in the following table. The statistics for 2006 are generally consistent with those from 2005.

Representation of Women and Minorities in PG&E’s Workforce, 2004–2005
EEOC Category 2004 2005 2006
Women 26% 26% 26%
Officials and Managers 26% 27% 27%
Professionals 35% 35% 36%
Technicians 16% 15% 16%
Minority 35% 35% 36%
Officials and Managers 23% 25% 26%
Professionals 36% 38% 39%
Technicians 31% 32% 32%

Comparison of PG&E’s Representation of Women and Minorities to the National Utility Average
Category PG&E National Utility Average1
Women 26% 25%
Minorities 36% 20%
1  All U.S. utility companies.

With respect to individual minority representations, PG&E's workforce statistics for 2004, 2005 and 200 are provided in the table below.

Workforce Representation
  2004 2005 2006
Asian 13% 13% 14%
Black 7% 7% 7%
Hispanic 13% 14% 14%
Native American 2% 2% 2%

Monitoring Results

PG&E is committed not only to putting in place the appropriate policies and networks to attract and retain a diverse workforce, but also to ensuring that implementation of its programs and policies is working. Both internal and external oversight help ensure that PG&E achieves its goal of encouraging diversity.

Internal Monitoring

PG&E has a long-standing commitment to maintain employment policies and practices that meet the highest legal and ethical standards of excellence. Review of our equal employment opportunity and affirmative action policies and performance is one of the roles of the Public Policy Committee of PG&E Corporation's Board of Directors. Ongoing internal oversight that results from the monitoring of our employment practices and procedures helps ensure that our actions are aligned with our high standards of ethical behavior. Reviewing our affirmative action progress, action-oriented programs and good-faith efforts provides key indicators of our compliance—not only with legal requirements but also with our own expectations. For example, PG&E develops and reviews more than 40 Affirmative Action Plans (AAPs) each year to ensure that we are pursuing the appropriate policies and programs to attract and maintain a workforce that is reflective of the communities we serve.

External Monitoring Through Government Audits

The U.S. Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) is responsible for auditing the AAP results of federal contractors, such as the Utility. The company's more than 40 AAPs are subject to potential audits by the OFCCP in any given year. In 2006, the OFCCP initiated audits of six of these AAPs. We have received satisfactory closures on all six of these compliance reviews.

Recognition for Diversity

As a result of our efforts and achievements in creating and maintaining a diverse workforce and making PG&E a great place to work, we received the following awards and recognition in 2006:

30 Best Companies for Diversity — Black Enterprise magazine
Top 30 Companies for Minorities — Fortune magazine
Corporate 100 Best Places to Work for Latinos — Hispanic magazine
Top 50 Companies for Hispanics — Hispanic Business magazine
Best Places to Work for GLBT Equality — HRC (Human Rights Campaign Foundation)