2008 Corporate Responsibility Report

How we are creating a smarter foundation for a sustainable future

Compliance and Ethics

PG&E has an integrated compliance program that works with all of our operating groups. With accountability as one of PG&E’s core values, the company established a Compliance Champions Committee in 2005, and its work continues today. The purpose of the committee is to identify, develop and promote the strategies necessary to establish a consistent, disciplined and sustainable process for achieving excellence in compliance management for the PG&E enterprise. The Compliance Champions program is facilitated by the Compliance and Ethics department within PG&E Corporation’s Chief Risk and Audit Officer’s organization.

Personal-conduct expectations are communicated through our values, code of conduct, annual compliance and ethics training and other messages to employees. Our code of conduct outlines our core values, describes our standards of conduct and addresses key regulatory and compliance requirements. In 2008, more than 99 percent of employees completed the annual compliance and ethics training, which is typically conducted in small groups to stimulate discussion and share experiences. The facilitated training sessions are supported by a video that portrays various compliance or ethical dilemmas employees may face. Our Compliance and Ethics department develops a new training video each year to address current issues and to respond to employees’ suggestions.

Finally, we provide opportunities for employees to ask questions and report questionable activities. PG&E’s Compliance and Ethics Helpline is available to employees, contractors and customers 24 hours a day. The Helpline handled 468 calls in 2008, which is within range of typical numbers received on the Helpline. Calls are handled confidentially, and callers can remain anonymous.

Working with our Unions

Approximately 70 percent of PG&E’s employees are covered by collective bargaining agreements with three labor unions: the International Brotherhood of Electrical Workers (IBEW) Local 1245, the Engineers and Scientists of California (ESC) IFPTE Local 20, and the Service Employees International Union (SEIU) Local 24/7.

In mid-2008, PG&E began the collective bargaining process with IBEW Local 1245 and ESC Local 20 for new agreements. During the negotiations process, union-represented employees took part in several collaborative company and union bargaining subcommittees in an effort to reach agreements that would be beneficial to all parties. The company and the IBEW reached an agreement that was ratified by IBEW-represented employees in 2008. An agreement with the ESC was ratified in early 2009. The company will conduct general negotiations with the SEIU in 2009.

PG&E’s union-represented employees continue to play an integral role in helping the company to do our work better, faster and more efficiently by providing input on numerous projects. Last year, more than 460 IBEW- and ESC-represented employees participated in 93 different employee engagement groups that included company committees and Lean Six Sigma projects. Work on more than 40 of these committees will continue into 2009.