Nonprofits Welcome New Commitments

SAN FRANCISCO - PG&E Corporation (NYSE: PCG) today announced a new commitment to increase shareholder-funded charitable giving to support community nonprofit organizations. The company described its expanded program in a meeting this week with leaders of major community groups. PG&E Corporation's announcement comes as its core business, Pacific Gas and Electric Company, prepares to exit Chapter 11 in April 2004 and seeks opportunities to begin re-engaging with its communities and customers.

"After several years of challenges for our company, PG&E is pleased to be re-energizing our support for nonprofit organizations and bringing positive energy back into the California communities where we live and work," said Dan Quigley, PG&E Director of Charitable Contributions. "As we begin identifying the specific charitable projects and grants that will be funded through this new commitment, we will build on our traditional contributions programs and look for opportunities that allow us to draw not only on our financial resources, but on our expertise and skills as a major energy company."

Historically, the company has supported more than 800 local nonprofits each year, primarily in communities across Northern and Central California. Examples of past projects funded have included environmental volunteer projects with PG&E employees in Stockton, Fresno, Oakland, San Jose and other California communities; teacher training programs in San Francisco; and installation of high-efficiency refrigerators in Food Banks in San Luis Obispo, Bakersfield, Watsonville, and 10 other California cities.

"PG&E's new commitments show that its Chapter 11 emergence and improving financial health is good news at a critical time for charities in California," said Paul Ash, executive director of the San Francisco Food Bank. "This kind of support is vital to helping nonprofits meet rising demand for their services at a time when economic weakness and state budget cuts are creating substantial challenges."

The core of PG&E Corporation's new commitment is a goal to provide corporate gifts of $60 million over five years, and, on an annual basis, the higher of $12 million or 1 percent of total pre-tax earnings from operations, starting in 2005. For 2004, the company will double its charitable giving compared with 2003 levels to $7.6 million in shareholder donations.

The company aims to target 60 percent of total giving to nonprofit groups that assist low-income and underserved communities, with a goal to grow that amount over time. PG&E Corporation will increase its efforts to work with community partners to target grant-making to these organizations.

In addition to its corporate contributions program, PG&E Corporation also maintains an employee-funded workplace giving program, the annual "PG&E Corporation Campaign for the Community," which allows company employees to designate a portion of their pay to go to specific charities. In 2003, PG&E employees donated an additional $2 million through this program. The impact of these employee donations will be amplified starting in 2004 as the company is now fully funding all administrative costs associated with the program, ensuring that 100 percent of employees' contributions go to the designated charities.

As part of its expanded charitable giving initiative, the company also will report all of its charitable contributions annually on its website.

Beyond shareholder- and employee-funded contributions, the company will also continue to manage and implement various assistance programs funded through customer revenues.

In 2003, these programs provided nearly $300 million in assistance to low-income customers. The CARE program alone provided $244 million in 2003, and over its 14-year life, has provided more than $1 billion to help customers. Customer-funded assistance in 2003 also included $46 million through a program to fund home energy efficiency improvements. In addition, customers provided charitable contributions in 2003 of $1.8 million to the Salvation Army's REACH program, which pays energy bills for low-income customers unable to meet their expenses.