• Consolidated net income reported under GAAP was $0.83 cents per share for PG&E Corporation’s third quarter, compared with $0.77 cents per share in the same quarter of 2007. All per-share amounts are on a diluted basis.
  
  
• Net income for the third quarter was $304 million, compared with $278 million in the same quarter of 2007.

(San Francisco) – PG&E Corporation’s (NYSE:PCG) consolidated net income reported in accordance with generally accepted accounting principles (GAAP) was $304 million, or $0.83 cents per share, in the third quarter ended September 30, 2008, compared with $278 million, or $0.77 cents per share, in the same quarter of 2007.

The year-over-year difference in earnings is due primarily to an increase of 6 cents per share in the latest quarter reflecting a higher authorized capital investment in utility subsidiary Pacific Gas and Electric Company.

“PG&E delivered solid third quarter financial results, notwithstanding the recent economic uncertainty and market volatility,” said Peter A. Darbee, Chairman, CEO and President of PG&E Corporation. “Despite the challenges in the financial markets, we have had ongoing access to capital and over the past few weeks, we have placed more than $900 million of long-term debt, which can be used to fund capital expenditures. These investments will enable us to grow our business and continue to improve services for our customers,” he said.

“Looking ahead, our target remains an 8 percent compound annual growth rate in earnings per share through 2011. This outlook assumes that the current unsettled conditions impacting the economy and capital markets will return to normal,” Darbee said. “We continue to see opportunities to build value, and we are focused on ensuring that PG&E remains well positioned to execute on its strategy in the current environment.”

EARNINGS GUIDANCE

PG&E Corporation’s previous guidance for 2008 earnings from operations is unchanged at $2.90-$3.00 per share. PG&E Corporation is reaffirming its guidance for 2009 earnings from operations in the range of $3.15-$3.25 per share.

EPS guidance for 2008 and 2009 assumes that PG&E Corporation’s Pacific Gas and Electric Company utility subsidiary maintains a ratemaking capital structure of 52 percent equity, that it maintains its CPUC- authorized return on equity of 11.35 percent and achieves at least a 12 percent return on equity on its FERC jurisdictional assets, while growing its asset base in line with its forecast, that it earns sufficient incentive revenues for energy efficiency achievements with an anticipated CPUC decision before the end of 2008, and that the Utility realizes planned operational and cost efficiencies. In addition, the targeted EPS growth rate from 2007 through 2011 assumes that a combination of additional capital expenditures beyond the level included in the Utility’s base capital expenditure forecast, energy efficiency incentive revenues, and additional operational and cost efficiencies are achieved.

PG&E Corporation discloses historical financial results and bases guidance on “earnings from operations” in order to provide a measure that allows investors to compare the underlying financial performance of the business from one period to another, exclusive of items that management believes do not reflect the normal course of operations. Earnings from operations are not a substitute or alternative for consolidated net income presented in accordance with GAAP (see the accompanying financial tables for a reconciliation of results and guidance based on earnings from operations to results and guidance based on consolidated net income in accordance with GAAP). There were no differences between earnings from operations and consolidated net income as reported in accordance with GAAP for the three month periods ended September 30, 2008 or 2007.

Supplemental Financial Information:

• In addition to the financial information accompanying this release, an expanded package of supplemental financial and operational information for the quarter will be furnished to the Securities and Exchange Commission and also will be available shortly on PG&E Corporation’s website (www.pgecorp.com).

Conference Call with the Financial Community to Discuss Results:

• Today’s call at 11:30 a.m. Eastern time is open to the public on a listen-only basis via webcast. Please visit www.pgecorp.com for more information and instructions for accessing the webcast. The call will be archived on the website. Also, a toll-free replay will be accessible shortly after the live call through 9:00 p.m. Eastern time, on November 13, 2008, by dialing 877-690-2093. International callers may dial 402-220-0648.

This press release contains forward-looking statements regarding management’s guidance for PG&E Corporation’s 2008 and 2009 earnings per share from operations and targeted compound annual growth rate for earnings per share from operations over the 2007-2011 outlook period that are based on current expectations and various assumptions which management believes are reasonable. These statements and assumptions are necessarily subject to various risks and uncertainties, the realization or resolution of which may be outside of management's control. Actual results may differ materially. Factors that could cause actual results to differ materially include:

• the Utility’s ability to manage capital expenditures and operating expenses within authorized levels and recover such costs through rates in a timely manner;
• the outcome of regulatory proceedings, including pending and future ratemaking proceedings at the California Public Utilities Commission (CPUC) and the Federal Energy Regulatory Commission;
• 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;
• the effect of weather, storms, earthquakes, fires, floods, disease, other natural disasters, explosions, accidents, mechanical breakdowns, acts of terrorism, and other events or hazards, on the Utility’s facilities and operations, its customers, and third parties on which the Utility 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 nuclear power plant, 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 it has recognized from operating efficiencies it has achieved and identify and successfully implement additional sustainable cost-saving measures;
• whether the Utility incurs substantial unanticipated 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 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 new rules of the California Independent System Operator to restructure the California wholesale electricity 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, especially given the recent deteriorating conditions in the economy and financial markets;
• 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;
• the impact of changes in federal or state tax laws, policies, or regulations, and
• other factors and risks discussed in PG&E Corporation’s and the Utility’s 2007 Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission.