April 27, 2004
ISSUED BY:   PG&E News Department (415) 973-5930


(San Francisco) - PG&E Corporation (NYSE: PCG) will announce first quarter 2004 financial results on Tuesday, May 4, 2004. A conference call with the financial community will be held that morning at 9:00 a.m. EDT (6:00 a.m. PDT) to discuss the results. The company's earnings conference call will be open to the public on a listen-only basis via webcast.

PG&E Corporation advised that its earnings from operations and consolidated net income will not include the impact of a final decision pending at the California Public Utilities Commission (CPUC) in Pacific Gas and Electric Company's 2003 General Rate Case (GRC) or an authorized attrition revenue increase for 2004 to cover the costs of new investment in energy infrastructure and inflation. A decision on these items is anticipated in the second quarter. PG&E Corporation is reaffirming its previously announced earnings guidance for 2004, which assumes the issuance of a final GRC decision affirming the settlement reached by the parties.

In 2003, the earnings-from-operations impact of the delayed GRC decision was primarily offset by income resulting from generation-related revenues that exceeded generation-related costs (referred to as headroom). However, as of January 1, 2004, Pacific Gas and Electric Company's revenues are based on the utility's authorized cost-of-service rates rather than frozen rates. As a result, the utility no longer receives headroom, and 2004 results will not include the impact of final GRC and attrition revenue decisions until they are received.

When the decision in the GRC is received, the effects will be retroactive to the beginning of 2003. A decision authorizing a 2004 attrition revenue increase would be retroactive to the beginning of 2004. The company expects to book the full effect of a final decision in these matters once it is received.

The Corporation also advised that its first quarter results will reflect the one-time, non-cash accounting effects of two regulatory assets added to Pacific Gas and Electric Company's balance sheet. The expected accounting impacts were discussed previously when the Corporation issued its fourth-quarter and year-end 2003 earnings report. The regulatory assets were authorized by the CPUC and reflected in the settlement agreement reached to resolve the financial challenges created by the energy crisis, when the company accumulated approximately $11.8 billion in undercollected costs, including costs incurred to buy power for customers, and other claims.

In accordance with generally accepted accounting principles (GAAP), the after-tax value of the regulatory assets must be shown as a one-time entry on the company's income statement, even though it does not reflect actual cash received. Instead, cash will be received over the life of the regulatory assets. The effect on reported income will be approximately $3 billion after-tax.

Please visit our website at for more information and instructions for accessing the conference call webcast. The call will be archived at Alternatively, a toll-free replay of the conference call may be accessed shortly after the live call through 9:00 p.m. EDT, May 10, 2004, by dialing 877-690-2095. International callers may dial 402-220-0642.

This press release contains forward-looking statements regarding estimated earnings for 2004. These statements are based on current expectations and assumptions which management believes are reasonable and on information currently available to management but are necessarily subject to various risks and uncertainties. Actual results could differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause future results to differ materially include:

The timing and resolution of the petitions for review that were filed in the California Court of Appeal seeking review of the CPUC's December 18, 2003 decision approving the Settlement Agreement and the CPUC's March 16, 2004 denial of applications for rehearing of the December 18, 2003 decision; and the timing and resolution of the pending appeals of the bankruptcy court's order confirming the company's plan of reorganization which became effective on April 12, 2004;

Unanticipated changes in operating expenses or capital expenditures;

The level and volatility of wholesale electricity and natural gas prices and supplies, and the Utility's ability to manage and respond to the levels and volatility successfully;

The extent to which the Utility's residual net open position (i.e., the amount of electricity the Utility needs to meet its customers' electricity demands that is not provided by Utility-owned generation, Utility power purchase contracts, or the electricity provided by the California Department of Water Resources, or DWR, and allocated to the Utility's customers) increases or decreases;

The outcome of pending litigation and rate cases, including the 2003 GRC and other regulatory proceedings;

The impact of future legislative or regulatory actions;

Increased competition; and

Other factors discussed in PG&E Corporation's and Pacific Gas and Electric Company's SEC reports.