TURNs calcuations

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					Sheet: GENERATION CAPACITY

TURN HAS ADDED ROWS 117:123 THAT SHOW THE RATE OF RETURN IN EXCESS OF PG&E'S ESTIMATE OF THE TO
THE NET PRESENT VALUE OF THESE EXCESS RETURNS (11.35% MINUS 8.50% = 2.85%) ARE THEN SUMMARIZED O

Sheet: T&D CAPACITY

TURN HAS ADDED ROWS 97-103 THAT SHOW THE RATE OF RETURN IN EXCESS OF PG&E'S ESTIMATE OF THE TOT
THESE EXCESS RETURNS (11.35% MINUS 8.50% = 2.85%) ARE THEN SUMMARIZED ON LINES 142-149


Sheet: DETAILED SUMMARY TURN calc sheet was prepared, to pull the figures from the Gen capacity and T&D capacity she
Note that on the detailed summary, TURN did not include equity returns from PPAs, because (1) TURN does not agree that the
equity capital will be required to the extent indicated by PG&E because rating agencies are far more flexible than PG&E's mech
formula and (2) even if an equity return were to be required, that return is required only to compensate for the alleged increase
in risk due to purchased power. Under the argument as to why the return is necessary, it is due to an increased cost of capital r

Sheet: OVERALL SUMMARY
New columns (columns M-Q) were added to the overall summary to show TURN's position.
The maximum incentive that could be justified based on supply side resources is 3.6% of PG&E's net benefit calculation.

While this discussion deals with the cost of equity Additionally TURN would note:

1) The incentives required would be less for Sempra, because its return in excess of the S&P is lower (around 10.7% vs. 8.5%

2) The incentives calculated using PG&E's method are highly dependent upon the load factor at which conservation is delivere
   If efficiency conserves less peak load than the utilities estimate per unit of energy, it will result in less supply-side avoidance
   Therefore, any incentive mechanism must have a significant peak component in order not to compensate utilities for resour

3) The incentives assume that 100% of new generation will be CCGT - it is probably more reasonable to assume that simple c
   (at least the reserve margin if not the entire difference between the 90% load factor CCGTs
   Because simple cycle GTs are about 40% cheaper than CCGTs ($567 vs. $939 in 2006 dollars from the MPR), incentives c
   assumed that simple cycle GTs would be built for some portion of the avoided generation.
OF PG&E'S ESTIMATE OF THE TOTAL STOCK MARKET RETURN THAT IT ESTIMATES
.85%) ARE THEN SUMMARIZED ON LINES 163-170



OF PG&E'S ESTIMATE OF THE TOTAL STOCK MARKET RETURN THAT IT ESTIMATES
D ON LINES 142-149


e Gen capacity and T&D capacity sheets.
 se (1) TURN does not agree that these
  far more flexible than PG&E's mechanistic
compensate for the alleged increase
  due to an increased cost of capital resulting from that risk.



PG&E's net benefit calculation.



S&P is lower (around 10.7% vs. 8.5%).

ctor at which conservation is delivered.
 result in less supply-side avoidance of both generation and T&D.
not to compensate utilities for resources that they do not avoid.

 reasonable to assume that simple cycle gas turbines will be built for some portion of the load

6 dollars from the MPR), incentives could be considerably less if it is
      PRESENT VALUE AS OF JULY 1, 2006 TO SHAREHOLDERS OF ALLOWED AFTER TAX AND BEFORE TAX PROFITS PG&E SHAREHOLDERS WOULD EARN IN 2006 THROUGH
      2019 ON PG&E-OWNED GENERATION AND T&D CAPACITY INVESTMENTS THAT WILL BE AVOIDED DUE TO REDUCTIONS IN ENERGY (MWhs) AND DEMAND (MWs) IN 2006
                                                   THROUGH 2019 DUE TO 2006 THROUGH 2008 CEE PROGRAMS

                                                                         Present Value [1] as of July 1, 2006 to Shareholders of    Present Value [2] as of July 1, 2006 to Shareholders of
                                                                         Allowed Before-Tax Profits PG&E Shareholders Would         Allowed After Tax Profits PG&E Shareholders Would
                                                                                      Earn in 2006 through 2019:                                 Earn in 2006 through 2019:


                                                                                                      Assuming 50% of Avoided                                        Assuming 50% of
                                                                                                        Capacity and Energy                                        Avoided Capacity and
                                                                                                         Would Be Obtained                                           Energy Would Be
                                                                          Assuming No PPAs                 Through PPAs               Assuming No PPAs            Obtained Through PPAs


    Allowed Shareholder Profits on Equity-
    Financed Portion of Generation Capacity
    Investments Avoided Due to Reductions in
[A]
    Energy (MWhs) and Demand (MWs) in 2006
    through 2019 Due to 2006 through 2008 CEE
    Programs:                                                                      $297,413,428                    $148,706,714               $247,710,692                    $123,855,346


    Allowed Shareholder Profits on Equity-
    Financed Portion of T&D Capacity
[B] Investments Avoided Due to Reductions in
    Demand (MWs) in 2006 through 2019 Due to
    2006 through 2008 CEE Programs:
                                                                                    $47,377,915                     $47,377,915                $38,621,893                     $38,621,893


    Sub-Totals, Allowed Shareholder Profits on
[C] Equity-Financed Portion of Avoided                     = [A]+[B]
    Investments in T&D and Generation Capacity:
                                                                                   $344,791,344                    $196,084,630               $286,332,585                    $162,477,239



    Allowed Shareholder Profit on Equity
[D] Imputed Due to Imputed Debt Equivalent to
    Avoided PPA Payment Obligations:
                                                                                              $0                    $29,209,384                         $0                     $29,209,384



    Grand Total, Allowed Shareholder Profits on
    Equity-Financed Portion of Avoided
    Investments in T&D and Generation Capacity
[E] plus Allowed Shareholder Profits on Equity              =[C]+[D]
    Imputed Due to Imputation of Debt
    Equivalent to Avoided PPA Payment
    Obligations:                                                                   $344,791,344                    $225,294,013               $286,332,585                    $191,686,623


                                                                            Present Value as of July 1, 2008 to Ratepayers of 2006 through 2019 Net Benefits of 2006 through 2008 CEE
                                                                                                                            programs [3]


    Net Benefits from Reductions in Demand and
[F] Energy in 2006 through 2019 Due to 2006
    through 2008 CEE Programs
                                                                                 $1,145,695,259                  $1,145,695,259             $1,145,695,259                  $1,145,695,259



    Present Value to PG&E Shareholders of
    PG&E Shareholder Profits Avoided Due to
    2006 through 2008 CEE Programs, as
[G]                                                        =([E]/[F])%           30.1%                          19.7%                       25.0%                          16.7%
    Percentage of Present Value to Ratepayers of
    Net Benefits in 2006 through 2019 Due to
    2006 through 2008 CEE Programs


    NOTES

    [1]
          Discounted at PG&E's pre-tax cost of equity:                                   19.15%

    [2]
          Discounted at PG&E's after tax cost of equity:                                 11.35%

    [3]
          Discounted at PG&E's after tax WACC:                                             7.56%
PRESENT VALUE AS OF JULY 1, 2006 TO SHAREHOLDERS OF ALLOWED AFTER TAX AND BEFORE TAX PROFITS PG&E SHAREHOLDERS WOULD EARN IN 2006 THROUGH 2019
               ON PG&E-OWNED GENERATION AND T&D CAPACITY INVESTMENTS THAT WILL BE AVOIDED DUE TO REDUCTIONS IN MWhs AND MWs IN

                                                 Present Value [1] as of July 1, 2006 to Shareholders of   Present Value [2] as of July 1, 2006 to Shareholders of
                                             Allowed Before-Tax Profits PG&E Shareholders Would Earn       Allowed After Tax Profits PG&E Shareholders Would
                                                                  in 2006 through 2019:                                 Earn in 2006 through 2019:

Allowed Shareholder Profits on Equity-
Financed Portion of Generation Capacity                                       Assuming 50% of Avoided                                   Assuming 50% of Avoided
Investments Avoided Due to Reductions in                                        Capacity and Energy                                       Capacity and Energy
Energy (MWhs) and Demand (MWs) in 2006                                           Would Be Obtained                                         Would Be Obtained
through 2019 Due to:                            Assuming No PPAs                   Through PPAs            Assuming No PPAs                  Through PPAs
                                             NOT CALCULATED
CEE 2006 Programs                                                                                                     $11,639,819                        $5,819,909
CEE 2007 Programs                                                                                                     $21,861,151                       $10,930,576
CEE 2008 Programs                                                                                                     $28,699,512                       $14,349,756
Sub-Total                                                                                                             $62,200,482                       $31,100,241



Allowed Shareholder Profits on Equity-
Financed Portion of T&D Capacity
Investments Avoided Due to Reductions in
Demand (MWs) in 2006 through 2019 Due to:

CEE 2006 Programs                                                                                                      $2,288,681                        $2,288,681
CEE 2007 Programs                                                                                                      $3,595,421                        $3,595,421
CEE 2008 Programs                                                                                                      $3,813,906                        $3,813,906
Sub-Total                                                                                                              $9,698,008                        $9,698,008

Sub-Totals, Allowed Shareholder Profits on
Equity-Financed Portion of Avoided
Investments in Generation & T&D Capacity:

CEE 2006 Programs                                                                                                     $13,928,499                        $8,108,590
CEE 2007 Programs                                                                                                     $25,456,573                       $14,525,997
CEE 2008 Programs                                                                                                     $32,513,419                       $18,163,662
Sub- Total                                                                                                            $71,898,491                       $40,798,250




10/11/20111:12 PM                                                       Page 4 of 41
PRESENT VALUE AS OF JULY 1, 2006 TO SHAREHOLDERS OF ALLOWED AFTER TAX AND BEFORE TAX PROFITS PG&E SHAREHOLDERS WOULD EARN IN 2006 THROUGH 2019
               ON PG&E-OWNED GENERATION AND T&D CAPACITY INVESTMENTS THAT WILL BE AVOIDED DUE TO REDUCTIONS IN MWhs AND MWs IN

                                                           Present Value [1] as of July 1, 2006 to Shareholders of   Present Value [2] as of July 1, 2006 to Shareholders of
                                                       Allowed Before-Tax Profits PG&E Shareholders Would Earn       Allowed After Tax Profits PG&E Shareholders Would
                                                                            in 2006 through 2019:                                 Earn in 2006 through 2019:



Allowed Shareholder Profit on Equity Imputed
Due to Imputation of Debt Equivalent to
Avoided PPA Payment Obligations:

CEE 2006 Programs                                                                                                                         $0                               $0
CEE 2007 Programs                                                                                                                         $0                               $0
CEE 2008 Programs                                                                                                                         $0                               $0
Sub- Total                                                                                                                                $0                               $0

Grand Total, Allowed Shareholder Profits
on Equity-Financed Portion of Avoided Investments in
T&D and Generation Capacity plus Allowed Shareholder
Shareholder Profits on Equity Imputed Due to
Imputation of Debt Equivalent to Avoided PPA
Payment Obligations:

CEE 2006 Programs                                                                                                               $13,928,499                        $8,108,590
CEE 2007 Programs                                                                                                               $25,456,573                       $14,525,997
CEE 2008 Programs                                                                                                               $32,513,419                       $18,163,662
Grand Total                                                                                                                     $71,898,491                       $40,798,250

NOTES

[1]
      Discounted at PG&E's pre-tax cost of equity:                          19.15%

[2]
      Discounted at PG&E's after tax cost of equity:                        11.35%




10/11/20111:12 PM                                                                 Page 5 of 41
PRESENT VALUE AS OF JULY 1, 2006 TO SHAREHOLDERS OF ALLOWED AFTER TAX AND BEFORE TAX PROFITS PG&E SHAREHOLDERS WOULD EARN IN 2006 THROUGH 2019
 ON PG&E-OWNED GENERATION AND T&D CAPACITY INVESTMENTS THAT WILL BE AVOIDED DUE TO REDUCTIONS IN MWhs AND MWs IN 2006 THROUGH 2019 DUE TO 2006
                                                          THROUGH 2008 CEE PROGRAMS

                                                 Present Value [1] as of July 1, 2006 to Shareholders of   Present Value [2] as of July 1, 2006 to Shareholders of
                                             Allowed Before-Tax Profits PG&E Shareholders Would Earn       Allowed After Tax Profits PG&E Shareholders Would
                                                                  in 2006 through 2019:                                 Earn in 2006 through 2019:

Allowed Shareholder Profits on Equity-
Financed Portion of Generation Capacity                                        Assuming 50% of Avoided                                  Assuming 50% of Avoided
Investments Avoided Due to Reductions in                                         Capacity and Energy                                      Capacity and Energy
Energy (MWhs) and Demand (MWs) in 2006                                            Would Be Obtained                                        Would Be Obtained
through 2019 Due to:                             Assuming No PPAs                   Through PPAs           Assuming No PPAs                  Through PPAs

CEE 2006 Programs                                           $60,593,734                     $30,296,867               $46,355,067                      $23,177,533
CEE 2007 Programs                                          $106,348,930                     $53,174,465               $87,061,076                      $43,530,538
CEE 2008 Programs                                          $130,470,764                     $65,235,382              $114,294,549                      $57,147,275
Sub-Total                                                  $297,413,428                    $148,706,714              $247,710,692                     $123,855,346



Allowed Shareholder Profits on Equity-
Financed Portion of T&D Capacity
Investments Avoided Due to Reductions in
Demand (MWs) in 2006 through 2019 Due to:

CEE 2006 Programs                                           $12,075,968                     $12,075,968                $9,114,571                        $9,114,571
CEE 2007 Programs                                           $17,728,219                     $17,728,219               $14,318,608                       $14,318,608
CEE 2008 Programs                                           $17,573,729                     $17,573,729               $15,188,714                       $15,188,714
Sub-Total                                                   $47,377,915                     $47,377,915               $38,621,893                       $38,621,893

Sub-Totals, Allowed Shareholder Profits on
Equity-Financed Portion of Avoided
Investments in Generation & T&D Capacity:

CEE 2006 Programs                                           $72,669,703                     $42,372,835               $55,469,638                      $32,292,105
CEE 2007 Programs                                          $124,077,149                     $70,902,684              $101,379,684                      $57,849,146
CEE 2008 Programs                                          $148,044,492                     $82,809,110              $129,483,264                      $72,335,989
Sub- Total                                                 $344,791,344                    $196,084,630              $286,332,585                     $162,477,239




10/11/20111:12 PM                                                         Page 6 of 41
PRESENT VALUE AS OF JULY 1, 2006 TO SHAREHOLDERS OF ALLOWED AFTER TAX AND BEFORE TAX PROFITS PG&E SHAREHOLDERS WOULD EARN IN 2006 THROUGH 2019
 ON PG&E-OWNED GENERATION AND T&D CAPACITY INVESTMENTS THAT WILL BE AVOIDED DUE TO REDUCTIONS IN MWhs AND MWs IN 2006 THROUGH 2019 DUE TO 2006
                                                          THROUGH 2008 CEE PROGRAMS

                                                           Present Value [1] as of July 1, 2006 to Shareholders of   Present Value [2] as of July 1, 2006 to Shareholders of
                                                       Allowed Before-Tax Profits PG&E Shareholders Would Earn       Allowed After Tax Profits PG&E Shareholders Would
                                                                            in 2006 through 2019:                                 Earn in 2006 through 2019:



Allowed Shareholder Profit on Equity Imputed
Due to Imputation of Debt Equivalent to
Avoided PPA Payment Obligations:

CEE 2006 Programs                                                              $0                      $6,213,634                         $0                       $4,435,432
CEE 2007 Programs                                                              $0                     $10,904,460                         $0                       $8,329,440
CEE 2008 Programs                                                              $0                     $12,091,290                         $0                       $9,780,747
Sub- Total                                                                     $0                     $29,209,384                         $0                      $22,545,619

Grand Total, Allowed Shareholder Profits
on Equity-Financed Portion of Avoided Investments in
T&D and Generation Capacity plus Allowed Shareholder
Shareholder Profits on Equity Imputed Due to
Imputation of Debt Equivalent to Avoided PPA
Payment Obligations:

CEE 2006 Programs                                                     $72,669,703                     $48,586,470               $55,469,638                      $36,727,536
CEE 2007 Programs                                                    $124,077,149                     $81,807,144              $101,379,684                      $66,178,586
CEE 2008 Programs                                                    $148,044,492                     $94,900,400              $129,483,264                      $82,116,736
Grand Total                                                          $344,791,344                    $225,294,013              $286,332,585                     $185,022,858

NOTES

[1]
      Discounted at PG&E's pre-tax cost of equity:                          19.15%

[2]
      Discounted at PG&E's after tax cost of equity:                        11.35%




10/11/20111:12 PM                                                                   Page 7 of 41
  ALLOWED AFTER TAX AND BEFORE TAX PROFITS PG&E SHAREHOLDERS WOULD EARN IN 2006 THROUGH 2019 ON PG&E-OWNED CCGT CAPACITY THAT WILL BE AVOIDED DUE TO
                                 REDUCTIONS IN MWhs AND MWs IN 2006 THROUGH 2019 DUE TO 2006 THROUGH 2008 CEE PROGRAMS

                           Inputs                                                   Units            Source
CCGT Annual Capacity Factor                                             90%
CCGT Installed Capital Cost ($/kW)                                    $939 2006 $/kW               2005 MPR
CCGT Construction Cost Escalation Rate                                 2.1% per year               2005 MPR
Debt % of Annual Capital Structure                                      50%                        2005 MPR
After-Tax Return on Equity                                          11.35%                         PG&E Allowed After Tax Rate of Return on Equity
Before Tax Cost of Debt                                              6.35%                         PG&E Cost of Debt
State Income Tax Rate                                                8.84%                         2005 MPR
Federal Income Tax Rate                                             35.00%                         2005 MPR
Effective Income Tax Rate                                           40.75%                         2005 MPR
Weighted Average After Tax Cost of Capital                           7.56%
Weighted Average Before Tax Cost of Capital                         12.75%
Transformer & Transmisssion Line Losses                              1.48%                         2005 MPR
Distribution Voltage Level Line Losses                               6.06%                         PG&E estimates
Required Capacity Reserve Margin                                        15%                        CPUC RA requirement decision
(Revenue Requirement) Book Life                                           30 years (SL deprec)     CPUC decision for Contra Costa 8
Life of Energy Efficiency Measures Installed in:
                                                       2006              11 years                  PG&E estimates
                                                       2007              11 years                  PG&E estimates
                                                       2008              11 years                  PG&E estimates

                                                                      2006                  2007           2008             2009          2010            2011            2012            2013            2014            2015            2016           2017       2018      2019      2020      2021

Customer-Meter Level Energy Efficiency Program Savings
(GWh):
CEE 2006 Programs                                                    338.5              677.0             677.0            677.0         677.0           677.0           677.0           677.0           677.0           677.0           677.0          338.5        0.0       0.0       0.0       0.0
CEE 2007 Programs                                                      0.0              562.5           1,125.0          1,125.0       1,125.0         1,125.0         1,125.0         1,125.0         1,125.0         1,125.0         1,125.0        1,125.0      562.5       0.0       0.0       0.0
CEE 2008 Programs                                                      0.0                0.0             630.5          1,261.0       1,261.0         1,261.0         1,261.0         1,261.0         1,261.0         1,261.0         1,261.0        1,261.0    1,261.0     630.5       0.0       0.0
Total                                                                338.5            1,239.5           2,432.5          3,063.0       3,063.0         3,063.0         3,063.0         3,063.0         3,063.0         3,063.0         3,063.0        2,724.5    1,823.5     630.5       0.0       0.0

Customer-Meter Level Energy Efficiency
Program Savings Grossed Up for Transmission
and Distribution Voltage Level Line Losses (GWh):
CEE 2006 Programs                                                     365.8              731.5             731.5            731.5         731.5           731.5           731.5           731.5           731.5           731.5           731.5          182.9        0.0       0.0       0.0       0.0
CEE 2007 Programs                                                       0.0              607.8           1,215.6          1,215.6       1,215.6         1,215.6         1,215.6         1,215.6         1,215.6         1,215.6         1,215.6        1,215.6      303.9       0.0       0.0       0.0
CEE 2008 Programs                                                       0.0                0.0             681.3          1,362.6       1,362.6         1,362.6         1,362.6         1,362.6         1,362.6         1,362.6         1,362.6        1,362.6    1,362.6     340.6       0.0       0.0
Total                                                                365.8            1,339.4           2,628.5          3,309.8       3,309.8         3,309.8         3,309.8         3,309.8         3,309.8         3,309.8         3,309.8        2,761.1    1,666.5     340.6       0.0       0.0

Equivalent Avoided CCGT Capacity plus 15% Reserve
Margin(MW):
CEE 2006 Programs                                                    106.7              106.7             106.7           106.7          106.7           106.7           106.7           106.7           106.7           106.7           106.7           26.7       0.0        0.0       0.0       0.0
CEE 2007 Programs                                                                       177.3             177.3           177.3          177.3           177.3           177.3           177.3           177.3           177.3           177.3          177.3      44.3        0.0       0.0       0.0
CEE 2008 Programs                                                                                         198.8           198.8          198.8           198.8           198.8           198.8           198.8           198.8           198.8          198.8     198.8       49.7       0.0       0.0
Total                                                                106.7              284.0             482.8           482.8          482.8           482.8           482.8           482.8           482.8           482.8           482.8          402.7     243.1       49.7       0.0       0.0

Annual Customer Meter-Level Demand Reductions Achieved
by CEE Programs (MW):                                                127.0              346.0             601.0           601.0          601.0           601.0           601.0           601.0           601.0           601.0           601.0          474.0     255.0        0.0       0.0       0.0


Annual Customer Meter-Level Demand Reductions Due to
CEE Programs, Grossed Up for Transmission & Voltage
Level Line Losses, plus 15% Reserve Margin (MW):                     157.8              430.0             746.8            746.8          746.8          746.8           746.8           746.8           746.8           746.8           746.8          589.0      316.9        0.0      0.0       0.0


Required Additional CCGT Capacity Avoided Due to Loss- &
Reserve-Adjusted Demand Reductions Achieved by CEE
Programs, After Deducting Additional CCGT Capacity
Avoided Due to MWh Reductions Due to EE Programs:                      51.1             145.9             264.1            264.1          264.1          264.1           264.1           264.1           264.1           264.1           264.1          186.3       73.8        0.0      0.0       0.0

Installed Capital Cost of New CCGT ($/kW):                           $939               $958              $979             $999         $1,020          $1,042          $1,063          $1,086          $1,109          $1,132          $1,156        $1,180     $1,205     $1,230    $1,256    $1,282

Annual Capital Expenditures ($) for:
CCGT Capacity Investments Avoided Due to 2006 EE Programs     $148,149,651                $0               $0                $0             $0             $0              $0              $0              $0              $0              $0             $0         $0        $0        $0        $0
CCGT Capacity Investments Avoided Due to 2007 EE Programs               $0      $309,825,867               $0                $0             $0             $0              $0              $0              $0              $0              $0             $0         $0        $0        $0        $0
CCGT Capacity Investments Avoided Due to 2008 EE Programs               $0                $0       ###########               $0             $0             $0              $0              $0              $0              $0              $0             $0         $0        $0        $0        $0
Total                                                         $148,149,651      $309,825,867       ###########               $0             $0             $0              $0              $0              $0              $0              $0             $0         $0        $0        $0        $0

Net Book Value of Capacity Installed in 2006:
Beginning of Year Net Book Value                                        $0      $145,680,491       ###########      $135,968,458 $131,112,442     $126,256,425    $121,400,409    $116,544,392    $111,688,376    $106,832,360    $101,976,343    $97,120,327        $0        $0        $0        $0
PLUS: Capital Expenditure for New Capacity                    $148,149,651                $0                $0                $0           $0               $0              $0              $0              $0              $0              $0             $0        $0        $0        $0        $0
LESS: Book Depreciation Expense                                 $2,469,161        $4,856,016        $4,856,016        $4,856,016   $4,856,016       $4,856,016      $4,856,016      $4,856,016      $4,856,016      $4,856,016      $4,856,016     $4,856,016        $0        $0        $0        $0
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                             $0                $0               $0                 $0           $0               $0              $0              $0              $0              $0              $0    $92,264,311        $0        $0        $0        $0
EQUALS: End of Year Net Book Value                            $145,680,491      $140,824,474       ###########      $131,112,442 $126,256,425     $121,400,409    $116,544,392    $111,688,376    $106,832,360    $101,976,343     $97,120,327             $0        $0        $0        $0        $0
Average Net Book Value                                         $72,840,245      $143,252,482       ###########      $133,540,450 $128,684,433     $123,828,417    $118,972,401    $114,116,384    $109,260,368    $104,404,352     $99,548,335    $48,560,164        $0        $0        $0        $0




           Appendix 2                                                                                                                                                                                                                                                                                     Page 8 of 41
                                                                        2006              2007          2008            2009            2010             2011           2012           2013           2014           2015           2016           2017           2018           2019   2020   2021

Net Book Value of Capacity Installed in 2007:
Beginning of Year Net Book Value                                         $0                $0    ###########   $294,506,699 $284,351,296         $274,195,892   $264,040,489   $253,885,086   $243,729,682   $233,574,279   $223,418,875   $213,263,472   $203,108,068            $0     $0     $0
PLUS: Capital Expenditure for New Capacity                               $0      $309,825,867             $0             $0           $0                   $0             $0             $0             $0             $0             $0             $0             $0            $0     $0     $0
LESS: Book Depreciation Expense                                          $0        $5,163,764    $10,155,403    $10,155,403  $10,155,403          $10,155,403    $10,155,403    $10,155,403    $10,155,403    $10,155,403    $10,155,403    $10,155,403    $10,155,403            $0     $0     $0
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                              $0                $0            $0              $0           $0                   $0             $0             $0             $0             $0             $0             $0   $192,952,665            $0     $0     $0
EQUALS: End of Year Net Book Value                                       $0      $304,662,103    ###########   $284,351,296 $274,195,892         $264,040,489   $253,885,086   $243,729,682   $233,574,279   $223,418,875   $213,263,472   $203,108,068             $0            $0     $0     $0
Average Net Book Value                                                   $0      $152,331,051    ###########   $289,428,998 $279,273,594         $269,118,191   $258,962,787   $248,807,384   $238,651,980   $228,496,577   $218,341,174   $208,185,770   $101,554,034            $0     $0     $0

Net Book Value of Capacity Installed in 2008:
Beginning of Year Net Book Value                                         $0                $0             $0   $445,358,911 $430,513,614         $415,668,317   $400,823,020   $385,977,723   $371,132,426   $356,287,129   $341,441,832   $326,596,535   $311,751,238   $296,905,941    $0     $0
PLUS: Capital Expenditure for New Capacity                               $0                $0    ###########             $0           $0                   $0             $0             $0             $0             $0             $0             $0             $0             $0    $0     $0
LESS: Book Depreciation Expense                                          $0                $0     $7,548,456    $14,845,297  $14,845,297          $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297    $0     $0
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                              $0                $0            $0              $0           $0                   $0             $0             $0             $0             $0             $0             $0             $0   $282,060,644    $0     $0
EQUALS: End of Year Net Book Value                                       $0                $0    ###########   $430,513,614 $415,668,317         $400,823,020   $385,977,723   $371,132,426   $356,287,129   $341,441,832   $326,596,535   $311,751,238   $296,905,941             $0    $0     $0
Average Net Book Value                                                   $0                $0    ###########   $437,936,263 $423,090,966         $408,245,669   $393,400,372   $378,555,075   $363,709,778   $348,864,481   $334,019,184   $319,173,886   $304,328,589   $148,452,970    $0     $0

Net Book Value of All CCGT Capacity
Installed to Replace EE MWh & MW Savings:
Beginning of Year Net Book Value                                         $0      $145,680,491    ###########   $875,834,069 $845,977,352         $816,120,635   $786,263,918   $756,407,201   $726,550,484   $696,693,768   $666,837,051   $636,980,334   $514,859,306   $296,905,941    $0     $0
PLUS: Capital Expenditure for New Capacity                     $148,149,651      $309,825,867    ###########             $0           $0                   $0             $0             $0             $0             $0             $0             $0             $0             $0    $0     $0
LESS: Book Depreciation Expense                                  $2,469,161       $10,019,781    $22,559,876    $29,856,717  $29,856,717          $29,856,717    $29,856,717    $29,856,717    $29,856,717    $29,856,717    $29,856,717    $29,856,717    $25,000,700    $14,845,297    $0     $0
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                              $0                $0            $0              $0           $0                   $0             $0             $0             $0             $0             $0    $92,264,311   $192,952,665   $282,060,644    $0     $0
EQUALS: End of Year Net Book Value                             $145,680,491      $445,486,577    ###########   $845,977,352 $816,120,635         $786,263,918   $756,407,201   $726,550,484   $696,693,768   $666,837,051   $636,980,334   $514,859,306   $296,905,941             $0    $0     $0
Average Net Book Value                                          $72,840,245      $295,583,534    ###########   $860,905,710 $831,048,993         $801,192,276   $771,335,560   $741,478,843   $711,622,126   $681,765,409   $651,908,692   $575,919,820   $405,882,624   $148,452,970    $0     $0

Equity-Financed Share of Average Net Book Value
of All CCGT Capacity Avoided Due to MWh
and MW Reductions Due to:
2006 CEE Programs                                               $36,420,123       $71,626,241    $69,198,233    $66,770,225  $64,342,217          $61,914,208    $59,486,200    $57,058,192    $54,630,184    $52,202,176    $49,774,168    $24,280,082             $0             $0    $0     $0
2007 CEE Programs                                                        $0       $76,165,526    ###########   $144,714,499 $139,636,797         $134,559,095   $129,481,394   $124,403,692   $119,325,990   $114,248,289   $109,170,587   $104,092,885    $50,777,017             $0    $0     $0
2008 CEE Programs                                                        $0                $0    ###########   $218,968,131 $211,545,483         $204,122,834   $196,700,186   $189,277,537   $181,854,889   $174,432,240   $167,009,592   $159,586,943   $152,164,295    $74,226,485    $0     $0
Average Equity-Financed Net Book Value                          $36,420,123      $147,791,767    ###########   $430,452,855 $415,524,497         $400,596,138   $385,667,780   $370,739,421   $355,811,063   $340,882,705   $325,954,346   $287,959,910   $202,941,312    $74,226,485    $0     $0

Allowed Before Tax Profits PG&E Shareholders Would
Earn on Capacity that Would Have Been Needed to
Provide MWhs and MWs Avoided in Each Year due to:
CEE 2006 Programs                                                $6,976,211       $13,719,881    $13,254,800    $12,789,720     $12,324,639       $11,859,558    $11,394,478    $10,929,397    $10,464,316     $9,999,235     $9,534,155     $4,650,807             $0             $0    $0     $0
CEE 2007 Programs                                                        $0       $14,589,373    $28,692,434    $27,719,809     $26,747,184       $25,774,559    $24,801,934    $23,829,309    $22,856,685    $21,884,060    $20,911,435    $19,938,810     $9,726,249             $0    $0     $0
CEE 2008 Programs                                                        $0                $0    $21,326,930    $41,942,962     $40,521,167       $39,099,372    $37,677,576    $36,255,781    $34,833,986    $33,412,190    $31,990,395    $30,568,600    $29,146,804    $14,217,953    $0     $0
Total                                                            $6,976,211       $28,309,254    $63,274,164    $82,452,491     $79,592,990       $76,733,489    $73,873,988    $71,014,487    $68,154,986    $65,295,485    $62,435,985    $55,158,217    $38,873,053    $14,217,953    $0     $0

Allowed After-Tax Profits PG&E Shareholders Would
Earn on Capacity that Would Have Been Needed to
Provide MWhs & MWs Avoided in Each Year due to:
CEE 2006 Programs                                                $4,133,684        $8,129,578     $7,853,999     $7,578,421      $7,302,842        $7,027,263     $6,751,684     $6,476,105     $6,200,526     $5,924,947     $5,649,368     $2,755,789             $0             $0    $0     $0
CEE 2007 Programs                                                        $0        $8,644,787    $17,001,415    $16,425,096     $15,848,776       $15,272,457    $14,696,138    $14,119,819    $13,543,500    $12,967,181    $12,390,862    $11,814,542     $5,763,191             $0    $0     $0
CEE 2008 Programs                                                        $0                $0    $12,637,059    $24,852,883     $24,010,412       $23,167,942    $22,325,471    $21,483,000    $20,640,530    $19,798,059    $18,955,589    $18,113,118    $17,270,647     $8,424,706    $0     $0
Total                                                            $4,133,684       $16,774,366    $37,492,473    $48,856,399     $47,162,030       $45,467,662    $43,773,293    $42,078,924    $40,384,556    $38,690,187    $36,995,818    $32,683,450    $23,033,839     $8,424,706    $0     $0

Allowed After-Tax Profits in Excess of S&P 500 (8.5%) due to utility having a higher ROR than the stock market as a whole that PG&E shareholders would
Earn on Capacity that Would Have Been Needed to               2.85% excess return
Provide MWhs & MWs Avoided in Each Year due to:
CEE 2006 Programs                                                    $1,037,973       $2,041,348    $1,972,150      $1,902,951    $1,833,753    $1,764,555        $1,695,357     $1,626,158     $1,556,960     $1,487,762     $1,418,564       $691,982             $0             $0    $0     $0
CEE 2007 Programs                                                            $0       $2,170,717    $4,269,078      $4,124,363    $3,979,649    $3,834,934        $3,690,220     $3,545,505     $3,400,791     $3,256,076     $3,111,362     $2,966,647     $1,447,145             $0    $0     $0
CEE 2008 Programs                                                            $0               $0    $3,173,182      $6,240,592    $6,029,046    $5,817,501        $5,605,955     $5,394,410     $5,182,864     $4,971,319     $4,759,773     $4,548,228     $4,336,682     $2,115,455    $0     $0
Total                                                                $1,037,973       $4,212,065    $9,414,410    $12,267,906    $11,842,448   $11,416,990       $10,991,532    $10,566,074    $10,140,615     $9,715,157     $9,289,699     $8,206,857     $5,783,827     $2,115,455    $0     $0


                                                                                                        PV as of 7/1/06 of Foregone
Present Value [1] as of July 1, 2006 of Allowed Before-Tax                                           Allowed Before Tax Shareholder
Profits PG&E Shareholders Would Earn on Generation                                                Profits (2006 thru 2019) as Percent of:
Capacity Investments that Will Be Avoided Due to MWh                                              of PV of Avoided Capital Expenditure
and MW Reductions in 2006 through 2019 Due to:                                               Equity Financed                   Total Capital
                                                                                            Portion of CapEx [1]              Expenditures [3]
CEE 2006 Programs                                               $60,593,734                            81.8%                          50.2%
CEE 2007 Programs                                              $106,348,930                            81.8%                          50.2%
CEE 2008 Programs                                              $130,470,764                            81.8%                          50.2%
Total                                                          $297,413,428



                                                                                                        PV as of 7/1/06 of Foregone
                                                                                                     Allowed Before Tax Shareholder
Present Value [2] as of July 1, 2006 of Allowed After-Tax                                         Profits (2006 thru 2019) as Percent of:
Profits PG&E Shareholders Would Earn on Generation                                                of PV of Avoided Capital Expenditure
Capacity Investments that Will Be Avoided Due to MWh                                         Equity Financed                        Total
and MW Reductions in 2006 through 2019 Due to:                                              Portion of CapEx [2]           Capital Expenditure [4]
CEE 2006 Programs                                               $46,355,067                            62.6%                           36.2%
CEE 2007 Programs                                               $87,061,076                            62.6%                           36.2%
CEE 2008 Programs                                              $114,294,549                            62.6%                           36.2%
Total                                                          $247,710,692



SOURCES AND NOTES



           Appendix 2                                                                                                                                                                                                                                                                                 Page 9 of 41
                                                                        2006    2007    2008   2009   2010   2011   2012   2013   2014   2015   2016   2017   2018   2019   2020   2021


[1] Discounted at PG&E's before tax cost of equity capital:                    19.15%

[2] Discounted at PG&E's after tax cost of equity capital:                     11.35%

[3] Discounted at PG&E's weighted average before tax cost of capital:          12.75%

[4] Discounted at PG&E's weighted average after tax cost of capital:           7.56%




           Appendix 2                                                                                                                                                                     Page 10 of 41
 ALLOWED AFTER TAX AND BEFORE TAX PROFITS PG&E SHAREHOLDERS WOULD EARN ON PG&E-OWNED T&D ASSETS FROM 2006 THROUGH 2019 THAT WILL BE AVOIDED DUE TO
                                   REDUCTIONS IN DEMAND IN 2006 THROUGH 2019 DUE TO 2006 THROUGH 2008 CEE PROGRAMS

                           Inputs                                                     Units            Source                                                                                                                   Avoided T&D Investment/kW (from GRC testimony)
                                                                                                                                                                                                                                                HW T&D Cost Index
                                                                                                                                                                                                                                                   [100% - (2006
                                                                                                                                                                                                                                  2007 $/kW     Index/2007 Index)%]      2006$/kW
Avoided T&D Investment ($/kW)                                 $       236.75 2006 $/kW               2007 GRC Phase 2 Ch. 3B and 4B workpapers                           Primary Distribution Investment Projects <$1million    $       84.04                 98.543% $       82.81
T&D Construction Cost Escalation Rate                                   1.4% per year                2007 GRC Phase 2 Ch. 3B and 4B workpapers                           Primary Distribution Investment Projects >$1 million   $       97.36                 98.543% $       95.94
Debt % of Annual Capital Structure                                       50%                         2005 MPR                                                                    Secondary Distribution Investment Projects     $        8.92                 98.543% $         8.79
After-Tax Return on Equity                                            11.35%                         PG&E Allowed After Tax Rate of Return on Equity                                       Transmission Investment Projects     $       49.90                 98.620% $       49.21
Before Tax Cost of Debt                                                6.35%                         PG&E Cost of Debt                                                                                                 Total    $      240.21                 98.559% $      236.75
State Income Tax Rate                                                  8.84%                         2005 MPR
Federal Income Tax Rate                                               35.00%                         2005 MPR                                                                       Transmission $/kW as % of Total T&D $/kW          20.773%                               20.786%
Effective Income Tax Rate                                             40.75%                         2005 MPR
Weighted Average After Tax Cost of Capital                             7.56%
Weighted Average Before Tax Cost of Capital                           12.75%
Transformer & Transmisssion Line Losses                                1.48%                         2005 MPR
Distribution Voltage Level Line Losses                                 6.06%                         PG&E estimates
Required Capacity Reserve Margin                                         15%                         CPUC RA requirement decision
(Revenue Requirement) Book Life                                            32 years (SL deprec)      Assuming annual T&D investments are:
Life of Energy Efficiency Measures Installed in:                                                           20.8% transmission &           79.2% distribution
                                                       2006                11 years                  PG&E estimates
                                                       2007                11 years                  PG&E estimates
                                                       2008                11 years                  PG&E estimates

                                                                         2006                 2007           2008            2009           2010               2011          2012             2013                      2014             2015                    2016           2017          2018   2019   2020   2021

Equivalent Avoided Capacity (MW):
CEE 2006 Programs                                                       127.0             127.0             127.0           127.0          127.0             127.0          127.0            127.0                     127.0            127.0                   127.0            0.0           0.0    0.0    0.0    0.0
CEE 2007 Programs                                                                         219.0             219.0           219.0          219.0             219.0          219.0            219.0                     219.0            219.0                   219.0          219.0           0.0    0.0    0.0    0.0
CEE 2008 Programs                                                                                           255.0           255.0          255.0             255.0          255.0            255.0                     255.0            255.0                   255.0          255.0         255.0    0.0    0.0    0.0
Total                                                                   127.0             346.0             601.0           601.0          601.0             601.0          601.0            601.0                     601.0            601.0                   601.0          474.0         255.0    0.0    0.0    0.0

Capital Cost of Avoided T&D ($/kW):                                     $237              $240              $244            $247            $251             $254           $258             $262                      $265             $269                    $273           $277          $281    $285   $289   $293

Annual Capital Expenditures ($) for:
T&D Capacity Investments Avoided Due to 2006 EE Programs          $30,067,483              $0                 $0               $0             $0                $0             $0              $0                        $0               $0                       $0            $0            $0     $0     $0     $0
T&D Capacity Investments Avoided Due to 2007 EE Programs                   $0     $52,595,894                 $0               $0             $0                $0             $0              $0                        $0               $0                       $0            $0            $0     $0     $0     $0
T&D Capacity Investments Avoided Due to 2008 EE Programs                   $0              $0        $62,124,412               $0             $0                $0             $0              $0                        $0               $0                       $0            $0            $0     $0     $0     $0
Total                                                             $30,067,483     $52,595,894        $62,124,412               $0             $0                $0             $0              $0                        $0               $0                       $0            $0            $0     $0     $0     $0

Net Book Value of T&D Installed in 2006:
Beginning of Year Net Book Value                                           $0     $29,597,678        $28,658,070     $27,718,461    $26,778,852        $25,839,243    $24,899,634      $23,960,025              $23,020,417       $22,080,808             $21,141,199            $0            $0     $0     $0     $0
PLUS: Capital Expenditure for New Capacity                        $30,067,483              $0                 $0              $0             $0                 $0             $0               $0                       $0                $0                      $0            $0            $0     $0     $0     $0
LESS: Book Depreciation Expense                                     $469,804        $939,609            $939,609       $939,609       $939,609           $939,609       $939,609          $939,609                $939,609          $939,609                $939,609             $0            $0     $0     $0     $0
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                                $0              $0                 $0              $0             $0                 $0             $0               $0                       $0                $0             $20,201,590            $0            $0     $0     $0     $0
EQUALS: End of Year Net Book Value                                $29,597,678     $28,658,070        $27,718,461     $26,778,852    $25,839,243        $24,899,634    $23,960,025      $23,020,417              $22,080,808       $21,141,199                      $0            $0            $0     $0     $0     $0
Average Net Book Value                                            $14,798,839     $29,127,874        $28,188,265     $27,248,656    $26,309,047        $25,369,439    $24,429,830      $23,490,221              $22,550,612       $21,611,003             $10,570,599            $0            $0     $0     $0     $0

Net Book Value of T&D Installed in 2007:
Beginning of Year Net Book Value                                          $0               $0        $51,774,084     $50,130,462    $48,486,840        $46,843,218    $45,199,597      $43,555,975              $41,912,353       $40,268,732             $38,625,110    $36,981,488           $0     $0     $0     $0
PLUS: Capital Expenditure for New Capacity                                $0      $52,595,894                 $0              $0             $0                 $0             $0               $0                       $0                $0                      $0             $0           $0     $0     $0     $0
LESS: Book Depreciation Expense                                           $0        $821,811          $1,643,622      $1,643,622     $1,643,622         $1,643,622     $1,643,622       $1,643,622               $1,643,622        $1,643,622              $1,643,622     $1,643,622           $0     $0     $0     $0
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                               $0               $0                 $0              $0             $0                 $0             $0               $0                       $0                $0                      $0    $35,337,867           $0     $0     $0     $0
EQUALS: End of Year Net Book Value                                        $0      $51,774,084        $50,130,462     $48,486,840    $46,843,218        $45,199,597    $43,555,975      $41,912,353              $40,268,732       $38,625,110             $36,981,488             $0           $0     $0     $0     $0
Average Net Book Value                                                    $0      $25,887,042        $50,952,273     $49,308,651    $47,665,029        $46,021,408    $44,377,786      $42,734,164              $41,090,543       $39,446,921             $37,803,299    $18,490,744           $0     $0     $0     $0

Net Book Value of T&D Installed in 2008:
Beginning of Year Net Book Value                                          $0                   $0             $0     $61,153,718    $59,212,330        $57,270,942    $55,329,554      $53,388,167              $51,446,779       $49,505,391             $47,564,003    $45,622,615   $43,681,227    $0     $0     $0
PLUS: Capital Expenditure for New Capacity                                $0                   $0    $62,124,412              $0             $0                 $0             $0               $0                       $0                $0                      $0             $0            $0    $0     $0     $0
LESS: Book Depreciation Expense                                           $0                   $0       $970,694      $1,941,388     $1,941,388         $1,941,388     $1,941,388       $1,941,388               $1,941,388        $1,941,388              $1,941,388     $1,941,388    $1,941,388    $0     $0     $0
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                               $0                   $0             $0              $0             $0                 $0             $0               $0                       $0                $0                      $0             $0   $41,739,839    $0     $0     $0
EQUALS: End of Year Net Book Value                                        $0                   $0    $61,153,718     $59,212,330    $57,270,942        $55,329,554    $53,388,167      $51,446,779              $49,505,391       $47,564,003             $45,622,615    $43,681,227            $0    $0     $0     $0
Average Net Book Value                                                    $0                   $0    $30,576,859     $60,183,024    $58,241,636        $56,300,248    $54,358,860      $52,417,473              $50,476,085       $48,534,697             $46,593,309    $44,651,921   $21,840,614    $0     $0     $0




 10/11/20111:12 PM                                                                                                                                                    Page 11 of 41
                                                                       2006              2007          2008            2009            2010            2011           2012             2013           2014           2015           2016          2017          2018   2019   2020   2021

Net Book Value of All T&D Investment
Installed to Replace EE MWh & MW Savings:
Beginning of Year Net Book Value                                         $0       $29,597,678   $80,432,153   $139,002,641 $134,478,022        $129,953,404   $125,428,785     $120,904,167   $116,379,549   $111,854,930   $107,330,312   $82,604,103   $43,681,227    $0     $0     $0
PLUS: Capital Expenditure for New Capacity                      $30,067,483       $52,595,894   $62,124,412             $0           $0                  $0             $0               $0             $0             $0             $0            $0            $0    $0     $0     $0
LESS: Book Depreciation Expense                                   $469,804         $1,761,420    $3,553,924     $4,524,618   $4,524,618          $4,524,618     $4,524,618       $4,524,618     $4,524,618     $4,524,618     $4,524,618    $3,585,010    $1,941,388    $0     $0     $0
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                              $0                $0         $0                $0           $0                  $0             $0               $0             $0             $0    $20,201,590   $35,337,867   $41,739,839    $0     $0     $0
EQUALS: End of Year Net Book Value                              $29,597,678       $80,432,153 ###########     $134,478,022 $129,953,404        $125,428,785   $120,904,167     $116,379,549   $111,854,930   $107,330,312    $82,604,103   $43,681,227            $0    $0     $0     $0
Average Net Book Value                                          $14,798,839       $55,014,916 ###########     $136,740,331 $132,215,713        $127,691,095   $123,166,476     $118,641,858   $114,117,239   $109,592,621    $94,967,208   $63,142,665   $21,840,614    $0     $0     $0

Equity-Financed Share of Average Net Book Value
of All CCGT & CT Capacity Avoided Due to MWh
and MW Reductions Due to:
2006 CEE Programs                                                $7,399,420       $14,563,937   $14,094,133    $13,624,328     $13,154,524      $12,684,719    $12,214,915      $11,745,110    $11,275,306    $10,805,502     $5,285,300            $0            $0    $0     $0     $0
2007 CEE Programs                                                        $0       $12,943,521   $25,476,136    $24,654,326     $23,832,515      $23,010,704    $22,188,893      $21,367,082    $20,545,271    $19,723,460    $18,901,650    $9,245,372            $0    $0     $0     $0
2008 CEE Programs                                                        $0                $0   $15,288,430    $30,091,512     $29,120,818      $28,150,124    $27,179,430      $26,208,736    $25,238,042    $24,267,348    $23,296,654   $22,325,961   $10,920,307    $0     $0     $0
Average Equity-Financed Net Book Value                           $7,399,420       $27,507,458   $54,858,698    $68,370,166     $66,107,856      $63,845,547    $61,583,238      $59,320,929    $57,058,620    $54,796,310    $47,483,604   $31,571,333   $10,920,307    $0     $0     $0

Allowed Before Tax Profits PG&E Shareholders Would
Earn on Capacity that Would Have Been Needed to
Provide MWhs and MWs Avoided in Each Year due to:
CEE 2006 Programs                                                $1,417,346        $2,789,697    $2,699,706     $2,609,716      $2,519,726       $2,429,736     $2,339,746       $2,249,755     $2,159,765     $2,069,775     $1,012,390            $0            $0    $0     $0     $0
CEE 2007 Programs                                                        $0        $2,479,309    $4,879,909     $4,722,493      $4,565,076       $4,407,660     $4,250,244       $4,092,827     $3,935,411     $3,777,994     $3,620,578    $1,770,935            $0    $0     $0     $0
CEE 2008 Programs                                                        $0                $0    $2,928,472     $5,763,976      $5,578,042       $5,392,107     $5,206,172       $5,020,238     $4,834,303     $4,648,368     $4,462,433    $4,276,499    $2,091,766    $0     $0     $0
Total                                                            $1,417,346        $5,269,005   $10,508,088    $13,096,186     $12,662,844      $12,229,503    $11,796,161      $11,362,820    $10,929,479    $10,496,137     $9,095,401    $6,047,434    $2,091,766    $0     $0     $0

Allowed After-Tax Profits PG&E Shareholders Would
Earn on Capacity that Would Have Been Needed to
Provide MWhs & MWs Avoided in Each Year due to:
CEE 2006 Programs                                                  $839,834        $1,653,007    $1,599,684      $1,546,361     $1,493,038       $1,439,716     $1,386,393       $1,333,070     $1,279,747     $1,226,424      $599,882             $0            $0    $0     $0     $0
CEE 2007 Programs                                                        $0        $1,469,090    $2,891,541      $2,798,266     $2,704,990       $2,611,715     $2,518,439       $2,425,164     $2,331,888     $2,238,613     $2,145,337    $1,049,350            $0    $0     $0     $0
CEE 2008 Programs                                                        $0                $0    $1,735,237      $3,415,387     $3,305,213       $3,195,039     $3,084,865       $2,974,692     $2,864,518     $2,754,344     $2,644,170    $2,533,997    $1,239,455    $0     $0     $0
Total                                                              $839,834        $3,122,096    $6,226,462      $7,760,014     $7,503,242       $7,246,470     $6,989,698       $6,732,925     $6,476,153     $6,219,381     $5,389,389    $3,583,346    $1,239,455    $0     $0     $0

Allowed After-Tax Profits in Excess of S&P 500 (8.5%) due to utility having a higher ROR than the stock market as a whole that PG&E shareholders would
Earn on Capacity that Would Have Been Needed to               2.85% excess return
Provide MWhs & MWs Avoided in Each Year due to:
CEE 2006 Programs                                                     $210,883         $415,072      $401,683       $388,293      $374,904       $361,515        $348,125          $334,736      $321,346       $307,957       $150,631            $0            $0     $0     $0     $0
CEE 2007 Programs                                                           $0         $368,890      $726,070       $702,648      $679,227       $655,805        $632,383          $608,962      $585,540       $562,119       $538,697      $263,493            $0     $0     $0     $0
CEE 2008 Programs                                                           $0               $0      $435,720       $857,608      $829,943       $802,279        $774,614          $746,949      $719,284       $691,619       $663,955      $636,290      $311,229     $0     $0     $0
Total                                                                 $210,883         $783,963    $1,563,473      $1,948,550    $1,884,074    $1,819,598       $1,755,122       $1,690,646     $1,626,171     $1,561,695     $1,353,283     $899,783      $311,229     $0     $0     $0


                                                                                                       PV as of 7/1/06 of Foregone
Present Value [1] as of July 1, 2006 of Allowed Before-Tax                                          Allowed Before Tax Shareholder
Profits PG&E Shareholders Would Earn on T&D Capacity                                             Profits (2006 thru 2019) as Percent of:
Investments that Will Be Avoided Due to MWh                                                      of PV of Avoided Capital Expenditure
and MW Reductions in 2006 through 2019 Due to:                                              Equity Financed                   Total Capital
                                                                                           Portion of CapEx [1]             Expenditures [3]
CEE 2006 Programs                                               $12,075,968                           80.3%                          48.8%
CEE 2007 Programs                                               $17,728,219                           80.3%                          48.8%
CEE 2008 Programs                                               $17,573,729                           80.3%                          48.8%
Total                                                           $47,377,915



                                                                                                       PV as of 7/1/06 of Foregone
                                                                                                    Allowed Before Tax Shareholder
Present Value [2] as of July 1, 2006 of Allowed After-Tax                                        Profits (2006 thru 2019) as Percent of:
Profits PG&E Shareholders Would Earn on T&D Capacity                                             of PV of Avoided Capital Expenditure
Investments that Will Be Avoided Due to MWh                                                 Equity Financed                        Total
and MW Reductions in 2006 through 2019 Due to:                                             Portion of CapEx [2]           Capital Expenditure [4]
CEE 2006 Programs                                                $9,114,571                           60.6%                           34.8%
CEE 2007 Programs                                               $14,318,608                           60.6%                           34.8%
CEE 2008 Programs                                               $15,188,714                           60.6%                           34.8%
Total                                                           $38,621,893



SOURCES AND NOTES

[1] Discounted at PG&E's before tax cost of equity capital:                            19.15%



 10/11/20111:12 PM                                                                                                                                             Page 12 of 41
                                                                        2006     2007   2008   2009   2010   2011          2012     2013   2014   2015   2016   2017   2018   2019   2020   2021

[2] Discounted at PG&E's after tax cost of equity capital:                     11.35%

[3] Discounted at PG&E's weighted average before tax cost of capital:          12.75%

[4] Discounted at PG&E's weighted average after tax cost of capital:           7.56%




 10/11/20111:12 PM                                                                                                  Page 13 of 41
 Equity Return Adjustment for Debt Equivalent to PPAs for 50% of Capacity Avoided Due to Impacts of 2006 CEE Programs

 S&P's Discount Rate                                              10.0%
 S&P Risk Factor                                                  30.0%
 Target Debt Ratio                                                50.0%    2005 MPR
 Cost of Equity                                                  12.68%    2005 MPR
 Cost of Debt                                                     8.03%    2005 MPR
 Rate of Return                                                  10.36%    2005 MPR
 State Income Tax Rate                                            8.84%
 Federal Income Tax Rate                                         35.00%
 Effective Income Tax Rate                                       40.75%
 After- Tax WACC                                                  8.72%    2005 MPR
 Net to Gross Tax Multiplier                                       1.688

 PG&E's cost of capital
 Target Debt Ratio                                                50.0%
 Cost of Equity                                                  11.35% Authorized ROE
 Cost of Debt                                                     6.35% 30 yr Marginal cost of debt - B&MM June 9
 Rate of Return                                                   8.85%
 After- Tax WACC                                                  7.56%
 Before-Tax WACC                                                 12.75%
                                                                                    1                     2            3            4          5          6          7          8          9         10         11        12
 ($000)                                                                          2006                  2007         2008         2009       2010       2011       2012       2013       2014       2015       2016      2017

 Plant C- Capex (50% PPA /50% Generation) ($000)                                 74,075
 Levelized Revenue Requirements ($000)                                            5,399            10,798        10,798         10,798     10,798     10,798     10,798     10,798     10,798     10,798     10,798     5,399
 Total Revenue Requirements/(Capacity Payments) ($000)                          $5,399           $10,798       $10,798        $10,798    $10,798    $10,798    $10,798    $10,798    $10,798    $10,798    $10,798    $5,399


 Debt Equivanlence and RR impact
 NPV of RR for 11 years @ S&P Discount Rate ($000)             10.0%           $71,747           $72,982       $68,403        $63,366    $57,825    $51,730    $45,025    $37,650    $29,538    $20,614    $10,798    $5,399
 Risk Weighting ($000)                                          30%            $21,524           $21,895       $20,521        $19,010    $17,347    $15,519    $13,508    $11,295     $8,861     $6,184     $3,239    $1,620
 Incremental Equity Required ($000)                            (1-.50)         $10,762           $10,947       $10,260         $9,505     $8,674     $7,759     $6,754     $5,648     $4,431     $3,092     $1,620      $810
 Net impact on Before-Tax Revenue Requirements ($000)           1.688           $1,439            $1,464        $1,372         $1,271     $1,160     $1,038       $903       $755       $592       $413       $217      $108
 Net Impact on After Tax Revenue Requirements ($000)                              $853              $867          $813           $753       $687       $615       $535       $447       $351       $245       $128       $64

 PV as of 7/1/2006 of Before Tax Equity Return Revenue
 Requirements Discounted at Before Tax Cost of Equity ($000)   19.15%           $6,214

 PV as of 7/1/2006 of After Tax Equity Return Revenue
 Requirements Discounted at After Tax Cost of Equity ($000)    11.35%           $4,435




10/11/20111:12 PM                                                                                             Page 14 of 41
Equity Return Adjustment for Debt Equivalent to PPAs for 50% of Capacity Avoided Due to Impacts of 2007 CEE Programs

S&P's Discount Rate                                            10.0%
S&P Risk Factor                                                30.0%
Target Debt Ratio                                              50.0%    2005 MPR
Cost of Equity                                                12.68%    2005 MPR
Cost of Debt                                                   8.03%    2005 MPR
Rate of Return                                               10.355%    2005 MPR
State Income Tax Rate                                          8.84%
Federal Income Tax Rate                                       35.00%
Effective Income Tax Rate                                     40.75%
After- Tax WACC                                                8.72%    2005 MPR
Net to Gross Tax Multiplier                                     1.688

PG&E's cost of capital
Target Debt Ratio                                              50.0%
Cost of Equity                                                11.35% Authorized ROE
Cost of Debt                                                   6.35% 30 yr Marginal cost of debt - B&MM June 9
Rate of Return                                                 8.85%
After- Tax WACC                                                7.56%
Before-Tax WACC                                               12.75%

($000)                                                                      2006               2007          2008          2009       2010        2011        2012       2013       2014       2015       2016       2017       2018

Plant A- Capex(50% PPA/50% Generation) ($000)                                               154,913
Levelized Revenue Requirements ($000)                                                        11,291        22,581        22,581      22,581      22,581      22,581     22,581     22,581     22,581     22,581     22,581     11,291
Total Revenue Requirements/(Capacity Payments) ($000)                                      $11,291       $22,581       $22,581     $22,581     $22,581     $22,581    $22,581    $22,581    $22,581    $22,581    $22,581    $11,291


Debt Equivalence and RR impact
NPV of RR for 11 years @ S&P Discount Rate ($000)            10.0%                        $150,044      $152,628      $143,052    $132,517    $120,929    $108,183    $94,162    $78,738    $61,772    $43,110    $22,581    $11,291
Risk Weighting ($000)                                         30%                          $45,013       $45,789       $42,916     $39,755     $36,279     $32,455    $28,248    $23,621    $18,532    $12,933     $6,774     $3,387
Incremental Equity Required ($000)                           (1-.50)                       $22,507       $22,894       $21,458     $19,878     $18,139     $16,227    $14,124    $11,811     $9,266     $6,467     $3,387     $1,694
Net impact on Before-Tax Revenue Requirements ($000)          1.688                         $3,009        $3,061        $2,869      $2,658      $2,425      $2,170     $1,888     $1,579     $1,239      $865       $453       $226

Net Impact on After Tax Revenue Requirements ($000)                                         $1,783        $1,814        $1,700      $1,575      $1,437      $1,286     $1,119      $936       $734       $512       $268       $134
PV as of 7/1/2006 of Before Tax Equity Return Revenue
Requirements Discounted at Before Tax Cost of Equity
($000)                                                       19.15%      $10,904

PV as of 7/1/2006 of After Tax Equity Return Revenue
Requirements Discounted at After Tax Cost of Equity ($000)   11.35%       $8,329




10/11/20111:12 PM                                                                                                Page 15 of 41
Equity Return Adjustment for Debt Equivalent to PPAs for 50% of Capacity Avoided Due to Impacts of 2008 CEE Programs

S&P's Discount Rate                                                   10.0%
S&P Risk Factor                                                       30.0%
Target Debt Ratio                                                     50.0%    2005 MPR
Cost of Equity                                                       12.68%    2005 MPR
Cost of Debt                                                          8.03%    2005 MPR
Rate of Return                                                       10.36%    2005 MPR
State Income Tax Rate                                                 8.84%
Federal Income Tax Rate                                              35.00%
Effective Income Tax Rate                                            40.75%
After- Tax WACC                                                       8.72%    2005 MPR
Net to Gross Tax Multiplier                                            1.688

PG&E's cost of capital
Target Debt Ratio                                                     50.0%
Cost of Equity                                                       11.35% Authorized ROE
Cost of Debt                                                          6.35% 30 yr Marginal cost of debt - B&MM June 9
Rate of Return                                                        8.85%
After- Tax WACC                                                       7.56%
Before-Tax WACC                                                      12.75%                                   1               2            3           4           5           6           7          8          9         10         11         12

($000)                                                                             2006     2007          2008             2009         2010        2011        2012        2013        2014       2015       2016       2017       2018       2019


Plant B- Capex (50% PPA/50% Generation) ($000)                                                         226,454
Levelized Revenue Requirements ($000)                                                                   16,505            33,010       33,010      33,010      33,010      33,010      33,010     33,010     33,010     33,010     33,010     16,505
Total Revenue Requirements/(Capacity Payments) ($000)                                                 $16,505           $33,010      $33,010     $33,010     $33,010     $33,010     $33,010    $33,010    $33,010    $33,010    $33,010    $16,505


Debt Equivanlence and RR impact
NPV of RR for 11 years @ S&P Discount Rate ($000)                   10.0%                            $206,609      $209,115         $193,716    $176,776    $158,143    $137,647    $115,100    $90,300    $63,019    $33,010    $33,010    $16,505
Risk Weighting ($000)                                                30%                              $61,983       $62,734          $58,115     $53,033     $47,443     $41,294     $34,530    $27,090    $18,906     $9,903     $9,903     $4,951
Incremental Equity Required ($000)                                  (1-.50)                           $30,991       $31,367          $29,057     $26,516     $23,721     $20,647     $17,265    $13,545     $9,453     $4,951     $4,951     $2,476
Net impact on Before-Tax Revenue Requirements ($000)                 1.688                             $4,144        $4,194           $3,885      $3,545      $3,172      $2,761      $2,308     $1,811     $1,264       $662       $662       $331

Net Impact on After Tax Revenue Requirements ($000)                                                     $2,455           $2,485       $2,302      $2,101      $1,879      $1,636      $1,368     $1,073      $749       $392       $392       $196

PV as of 7/1/2006 of Before Tax Equity Return Revenue
Requirements Discounted at Before Tax Cost of Equity ($000)          19.15%     $12,091

PV as of 7/1/2006 of After Tax Equity Return Revenue Requirements
Discounted at After Tax Cost of Equity ($000)                        11.35%      $9,781




10/11/20111:12 PM                                                                                                   Page 16 of 41
                         2006
            Maximum Demand Reduction            120.17 MWs
            Total Hours                           8760 per year
            Reductions in Energy           677,181.34 MWhs
            Equiv Annual Capacity Factor         0.64

                                              Jan         Feb       Mar       Apr       May                                   Jun         Jul         Aug          Sep           Oct       Nov             Dec
            Average of 5x8                      99.56      101.81    103.63    106.53     96.57                                103.66      109.76      107.98       101.06         94.18     99.20           99.82
            Average of 6x16                     88.50       89.87     91.57     92.28     87.41                                 92.69       95.68       95.75        89.38         85.77     88.03           87.50
            Average of 7x24                     75.66       76.95     78.20     78.28     75.33                                 79.02       81.63       81.33        76.84         73.56     75.76           75.07

            %CF of 5x8                           0.83        0.85     0.86      0.89      0.80                                  0.86          0.91      0.90           0.84         0.78     0.83            0.83
            %CF of 6x16                          0.74        0.75     0.76      0.77      0.73                                  0.77          0.80      0.80           0.74         0.71     0.73            0.73
            %CF of 7x24                          0.63        0.64     0.65      0.65      0.63                                  0.66          0.68      0.68           0.64         0.61     0.63            0.62




                                                                                                                                              DEMAND REDUCTION DURATION CURVE
                                                          100%         120
                                                          95%          107
                                                          90%          104                                                                                      Percent of Hours in Year
                                                          85%          103                                               140
                                                          80%          101




                                                                                             Reduction in Demand (MWs)
                                                          75%           99                                               120
                                                          70%           96
                                                          65%           94                                               100
                                                          60%           81
                                                                                                                          80
                                                          55%           72
                                                          50%           69                                                60
                                                          45%           67
                                                          40%           64                                                40
                                                          35%           63
                                                          30%           60                                                20
                                                          25%           59
                                                                                                                          -
                                                          20%           58
                                                                                                                              100%      90%     80%    70%       60%      50%      40%     30%       20%      10%    0%
                                                          15%           56
                                                          10%           55
                                                           5%           54
                                                           0%           52



10/11/20111:12 PM                                                                           Page 17 of 41
                       2007
          Maximum Demand Reduction              216.79 MWs
          Total Hours                             8760 per year
          Reductions in Energy           1,126,366.11 MWhs
          Equiv Annual Capacity Factor           0.59

                                            Jan           Feb       Mar       Apr       May                                   Jun         Jul         Aug          Sep           Oct       Nov             Dec
          Average of 5x8                       160.69      164.96    168.15    174.56    163.13                                181.62      196.89      191.69       174.52        157.44    160.49          161.11
          Average of 6x16                      143.37      145.65    146.87    152.63    146.62                                158.29      169.45      166.93       151.69        142.87    142.47          141.40
          Average of 7x24                      123.37      124.79    125.89    128.78    126.03                                134.32      142.71      140.55       129.18        122.91    122.68          121.43

          %CF of 5x8                             0.74        0.76     0.78      0.81      0.75                                  0.84          0.91      0.88           0.81         0.73     0.74            0.74
          %CF of 6x16                            0.66        0.67     0.68      0.70      0.68                                  0.73          0.78      0.77           0.70         0.66     0.66            0.65
          %CF of 7x24                            0.57        0.58     0.58      0.59      0.58                                  0.62          0.66      0.65           0.60         0.57     0.57            0.56




                                                                                                                                              DEMAND REDUCTION DURATION CURVE
                                                          100%         217
                                                          95%          184
                                                          90%          175                                                                                      Percent of Hours in Year
                                                          85%          169                                               250
                                                          80%          166




                                                                                             Reduction in Demand (MWs)
                                                          75%          162
                                                          70%          158                                               200
                                                          65%          155
                                                          60%          142                                               150
                                                          55%          123
                                                          50%          114
                                                          45%          110                                               100
                                                          40%          106
                                                          35%          103                                                50
                                                          30%          100
                                                          25%           97
                                                                                                                          -
                                                          20%           94
                                                                                                                              100%      90%     80%    70%       60%      50%      40%     30%       20%      10%    0%
                                                          15%           92
                                                          10%           89
                                                           5%           88
                                                           0%           85



10/11/20111:12 PM                                                                          Page 18 of 41
                                 2008
                    Maximum Demand Reduction           262.88 MWs
                    Total Hours                          8784 per year
                    Reductions in Energy           1,266,198 MWhs
                    Equiv Annual Capacity Factor        0.55

                                                   Jan 2008    Feb 2008    Mar 2008    Apr 2008    May 2008                          Jun 2008        Jul 2008     Aug 2008    Sep 2008       Oct 2008    Nov 2008    Dec 2008
                    Average of 5x8                       175        180          185         193        186                                213             237         227          201            177        175          175
                    Average of 6x16                      157        160          161         168        165                                185             201         193          175            160        153          156
                    Average of 7x24                      135        137          137         143        141                                155             168         161          148            137        132          135
                    Average of SP1                       179        186          190         200        195                                228             256         246          213            183        180          179
                    Average of SP7                       175        180          184         191        184                                211             235         225          199            177        175          175
                    Average of SH                        143        145          145         151        151                                164             174         170          156            147        139          142
                    Average of OP                        113        111          112         114        120                                126             141         130          125            112        113          113
                    Average of SOP                        98         98           98          99         99                                101             105         102           99             97         98           97
                    Average of Peak                      157        160          161         168        165                                185             201         193          175            160        153          156
                    Average of Off-Peak                  107        106          107         108        112                                117             127         120          115            106        108          107

                    Sum of 5x8                       30,851       30,306     31,023      33,889      31,184                                35,866      41,771       38,188       33,724        32,648      26,641          30,844
                    Sum of 6x16                      65,171       63,849     66,891      70,072      68,517                                73,970      83,516       80,391       69,887        69,171      58,941          64,988
                    Sum of 7x24                     100,293       95,277    101,967     102,879     105,233                               111,291     125,290      119,666      106,835       102,278      95,094         100,096
                    Sum of SP1                        3,942        3,897      3,995       4,399       4,101                                 4,783       5,640        5,166        4,467         4,218       3,426           3,945
                    Sum of SP7                       26,909       26,409     27,028      29,490      27,083                                31,083      36,132       33,022       29,257        28,430      23,214          26,899
                    Sum of SH                        34,320       33,543     35,868      36,183      37,334                                38,104      41,745       42,203       36,163        36,523      32,300          34,144
                    Sum of OP                        22,987       20,018     22,876      20,956      24,485                                25,196      28,755       26,594       25,095        21,132      24,449          23,042
                    Sum of SOP                       12,135       11,409     12,200      11,851      12,231                                12,124      13,020       12,680       11,853        11,976      11,704          12,067
                    Sum of Peak                      65,171       63,849     66,891      70,072      68,517                                73,970      83,516       80,391       69,887        69,171      58,941          64,988
                    Sum of Off-Peak                  35,121       31,427     35,076      32,807      36,715                                37,320      41,774       39,274       36,948        33,108      36,153          35,109

                    %CF of 5x8                          0.67        0.69        0.70        0.73       0.71                                  0.81         0.90        0.86          0.76          0.67       0.67            0.67
                    %CF of 6x16                         0.60        0.61        0.61        0.64       0.63                                  0.70         0.76        0.74          0.66          0.61       0.58            0.59
                    %CF of 7x24                         0.51        0.52        0.52        0.54       0.54                                  0.59         0.64        0.61          0.56          0.52       0.50            0.51
                    %CF of SP1                          0.68        0.71        0.72        0.76       0.74                                  0.87         0.98        0.94          0.81          0.70       0.69            0.68
                    %CF of SP7                          0.66        0.68        0.70        0.73       0.70                                  0.80         0.89        0.85          0.76          0.67       0.66            0.66
                    %CF of SH                           0.54        0.55        0.55        0.57       0.57                                  0.62         0.66        0.65          0.59          0.56       0.53            0.54
                    %CF of OP                           0.43        0.42        0.43        0.43       0.46                                  0.48         0.54        0.50          0.48          0.43       0.43            0.43
                    %CF of SOP                          0.37        0.37        0.37        0.38       0.38                                  0.38         0.40        0.39          0.38          0.37       0.37            0.37
                    %CF of Peak                         0.60        0.61        0.61        0.64       0.63                                  0.70         0.76        0.74          0.66          0.61       0.58            0.59
                    %CF of Off-Peak                     0.41        0.40        0.41        0.41       0.43                                  0.44         0.48        0.46          0.44          0.40       0.41            0.41

                                                                                                                                                           DEMAND REDUCTION DURATION CURVE
                                                                 100%           263
                                                                  95%           213
                                                                  90%           198
                                                                  85%           188                                                                                          Percent of Hours in Year
                                                                  80%           183
                                                                                                                                     300
                                                                  75%           180




                                                                                                         Reduction in Demand (MWs)
                                                                  70%           176
                                                                                                                                     250
                                                                  65%           171
                                                                  60%           163                                                  200
                                                                  55%           139
                                                                  50%           128                                                  150
                                                                  45%           122
                                                                  40%           118                                                  100
                                                                  35%           114
                                                                  30%           110                                                   50
                                                                  25%           107
                                                                                                                                      -
                                                                  20%           104
                                                                                                                                          100%      90%     80%      70%      60%      50%       40%      30%       20%       10%   0%
                                                                  15%           102
                                                                  10%            99
                                                                   5%            97
                                                                   0%            94




10/11/20111:12 PM                                                                                        Page 19 of 41
ALLOWED AFTER TAX AND BEFORE TAX PROFITS PG&E SHAREHOLDERS WOULD EARN IN 2006 THROUGH 2019
 ON PG&E-OWNED CCGT CAPACITY THAT WILL BE AVOIDED DUE TO REDUCTIONS IN MWhs AND MWs IN 2006
                    THROUGH 2019 DUE TO 2006 THROUGH 2008 CEE PROGRAMS

                           Inputs                                         Units                Source
CCGT Annual Capacity Factor                                   90%
CCGT Installed Capital Cost ($/kW)                          $939 2006 $/kW                2005 MPR
CCGT Construction Cost Escalation Rate                       2.1% per year                2005 MPR
Debt % of Annual Capital Structure                            50%                         2005 MPR
                                                                                          PG&E Allowed After
                                                                                          Tax Rate of Return
After-Tax Return on Equity                                 11.35%                         on Equity
Before Tax Cost of Debt                                     0.00%                         PG&E Cost of Debt
State Income Tax Rate                                       8.84%                         2005 MPR
Federal Income Tax Rate                                    35.00%                         2005 MPR
Effective Income Tax Rate                                  40.75%                         2005 MPR
Weighted Average After Tax Cost of Capital                  5.68%
Weighted Average Before Tax Cost of Capital                 9.58%
Transformer & Transmisssion Line Losses                     1.48%                   2005 MPR
Distribution Voltage Level Line Losses                      6.06%                   PG&E estimates
                                                                                    CPUC RA
                                                                                    requirement
Required Capacity Reserve Margin                             15%                    decision
                                                                                    CPUC decision for
(Revenue Requirement) Book Life                                30 years (SL deprec) Contra Costa 8
Life of Energy Efficiency Measures Installed in:
                                                    2006       11 years                   PG&E estimates
                                                    2007       11 years                   PG&E estimates
                                                    2008       11 years                   PG&E estimates

                                                             2006                 2007                  2008

Customer-Meter Level Energy Efficiency Program Savings
(GWh):
CEE 2006 Programs                                          338.5               677.0                   677.0
CEE 2007 Programs                                            0.0               562.5                 1,125.0
CEE 2008 Programs                                            0.0                 0.0                   630.5
Total                                                      338.5             1,239.5                 2,432.5

Customer-Meter Level Energy Efficiency
Program Savings Grossed Up for Transmission
and Distribution Voltage Level Line Losses (GWh):
CEE 2006 Programs                                           365.8               731.5                   731.5
CEE 2007 Programs                                             0.0               607.8                 1,215.6
CEE 2008 Programs                                             0.0                 0.0                   681.3
Total                                                      365.8             1,339.4                 2,628.5

Equivalent Avoided CCGT Capacity plus 15% Reserve
Margin(MW) as simple cycle GT:
CEE 2006 Programs                                          106.7              106.7                   106.7
CEE 2007 Programs                                                             177.3                   177.3
CEE 2008 Programs                                                                                     198.8
Total                                                      106.7              284.0                   482.8

Annual Customer Meter-Level Demand Reductions Achieved
by CEE Programs (MW):                                      127.0              346.0                   601.0


Annual Customer Meter-Level Demand Reductions Due to
CEE Programs, Grossed Up for Transmission & Voltage
Level Line Losses, plus 15% Reserve Margin (MW):            157.8                 430.0                746.8
Required Additional CCGT Capacity Avoided Due to Loss- &
Reserve-Adjusted Demand Reductions Achieved by CEE
Programs, After Deducting Additional CCGT Capacity
Avoided Due to MWh Reductions Due to EE Programs:                     51.1          145.9          264.1
                                                                    157.82            253            371

Installed Capital Cost of New CCGT ($/kW):                           $939           $958           $979

Annual Capital Expenditure ($) for:
CCGT Capacity Avoided Due to 2006 EE Programs                 $148,149,651             $0             $0
CCGT Capacity Avoided Due to 2007 EE Programs                           $0   $309,825,867             $0
CCGT Capacity Avoided Due to 2008 EE Programs                           $0             $0   $452,907,367
Total                                                         $148,149,651   $309,825,867   $452,907,367

Net Book Value of Capacity Installed in 2006:
Beginning of Year Net Book Value                                        $0   $145,680,491   $140,824,474
PLUS: Capital Expenditure for New Capacity                    $148,149,651             $0             $0
LESS: Book Depreciation Expense                                 $2,469,161     $4,856,016     $4,856,016
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                             $0             $0             $0
EQUALS: End of Year Net Book Value                            $145,680,491   $140,824,474   $135,968,458
Average Net Book Value                                         $72,840,245   $143,252,482   $138,396,466

Net Book Value of Capacity Installed in 2007:
Beginning of Year Net Book Value                                       $0              $0   $304,662,103
PLUS: Capital Expenditure for New Capacity                             $0    $309,825,867             $0
LESS: Book Depreciation Expense                                        $0      $5,163,764    $10,155,403
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                            $0              $0             $0
EQUALS: End of Year Net Book Value                                     $0    $304,662,103   $294,506,699
Average Net Book Value                                                 $0    $152,331,051   $299,584,401

Net Book Value of Capacity Installed in 2008:
Beginning of Year Net Book Value                                       $0             $0              $0
PLUS: Capital Expenditure for New Capacity                             $0             $0    $452,907,367
LESS: Book Depreciation Expense                                        $0             $0      $7,548,456
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                            $0             $0              $0
EQUALS: End of Year Net Book Value                                     $0             $0    $445,358,911
Average Net Book Value                                                 $0             $0    $222,679,456

Net Book Value of All CCGT Capacity
Installed to Replace EE MWh & MW Savings:
Beginning of Year Net Book Value                                        $0   $145,680,491   $445,486,577
PLUS: Capital Expenditure for New Capacity                    $148,149,651   $309,825,867   $452,907,367
LESS: Book Depreciation Expense                                 $2,469,161    $10,019,781    $22,559,876
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                             $0             $0             $0
EQUALS: End of Year Net Book Value                            $145,680,491   $445,486,577   $875,834,069
Average Net Book Value                                         $72,840,245   $295,583,534   $660,660,323

Equity-Financed Share of Average Net Book Value
of All CCGT Capacity Avoided Due to MWh
and MW Reductions Due to:
2006 CEE Programs                                              $36,420,123    $71,626,241    $69,198,233
2007 CEE Programs                                                       $0    $76,165,526   $149,792,200
2008 CEE Programs                                                       $0             $0   $111,339,728
Average Equity-Financed Net Book Value                         $36,420,123   $147,791,767   $330,330,161

Allowed Before Tax Profits PG&E Shareholders Would
Earn on Capacity that Would Have Been Needed to
Provide MWhs and MWs Avoided in Each Year due to:
CEE 2006 Programs                                               $6,976,211    $13,719,881    $13,254,800
CEE 2007 Programs                                                       $0    $14,589,373    $28,692,434
CEE 2008 Programs                                                       $0             $0    $21,326,930
Total                                                           $6,976,211    $28,309,254    $63,274,164
Allowed After-Tax Profits PG&E Shareholders Would
Earn on Capacity that Would Have Been Needed to
Provide MWhs & MWs Avoided in Each Year due to:
CEE 2006 Programs                                           $4,133,684    $8,129,578        $7,853,999
CEE 2007 Programs                                                   $0    $8,644,787       $17,001,415
CEE 2008 Programs                                                   $0            $0       $12,637,059
Total                                                       $4,133,684   $16,774,366       $37,492,473

AFTER TAX PROFITS IN EXCESS OF PG&E'S ESTIMATE FOR STOCK MARKET (8.5%) (Amount that PG&E earns more than overall market) 2.85%.
CEE 2006 Programs                                      $1,037,973     $2,041,348        $1,972,150
CEE 2007 Programs                                              $0     $2,170,717        $4,269,078
CEE 2008 Programs                                              $0             $0        $3,173,182
Total                                                  $1,037,973     $4,212,065        $9,414,410


SOURCES AND NOTES


                                                                  2006          2007              2008
 Annual Shares of Levelized Annual Revenue Requirement
for PPA Providing Capacity Equivalent to Capacity Avoided
in Each Year Due to
CEE 2006 Programs                                                 50%           100%             100%
CEE 2007 Programs                                                                50%             100%
CEE 2008 Programs                                                                                 50%
   2009       2010       2011       2012       2013       2014       2015       2016       2017       2018     2019    2020   2021




  677.0      677.0      677.0      677.0      677.0      677.0      677.0      677.0      338.5        0.0      0.0    0.0    0.0
1,125.0    1,125.0    1,125.0    1,125.0    1,125.0    1,125.0    1,125.0    1,125.0    1,125.0      562.5      0.0    0.0    0.0
1,261.0    1,261.0    1,261.0    1,261.0    1,261.0    1,261.0    1,261.0    1,261.0    1,261.0    1,261.0    630.5    0.0    0.0
3,063.0    3,063.0    3,063.0    3,063.0    3,063.0    3,063.0    3,063.0    3,063.0    2,724.5    1,823.5    630.5    0.0    0.0




   731.5      731.5      731.5      731.5      731.5      731.5      731.5      731.5      182.9        0.0      0.0    0.0    0.0
 1,215.6    1,215.6    1,215.6    1,215.6    1,215.6    1,215.6    1,215.6    1,215.6    1,215.6      303.9      0.0    0.0    0.0
 1,362.6    1,362.6    1,362.6    1,362.6    1,362.6    1,362.6    1,362.6    1,362.6    1,362.6    1,362.6    340.6    0.0    0.0
3,309.8    3,309.8    3,309.8    3,309.8    3,309.8    3,309.8    3,309.8    3,309.8    2,761.1    1,666.5    340.6    0.0    0.0




 106.7      106.7      106.7      106.7      106.7      106.7      106.7      106.7       26.7        0.0       0.0    0.0    0.0
 177.3      177.3      177.3      177.3      177.3      177.3      177.3      177.3      177.3       44.3       0.0    0.0    0.0
 198.8      198.8      198.8      198.8      198.8      198.8      198.8      198.8      198.8      198.8      49.7    0.0    0.0
 482.8      482.8      482.8      482.8      482.8      482.8      482.8      482.8      402.7      243.1      49.7    0.0    0.0


 601.0      601.0      601.0      601.0      601.0      601.0      601.0      601.0      474.0      255.0       0.0    0.0    0.0




  746.8      746.8      746.8      746.8      746.8      746.8      746.8      746.8      589.0      316.9       0.0    0.0    0.0
       264.1          264.1          264.1          264.1          264.1          264.1          264.1          264.1          186.3           73.8            0.0      0.0      0.0
         371            371            371            371            371            371            371            371            213

       $999          $1,020         $1,042         $1,063         $1,086         $1,109         $1,132         $1,156         $1,180         $1,205         $1,230   $1,256   $1,282


         $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0       $0       $0
         $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0       $0       $0
         $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0       $0       $0
         $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0       $0       $0


$135,968,458   $131,112,442   $126,256,425   $121,400,409   $116,544,392   $111,688,376   $106,832,360   $101,976,343    $97,120,327            $0             $0       $0       $0
          $0             $0             $0             $0             $0             $0             $0             $0             $0            $0             $0       $0       $0
  $4,856,016     $4,856,016     $4,856,016     $4,856,016     $4,856,016     $4,856,016     $4,856,016     $4,856,016     $4,856,016            $0             $0       $0       $0

          $0             $0             $0             $0             $0             $0             $0             $0    $92,264,311            $0             $0       $0       $0
$131,112,442   $126,256,425   $121,400,409   $116,544,392   $111,688,376   $106,832,360   $101,976,343    $97,120,327             $0            $0             $0       $0       $0
$133,540,450   $128,684,433   $123,828,417   $118,972,401   $114,116,384   $109,260,368   $104,404,352    $99,548,335    $48,560,164            $0             $0       $0       $0


$294,506,699   $284,351,296   $274,195,892   $264,040,489   $253,885,086   $243,729,682   $233,574,279   $223,418,875   $213,263,472   $203,108,068            $0       $0       $0
          $0             $0             $0             $0             $0             $0             $0             $0             $0             $0            $0       $0       $0
 $10,155,403    $10,155,403    $10,155,403    $10,155,403    $10,155,403    $10,155,403    $10,155,403    $10,155,403    $10,155,403    $10,155,403            $0       $0       $0

          $0             $0             $0             $0             $0             $0             $0             $0             $0   $192,952,665            $0       $0       $0
$284,351,296   $274,195,892   $264,040,489   $253,885,086   $243,729,682   $233,574,279   $223,418,875   $213,263,472   $203,108,068             $0            $0       $0       $0
$289,428,998   $279,273,594   $269,118,191   $258,962,787   $248,807,384   $238,651,980   $228,496,577   $218,341,174   $208,185,770   $101,554,034            $0       $0       $0


$445,358,911   $430,513,614   $415,668,317   $400,823,020   $385,977,723   $371,132,426   $356,287,129   $341,441,832   $326,596,535   $311,751,238   $296,905,941      $0       $0
          $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0      $0       $0
 $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297      $0       $0

          $0             $0             $0             $0             $0             $0             $0             $0             $0             $0   $282,060,644      $0       $0
$430,513,614   $415,668,317   $400,823,020   $385,977,723   $371,132,426   $356,287,129   $341,441,832   $326,596,535   $311,751,238   $296,905,941             $0      $0       $0
$437,936,263   $423,090,966   $408,245,669   $393,400,372   $378,555,075   $363,709,778   $348,864,481   $334,019,184   $319,173,886   $304,328,589   $148,452,970      $0       $0




$875,834,069   $845,977,352   $816,120,635   $786,263,918   $756,407,201   $726,550,484   $696,693,768   $666,837,051   $636,980,334   $514,859,306   $296,905,941      $0       $0
          $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0      $0       $0
 $29,856,717    $29,856,717    $29,856,717    $29,856,717    $29,856,717    $29,856,717    $29,856,717    $29,856,717    $29,856,717    $25,000,700    $14,845,297      $0       $0

          $0             $0             $0             $0             $0             $0             $0             $0    $92,264,311   $192,952,665   $282,060,644      $0       $0
$845,977,352   $816,120,635   $786,263,918   $756,407,201   $726,550,484   $696,693,768   $666,837,051   $636,980,334   $514,859,306   $296,905,941             $0      $0       $0
$860,905,710   $831,048,993   $801,192,276   $771,335,560   $741,478,843   $711,622,126   $681,765,409   $651,908,692   $575,919,820   $405,882,624   $148,452,970      $0       $0




 $66,770,225    $64,342,217    $61,914,208    $59,486,200    $57,058,192    $54,630,184    $52,202,176    $49,774,168    $24,280,082             $0             $0      $0       $0
$144,714,499   $139,636,797   $134,559,095   $129,481,394   $124,403,692   $119,325,990   $114,248,289   $109,170,587   $104,092,885    $50,777,017             $0      $0       $0
$218,968,131   $211,545,483   $204,122,834   $196,700,186   $189,277,537   $181,854,889   $174,432,240   $167,009,592   $159,586,943   $152,164,295    $74,226,485      $0       $0
$430,452,855   $415,524,497   $400,596,138   $385,667,780   $370,739,421   $355,811,063   $340,882,705   $325,954,346   $287,959,910   $202,941,312    $74,226,485      $0       $0




 $12,789,720    $12,324,639    $11,859,558    $11,394,478    $10,929,397    $10,464,316     $9,999,235     $9,534,155     $4,650,807             $0             $0      $0       $0
 $27,719,809    $26,747,184    $25,774,559    $24,801,934    $23,829,309    $22,856,685    $21,884,060    $20,911,435    $19,938,810     $9,726,249             $0      $0       $0
 $41,942,962    $40,521,167    $39,099,372    $37,677,576    $36,255,781    $34,833,986    $33,412,190    $31,990,395    $30,568,600    $29,146,804    $14,217,953      $0       $0
 $82,452,491    $79,592,990    $76,733,489    $73,873,988    $71,014,487    $68,154,986    $65,295,485    $62,435,985    $55,158,217    $38,873,053    $14,217,953      $0       $0
            $7,578,421      $7,302,842     $7,027,263    $6,751,684    $6,476,105    $6,200,526    $5,924,947    $5,649,368    $2,755,789            $0           $0    $0     $0
           $16,425,096     $15,848,776    $15,272,457   $14,696,138   $14,119,819   $13,543,500   $12,967,181   $12,390,862   $11,814,542    $5,763,191           $0    $0     $0
           $24,852,883     $24,010,412    $23,167,942   $22,325,471   $21,483,000   $20,640,530   $19,798,059   $18,955,589   $18,113,118   $17,270,647   $8,424,706    $0     $0
           $48,856,399     $47,162,030    $45,467,662   $43,773,293   $42,078,924   $40,384,556   $38,690,187   $36,995,818   $32,683,450   $23,033,839   $8,424,706    $0     $0

s more than overall market) 2.85%.
            $1,902,951       $1,833,753    $1,764,555    $1,695,357    $1,626,158    $1,556,960    $1,487,762    $1,418,564      $691,982            $0           $0    $0     $0
            $4,124,363       $3,979,649    $3,834,934    $3,690,220    $3,545,505    $3,400,791    $3,256,076    $3,111,362    $2,966,647    $1,447,145           $0    $0     $0
            $6,240,592       $6,029,046    $5,817,501    $5,605,955    $5,394,410    $5,182,864    $4,971,319    $4,759,773    $4,548,228    $4,336,682   $2,115,455    $0     $0
           $12,267,906      $11,842,448   $11,416,990   $10,991,532   $10,566,074   $10,140,615    $9,715,157    $9,289,699    $8,206,857    $5,783,827   $2,115,455    $0     $0




                  2009             2010          2011          2012          2013          2014          2015          2016          2017          2018         2019   2020   2021




                  100%            100%          100%          100%          100%          100%          100%          100%           50%
                  100%            100%          100%          100%          100%          100%          100%          100%          100%           50%
                  100%            100%          100%          100%          100%          100%          100%          100%          100%          100%          50%
ALLOWED AFTER TAX AND BEFORE TAX PROFITS PG&E SHAREHOLDERS WOULD EARN IN 2006 THROUGH 2019
 ON PG&E-OWNED CCGT CAPACITY THAT WILL BE AVOIDED DUE TO REDUCTIONS IN MWhs AND MWs IN 2006
                    THROUGH 2019 DUE TO 2006 THROUGH 2008 CEE PROGRAMS

                           Inputs                                         Units                Source
CCGT Annual Capacity Factor                                   90%
CCGT Installed Capital Cost ($/kW)                          $939 2006 $/kW                2005 MPR
CCGT Construction Cost Escalation Rate                       2.1% per year                2005 MPR
Debt % of Annual Capital Structure                            50%                         2005 MPR
                                                                                          PG&E Allowed After
                                                                                          Tax Rate of Return
After-Tax Return on Equity                                 11.35%                         on Equity
Before Tax Cost of Debt                                     0.00%                         PG&E Cost of Debt
State Income Tax Rate                                       8.84%                         2005 MPR
Federal Income Tax Rate                                    35.00%                         2005 MPR
Effective Income Tax Rate                                  40.75%                         2005 MPR
Weighted Average After Tax Cost of Capital                  5.68%
Weighted Average Before Tax Cost of Capital                 9.58%
Transformer & Transmisssion Line Losses                     1.48%                   2005 MPR
Distribution Voltage Level Line Losses                      6.06%                   PG&E estimates
                                                                                    CPUC RA
                                                                                    requirement
Required Capacity Reserve Margin                             15%                    decision
                                                                                    CPUC decision for
(Revenue Requirement) Book Life                                30 years (SL deprec) Contra Costa 8
Life of Energy Efficiency Measures Installed in:
                                                    2006       11 years                   PG&E estimates
                                                    2007       11 years                   PG&E estimates
                                                    2008       11 years                   PG&E estimates

                                                             2006                 2007                  2008

Customer-Meter Level Energy Efficiency Program Savings
(GWh):
CEE 2006 Programs                                          338.5               677.0                   677.0
CEE 2007 Programs                                            0.0               562.5                 1,125.0
CEE 2008 Programs                                            0.0                 0.0                   630.5
Total                                                      338.5             1,239.5                 2,432.5

Customer-Meter Level Energy Efficiency
Program Savings Grossed Up for Transmission
and Distribution Voltage Level Line Losses (GWh):
CEE 2006 Programs                                           365.8               731.5                   731.5
CEE 2007 Programs                                             0.0               607.8                 1,215.6
CEE 2008 Programs                                             0.0                 0.0                   681.3
Total                                                      365.8             1,339.4                 2,628.5

Equivalent Avoided CCGT Capacity plus 15% Reserve
Margin(MW) as simple cycle GT:
CEE 2006 Programs                                          106.7              106.7                   106.7
CEE 2007 Programs                                                             177.3                   177.3
CEE 2008 Programs                                                                                     198.8
Total                                                      106.7              284.0                   482.8

Annual Customer Meter-Level Demand Reductions Achieved
by CEE Programs (MW):                                      106.5              290.0                   503.8


Annual Customer Meter-Level Demand Reductions Due to
CEE Programs, Grossed Up for Transmission & Voltage
Level Line Losses, plus 15% Reserve Margin (MW):            132.3                 360.4                626.0
Required Additional CCGT Capacity Avoided Due to Loss- &
Reserve-Adjusted Demand Reductions Achieved by CEE
Programs, After Deducting Additional CCGT Capacity
Avoided Due to MWh Reductions Due to EE Programs:                     25.6           76.4          143.2
                                                                    132.28            183            250

Installed Capital Cost of New CCGT ($/kW):                           $939           $958           $979
Installed Capital Cost of New SCGT ($/kW):                           $567           $579           $591
Annual Capital Expenditure ($) for:
CCGT Capacity Avoided Due to 2006 EE Programs                 $114,676,265             $0             $0
CCGT Capacity Avoided Due to 2007 EE Programs                           $0   $214,177,283             $0
CCGT Capacity Avoided Due to 2008 EE Programs                           $0             $0   $279,180,474
Total                                                         $114,676,265   $214,177,283   $279,180,474

Net Book Value of Capacity Installed in 2006:
Beginning of Year Net Book Value                                        $0   $112,764,994   $109,006,161
PLUS: Capital Expenditure for New Capacity                    $114,676,265             $0             $0
LESS: Book Depreciation Expense                                 $1,911,271     $3,758,833     $3,758,833
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                             $0             $0             $0
EQUALS: End of Year Net Book Value                            $112,764,994   $109,006,161   $105,247,328
Average Net Book Value                                         $56,382,497   $110,885,577   $107,126,744

Net Book Value of Capacity Installed in 2007:
Beginning of Year Net Book Value                                       $0              $0   $210,607,661
PLUS: Capital Expenditure for New Capacity                             $0    $214,177,283             $0
LESS: Book Depreciation Expense                                        $0      $3,569,621     $7,020,255
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                            $0              $0             $0
EQUALS: End of Year Net Book Value                                     $0    $210,607,661   $203,587,406
Average Net Book Value                                                 $0    $105,303,831   $207,097,533

Net Book Value of Capacity Installed in 2008:
Beginning of Year Net Book Value                                       $0             $0              $0
PLUS: Capital Expenditure for New Capacity                             $0             $0    $279,180,474
LESS: Book Depreciation Expense                                        $0             $0      $4,653,008
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                            $0             $0              $0
EQUALS: End of Year Net Book Value                                     $0             $0    $274,527,466
Average Net Book Value                                                 $0             $0    $137,263,733

Net Book Value of All CCGT Capacity
Installed to Replace EE MWh & MW Savings:
Beginning of Year Net Book Value                                        $0   $112,764,994   $319,613,822
PLUS: Capital Expenditure for New Capacity                    $114,676,265   $214,177,283   $279,180,474
LESS: Book Depreciation Expense                                 $1,911,271     $7,328,455    $15,432,096
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                             $0             $0             $0
EQUALS: End of Year Net Book Value                            $112,764,994   $319,613,822   $583,362,199
Average Net Book Value                                         $56,382,497   $216,189,408   $451,488,011

Equity-Financed Share of Average Net Book Value
of All CCGT Capacity Avoided Due to MWh
and MW Reductions Due to:
2006 CEE Programs                                              $28,191,248    $55,442,789    $53,563,372
2007 CEE Programs                                                       $0    $52,651,915   $103,548,767
2008 CEE Programs                                                       $0             $0    $68,631,866
Average Equity-Financed Net Book Value                         $28,191,248   $108,094,704   $225,744,005

Allowed Before Tax Profits PG&E Shareholders Would
Earn on Capacity that Would Have Been Needed to
Provide MWhs and MWs Avoided in Each Year due to:
CEE 2006 Programs                                               $5,399,984    $10,619,969    $10,259,970
CEE 2007 Programs                                                       $0    $10,085,382    $19,834,585
CEE 2008 Programs                                                       $0             $0    $13,146,314
Total                                                           $5,399,984    $20,705,351    $43,240,869
Allowed After-Tax Profits PG&E Shareholders Would
Earn on Capacity that Would Have Been Needed to
Provide MWhs & MWs Avoided in Each Year due to:
CEE 2006 Programs                                           $3,199,707    $6,292,757        $6,079,443
CEE 2007 Programs                                                   $0    $5,975,992       $11,752,785
CEE 2008 Programs                                                   $0            $0        $7,789,717
Total                                                       $3,199,707   $12,268,749       $25,621,945

AFTER TAX PROFITS IN EXCESS OF PG&E'S ESTIMATE FOR STOCK MARKET (8.5%) (Amount that PG&E earns more than overall market) 2.85%.
CEE 2006 Programs                                       $803,451      $1,580,119        $1,526,556
CEE 2007 Programs                                             $0      $1,500,580        $2,951,140
CEE 2008 Programs                                             $0              $0        $1,956,008
Total                                                   $803,451      $3,080,699        $6,433,704

                                                                  25%            25%              25%

% of power owned                                                  50%            50%              50%

net % of PG&E estimate                                            13%            13%              13%


SOURCES AND NOTES


                                                                  2006          2007              2008
 Annual Shares of Levelized Annual Revenue Requirement
for PPA Providing Capacity Equivalent to Capacity Avoided
in Each Year Due to
CEE 2006 Programs                                                 50%           100%             100%
CEE 2007 Programs                                                                50%             100%
CEE 2008 Programs                                                                                 50%
               simple cycle gas turbine purchased for excess kWh    567.12 2006 $              2005 MPR




       2009               2010            2011            2012        2013             2014               2015      2016       2017       2018     2019    2020   2021




      677.0              677.0           677.0           677.0       677.0            677.0           677.0        677.0      338.5        0.0      0.0    0.0    0.0
    1,125.0            1,125.0         1,125.0         1,125.0     1,125.0          1,125.0         1,125.0      1,125.0    1,125.0      562.5      0.0    0.0    0.0
    1,261.0            1,261.0         1,261.0         1,261.0     1,261.0          1,261.0         1,261.0      1,261.0    1,261.0    1,261.0    630.5    0.0    0.0
    3,063.0            3,063.0         3,063.0         3,063.0     3,063.0          3,063.0         3,063.0      3,063.0    2,724.5    1,823.5    630.5    0.0    0.0




       731.5              731.5           731.5           731.5       731.5            731.5           731.5        731.5      182.9        0.0      0.0    0.0    0.0
     1,215.6            1,215.6         1,215.6         1,215.6     1,215.6          1,215.6         1,215.6      1,215.6    1,215.6      303.9      0.0    0.0    0.0
     1,362.6            1,362.6         1,362.6         1,362.6     1,362.6          1,362.6         1,362.6      1,362.6    1,362.6    1,362.6    340.6    0.0    0.0
    3,309.8            3,309.8         3,309.8         3,309.8     3,309.8          3,309.8         3,309.8      3,309.8    2,761.1    1,666.5    340.6    0.0    0.0




     106.7               106.7           106.7           106.7      106.7            106.7            106.7       106.7       26.7        0.0       0.0    0.0    0.0
     177.3               177.3           177.3           177.3      177.3            177.3            177.3       177.3      177.3       44.3       0.0    0.0    0.0
     198.8               198.8           198.8           198.8      198.8            198.8            198.8       198.8      198.8      198.8      49.7    0.0    0.0
     482.8               482.8           482.8           482.8      482.8            482.8            482.8       482.8      402.7      243.1      49.7    0.0    0.0


      503.8              503.8           503.8           503.8      503.8            503.8            503.8       503.8      397.3      213.7       0.0    0.0    0.0
503.7696509




      626.0              626.0           626.0            626.0      626.0            626.0           626.0        626.0      493.7      265.6       0.0    0.0    0.0
       143.2          143.2          143.2          143.2          143.2          143.2          143.2          143.2           91.0           22.5            0.0      0.0      0.0
         250            250            250            250            250            250            250            250            118

       $999          $1,020         $1,042         $1,063         $1,086         $1,109         $1,132         $1,156         $1,180         $1,205         $1,230   $1,256   $1,282
       $604            $616           $629           $642           $656           $670           $684           $698           $713           $728           $743     $759     $775

         $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0       $0       $0
         $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0       $0       $0
         $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0       $0       $0
         $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0       $0       $0


$105,247,328   $101,488,495    $97,729,661    $93,970,828    $90,211,995    $86,453,162    $82,694,329    $78,935,496    $75,176,663            $0             $0       $0       $0
          $0             $0             $0             $0             $0             $0             $0             $0             $0            $0             $0       $0       $0
  $3,758,833     $3,758,833     $3,758,833     $3,758,833     $3,758,833     $3,758,833     $3,758,833     $3,758,833     $3,758,833            $0             $0       $0       $0

          $0             $0             $0             $0             $0             $0             $0             $0    $71,417,830            $0             $0       $0       $0
$101,488,495    $97,729,661    $93,970,828    $90,211,995    $86,453,162    $82,694,329    $78,935,496    $75,176,663             $0            $0             $0       $0       $0
$103,367,911    $99,609,078    $95,850,245    $92,091,412    $88,332,579    $84,573,745    $80,814,912    $77,056,079    $37,588,331            $0             $0       $0       $0


$203,587,406   $196,567,150   $189,546,895   $182,526,640   $175,506,384   $168,486,129   $161,465,874   $154,445,618   $147,425,363   $140,405,107            $0       $0       $0
          $0             $0             $0             $0             $0             $0             $0             $0             $0             $0            $0       $0       $0
  $7,020,255     $7,020,255     $7,020,255     $7,020,255     $7,020,255     $7,020,255     $7,020,255     $7,020,255     $7,020,255     $7,020,255            $0       $0       $0

          $0             $0             $0             $0             $0             $0             $0             $0             $0   $133,384,852            $0       $0       $0
$196,567,150   $189,546,895   $182,526,640   $175,506,384   $168,486,129   $161,465,874   $154,445,618   $147,425,363   $140,405,107             $0            $0       $0       $0
$200,077,278   $193,057,023   $186,036,767   $179,016,512   $171,996,257   $164,976,001   $157,955,746   $150,935,490   $143,915,235    $70,202,554            $0       $0       $0


$274,527,466   $265,376,550   $256,225,635   $247,074,719   $237,923,804   $228,772,888   $219,621,973   $210,471,057   $201,320,142   $192,169,226   $183,018,311      $0       $0
          $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0      $0       $0
  $9,150,916     $9,150,916     $9,150,916     $9,150,916     $9,150,916     $9,150,916     $9,150,916     $9,150,916     $9,150,916     $9,150,916     $9,150,916      $0       $0

          $0             $0             $0             $0             $0             $0             $0             $0             $0             $0   $173,867,395      $0       $0
$265,376,550   $256,225,635   $247,074,719   $237,923,804   $228,772,888   $219,621,973   $210,471,057   $201,320,142   $192,169,226   $183,018,311             $0      $0       $0
$269,952,008   $260,801,093   $251,650,177   $242,499,262   $233,348,346   $224,197,431   $215,046,515   $205,895,599   $196,744,684   $187,593,768    $91,509,155      $0       $0




$583,362,199   $563,432,195   $543,502,191   $523,572,187   $503,642,183   $483,712,179   $463,782,175   $443,852,171   $423,922,167   $332,574,334   $183,018,311      $0       $0
          $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0      $0       $0
 $19,930,004    $19,930,004    $19,930,004    $19,930,004    $19,930,004    $19,930,004    $19,930,004    $19,930,004    $19,930,004    $16,171,171     $9,150,916      $0       $0

          $0             $0             $0             $0             $0             $0             $0             $0    $71,417,830   $133,384,852   $173,867,395      $0       $0
$563,432,195   $543,502,191   $523,572,187   $503,642,183   $483,712,179   $463,782,175   $443,852,171   $423,922,167   $332,574,334   $183,018,311             $0      $0       $0
$573,397,197   $553,467,193   $533,537,189   $513,607,185   $493,677,181   $473,747,177   $453,817,173   $433,887,169   $378,248,250   $257,796,322    $91,509,155      $0       $0




 $51,683,956    $49,804,539    $47,925,122    $46,045,706    $44,166,289    $42,286,873    $40,407,456    $38,528,040    $18,794,166             $0             $0      $0       $0
$100,038,639    $96,528,511    $93,018,384    $89,508,256    $85,998,128    $82,488,001    $78,977,873    $75,467,745    $71,957,618    $35,101,277             $0      $0       $0
$134,976,004   $130,400,546   $125,825,089   $121,249,631   $116,674,173   $112,098,715   $107,523,257   $102,947,800    $98,372,342    $93,796,884    $45,754,578      $0       $0
$286,698,599   $276,733,597   $266,768,595   $256,803,593   $246,838,591   $236,873,589   $226,908,587   $216,943,585   $189,124,125   $128,898,161    $45,754,578      $0       $0




  $9,899,971     $9,539,972     $9,179,973     $8,819,974     $8,459,975     $8,099,976     $7,739,978     $7,379,979     $3,599,990             $0             $0      $0       $0
 $19,162,226    $18,489,867    $17,817,509    $17,145,150    $16,472,791    $15,800,432    $15,128,073    $14,455,715    $13,783,356     $6,723,588             $0      $0       $0
 $25,854,417    $24,977,996    $24,101,576    $23,225,155    $22,348,734    $21,472,313    $20,595,892    $19,719,471    $18,843,050    $17,966,629     $8,764,209      $0       $0
 $54,916,615    $53,007,836    $51,099,057    $49,190,279    $47,281,500    $45,372,721    $43,463,943    $41,555,164    $36,226,395    $24,690,217     $8,764,209      $0       $0
            $5,866,129      $5,652,815     $5,439,501    $5,226,188    $5,012,874    $4,799,560    $4,586,246    $4,372,932    $2,133,138            $0           $0    $0     $0
           $11,354,386     $10,955,986    $10,557,587   $10,159,187    $9,760,788    $9,362,388    $8,963,989    $8,565,589    $8,167,190    $3,983,995           $0    $0     $0
           $15,319,776     $14,800,462    $14,281,148   $13,761,833   $13,242,519   $12,723,204   $12,203,890   $11,684,575   $11,165,261   $10,645,946   $5,193,145    $0     $0
           $32,540,291     $31,409,263    $30,278,235   $29,147,208   $28,016,180   $26,885,152   $25,754,125   $24,623,097   $21,465,588   $14,629,941   $5,193,145    $0     $0

s more than overall market) 2.85%.
            $1,472,993       $1,419,429    $1,365,866    $1,312,303    $1,258,739    $1,205,176    $1,151,613    $1,098,049      $535,634            $0           $0    $0     $0
            $2,851,101       $2,751,063    $2,651,024    $2,550,985    $2,450,947    $2,350,908    $2,250,869    $2,150,831    $2,050,792    $1,000,386           $0    $0     $0
            $3,846,816       $3,716,416    $3,586,015    $3,455,614    $3,325,214    $3,194,813    $3,064,413    $2,934,012    $2,803,612    $2,673,211   $1,304,005    $0     $0
            $8,170,910       $7,886,908    $7,602,905    $7,318,902    $7,034,900    $6,750,897    $6,466,895    $6,182,892    $5,390,038    $3,673,598   $1,304,005    $0     $0

                   25%             25%           25%           25%           25%           25%           25%           25%           25%           25%          25%

                   50%             50%           50%           50%           50%           50%           50%           50%           50%           50%          50%

                   13%             13%           13%           13%           13%           13%           13%           13%           13%           13%          13%




                  2009             2010          2011          2012          2013          2014          2015          2016          2017          2018         2019   2020   2021




                  100%            100%          100%          100%          100%          100%          100%          100%           50%
                  100%            100%          100%          100%          100%          100%          100%          100%          100%           50%
                  100%            100%          100%          100%          100%          100%          100%          100%          100%          100%          50%
ALLOWED AFTER TAX AND BEFORE TAX PROFITS PG&E SHAREHOLDERS WOULD EARN IN 2006 THROUGH 2019
 ON PG&E-OWNED CCGT CAPACITY THAT WILL BE AVOIDED DUE TO REDUCTIONS IN MWhs AND MWs IN 2006
                    THROUGH 2019 DUE TO 2006 THROUGH 2008 CEE PROGRAMS

                           Inputs                                         Units                Source
CCGT Annual Capacity Factor                                   90%
CCGT Installed Capital Cost ($/kW)                          $939 2006 $/kW                2005 MPR
CCGT Construction Cost Escalation Rate                       2.1% per year                2005 MPR
Debt % of Annual Capital Structure                            50%                         2005 MPR
                                                                                          PG&E Allowed After
                                                                                          Tax Rate of Return
After-Tax Return on Equity                                 10.70%                         on Equity
Before Tax Cost of Debt                                     0.00%                         PG&E Cost of Debt
State Income Tax Rate                                       8.84%                         2005 MPR
Federal Income Tax Rate                                    35.00%                         2005 MPR
Effective Income Tax Rate                                  40.75%                         2005 MPR
Weighted Average After Tax Cost of Capital                  5.35%
Weighted Average Before Tax Cost of Capital                 9.03%
Transformer & Transmisssion Line Losses                     1.48%                   2005 MPR
Distribution Voltage Level Line Losses                      6.06%                   PG&E estimates
                                                                                    CPUC RA
                                                                                    requirement
Required Capacity Reserve Margin                             15%                    decision
                                                                                    CPUC decision for
(Revenue Requirement) Book Life                                30 years (SL deprec) Contra Costa 8
Life of Energy Efficiency Measures Installed in:
                                                    2006       11 years                   PG&E estimates
                                                    2007       11 years                   PG&E estimates
                                                    2008       11 years                   PG&E estimates

                                                             2006                 2007                  2008

Customer-Meter Level Energy Efficiency Program Savings
(GWh):
CEE 2006 Programs                                          338.5               677.0                   677.0
CEE 2007 Programs                                            0.0               562.5                 1,125.0
CEE 2008 Programs                                            0.0                 0.0                   630.5
Total                                                      338.5             1,239.5                 2,432.5

Customer-Meter Level Energy Efficiency
Program Savings Grossed Up for Transmission
and Distribution Voltage Level Line Losses (GWh):
CEE 2006 Programs                                           365.8               731.5                   731.5
CEE 2007 Programs                                             0.0               607.8                 1,215.6
CEE 2008 Programs                                             0.0                 0.0                   681.3
Total                                                      365.8             1,339.4                 2,628.5

Equivalent Avoided CCGT Capacity plus 15% Reserve
Margin(MW) as simple cycle GT:
CEE 2006 Programs                                          106.7              106.7                   106.7
CEE 2007 Programs                                                             177.3                   177.3
CEE 2008 Programs                                                                                     198.8
Total                                                      106.7              284.0                   482.8

Annual Customer Meter-Level Demand Reductions Achieved
by CEE Programs (MW):                                      127.0              346.0                   601.0


Annual Customer Meter-Level Demand Reductions Due to
CEE Programs, Grossed Up for Transmission & Voltage
Level Line Losses, plus 15% Reserve Margin (MW):            157.8                 430.0                746.8
Required Additional CCGT Capacity Avoided Due to Loss- &
Reserve-Adjusted Demand Reductions Achieved by CEE
Programs, After Deducting Additional CCGT Capacity
Avoided Due to MWh Reductions Due to EE Programs:                     51.1          145.9          264.1
                                                                    157.82            253            371

Installed Capital Cost of New CCGT ($/kW):                           $939           $958           $979

Annual Capital Expenditure ($) for:
CCGT Capacity Avoided Due to 2006 EE Programs                 $148,149,651             $0             $0
CCGT Capacity Avoided Due to 2007 EE Programs                           $0   $309,825,867             $0
CCGT Capacity Avoided Due to 2008 EE Programs                           $0             $0   $452,907,367
Total                                                         $148,149,651   $309,825,867   $452,907,367

Net Book Value of Capacity Installed in 2006:
Beginning of Year Net Book Value                                        $0   $145,680,491   $140,824,474
PLUS: Capital Expenditure for New Capacity                    $148,149,651             $0             $0
LESS: Book Depreciation Expense                                 $2,469,161     $4,856,016     $4,856,016
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                             $0             $0             $0
EQUALS: End of Year Net Book Value                            $145,680,491   $140,824,474   $135,968,458
Average Net Book Value                                         $72,840,245   $143,252,482   $138,396,466

Net Book Value of Capacity Installed in 2007:
Beginning of Year Net Book Value                                       $0              $0   $304,662,103
PLUS: Capital Expenditure for New Capacity                             $0    $309,825,867             $0
LESS: Book Depreciation Expense                                        $0      $5,163,764    $10,155,403
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                            $0              $0             $0
EQUALS: End of Year Net Book Value                                     $0    $304,662,103   $294,506,699
Average Net Book Value                                                 $0    $152,331,051   $299,584,401

Net Book Value of Capacity Installed in 2008:
Beginning of Year Net Book Value                                       $0             $0              $0
PLUS: Capital Expenditure for New Capacity                             $0             $0    $452,907,367
LESS: Book Depreciation Expense                                        $0             $0      $7,548,456
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                            $0             $0              $0
EQUALS: End of Year Net Book Value                                     $0             $0    $445,358,911
Average Net Book Value                                                 $0             $0    $222,679,456

Net Book Value of All CCGT Capacity
Installed to Replace EE MWh & MW Savings:
Beginning of Year Net Book Value                                        $0   $145,680,491   $445,486,577
PLUS: Capital Expenditure for New Capacity                    $148,149,651   $309,825,867   $452,907,367
LESS: Book Depreciation Expense                                 $2,469,161    $10,019,781    $22,559,876
LESS: Depreciated Book Value of New Capacity Avoided Due to
EE Measures Expiring at End of Current Year                             $0             $0             $0
EQUALS: End of Year Net Book Value                            $145,680,491   $445,486,577   $875,834,069
Average Net Book Value                                         $72,840,245   $295,583,534   $660,660,323

Equity-Financed Share of Average Net Book Value
of All CCGT Capacity Avoided Due to MWh
and MW Reductions Due to:
2006 CEE Programs                                              $36,420,123    $71,626,241    $69,198,233
2007 CEE Programs                                                       $0    $76,165,526   $149,792,200
2008 CEE Programs                                                       $0             $0   $111,339,728
Average Equity-Financed Net Book Value                         $36,420,123   $147,791,767   $330,330,161

Allowed Before Tax Profits SDG&E Shareholders Would
Earn on Capacity that Would Have Been Needed to
Provide MWhs and MWs Avoided in Each Year due to:
CEE 2006 Programs                                               $6,576,692    $12,934,161    $12,495,715
CEE 2007 Programs                                                       $0    $13,753,858    $27,049,255
CEE 2008 Programs                                                       $0             $0    $20,105,564
Total                                                           $6,576,692    $26,688,019    $59,650,534
Allowed After-Tax Profits SDG&E Shareholders Would
Earn on Capacity that Would Have Been Needed to
Provide MWhs & MWs Avoided in Each Year due to:
CEE 2006 Programs                                           $3,896,953    $7,664,008        $7,404,211
CEE 2007 Programs                                                   $0    $8,149,711       $16,027,765
CEE 2008 Programs                                                   $0            $0       $11,913,351
Total                                                       $3,896,953   $15,813,719       $35,345,327

AFTER TAX PROFITS IN EXCESS OF PG&E'S ESTIMATE FOR STOCK MARKET (8.5%) (Amount that SDG&E earns more than overall market) 2.2%.
CEE 2006 Programs                                       $801,243      $1,575,777        $1,522,361
CEE 2007 Programs                                             $0      $1,675,642        $3,295,428
CEE 2008 Programs                                             $0              $0        $2,449,474
Total                                                   $801,243      $3,251,419        $7,267,264

                                                                  21%           21%               21%

% of power owned                                                  50%           50%               50%

net % of PG&E estimate                                            10%           10%               10%


SOURCES AND NOTES


                                                                  2006          2007              2008
 Annual Shares of Levelized Annual Revenue Requirement
for PPA Providing Capacity Equivalent to Capacity Avoided
in Each Year Due to
CEE 2006 Programs                                                 50%          100%              100%
CEE 2007 Programs                                                               50%              100%
CEE 2008 Programs                                                                                 50%
   2009       2010       2011       2012       2013       2014       2015       2016       2017       2018     2019    2020   2021




  677.0      677.0      677.0      677.0      677.0      677.0      677.0      677.0      338.5        0.0      0.0    0.0    0.0
1,125.0    1,125.0    1,125.0    1,125.0    1,125.0    1,125.0    1,125.0    1,125.0    1,125.0      562.5      0.0    0.0    0.0
1,261.0    1,261.0    1,261.0    1,261.0    1,261.0    1,261.0    1,261.0    1,261.0    1,261.0    1,261.0    630.5    0.0    0.0
3,063.0    3,063.0    3,063.0    3,063.0    3,063.0    3,063.0    3,063.0    3,063.0    2,724.5    1,823.5    630.5    0.0    0.0




   731.5      731.5      731.5      731.5      731.5      731.5      731.5      731.5      182.9        0.0      0.0    0.0    0.0
 1,215.6    1,215.6    1,215.6    1,215.6    1,215.6    1,215.6    1,215.6    1,215.6    1,215.6      303.9      0.0    0.0    0.0
 1,362.6    1,362.6    1,362.6    1,362.6    1,362.6    1,362.6    1,362.6    1,362.6    1,362.6    1,362.6    340.6    0.0    0.0
3,309.8    3,309.8    3,309.8    3,309.8    3,309.8    3,309.8    3,309.8    3,309.8    2,761.1    1,666.5    340.6    0.0    0.0




 106.7      106.7      106.7      106.7      106.7      106.7      106.7      106.7       26.7        0.0       0.0    0.0    0.0
 177.3      177.3      177.3      177.3      177.3      177.3      177.3      177.3      177.3       44.3       0.0    0.0    0.0
 198.8      198.8      198.8      198.8      198.8      198.8      198.8      198.8      198.8      198.8      49.7    0.0    0.0
 482.8      482.8      482.8      482.8      482.8      482.8      482.8      482.8      402.7      243.1      49.7    0.0    0.0


 601.0      601.0      601.0      601.0      601.0      601.0      601.0      601.0      474.0      255.0       0.0    0.0    0.0




  746.8      746.8      746.8      746.8      746.8      746.8      746.8      746.8      589.0      316.9       0.0    0.0    0.0
       264.1          264.1          264.1          264.1          264.1          264.1          264.1          264.1          186.3           73.8            0.0      0.0      0.0
         371            371            371            371            371            371            371            371            213

       $999          $1,020         $1,042         $1,063         $1,086         $1,109         $1,132         $1,156         $1,180         $1,205         $1,230   $1,256   $1,282


         $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0       $0       $0
         $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0       $0       $0
         $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0       $0       $0
         $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0       $0       $0


$135,968,458   $131,112,442   $126,256,425   $121,400,409   $116,544,392   $111,688,376   $106,832,360   $101,976,343    $97,120,327            $0             $0       $0       $0
          $0             $0             $0             $0             $0             $0             $0             $0             $0            $0             $0       $0       $0
  $4,856,016     $4,856,016     $4,856,016     $4,856,016     $4,856,016     $4,856,016     $4,856,016     $4,856,016     $4,856,016            $0             $0       $0       $0

          $0             $0             $0             $0             $0             $0             $0             $0    $92,264,311            $0             $0       $0       $0
$131,112,442   $126,256,425   $121,400,409   $116,544,392   $111,688,376   $106,832,360   $101,976,343    $97,120,327             $0            $0             $0       $0       $0
$133,540,450   $128,684,433   $123,828,417   $118,972,401   $114,116,384   $109,260,368   $104,404,352    $99,548,335    $48,560,164            $0             $0       $0       $0


$294,506,699   $284,351,296   $274,195,892   $264,040,489   $253,885,086   $243,729,682   $233,574,279   $223,418,875   $213,263,472   $203,108,068            $0       $0       $0
          $0             $0             $0             $0             $0             $0             $0             $0             $0             $0            $0       $0       $0
 $10,155,403    $10,155,403    $10,155,403    $10,155,403    $10,155,403    $10,155,403    $10,155,403    $10,155,403    $10,155,403    $10,155,403            $0       $0       $0

          $0             $0             $0             $0             $0             $0             $0             $0             $0   $192,952,665            $0       $0       $0
$284,351,296   $274,195,892   $264,040,489   $253,885,086   $243,729,682   $233,574,279   $223,418,875   $213,263,472   $203,108,068             $0            $0       $0       $0
$289,428,998   $279,273,594   $269,118,191   $258,962,787   $248,807,384   $238,651,980   $228,496,577   $218,341,174   $208,185,770   $101,554,034            $0       $0       $0


$445,358,911   $430,513,614   $415,668,317   $400,823,020   $385,977,723   $371,132,426   $356,287,129   $341,441,832   $326,596,535   $311,751,238   $296,905,941      $0       $0
          $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0      $0       $0
 $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297    $14,845,297      $0       $0

          $0             $0             $0             $0             $0             $0             $0             $0             $0             $0   $282,060,644      $0       $0
$430,513,614   $415,668,317   $400,823,020   $385,977,723   $371,132,426   $356,287,129   $341,441,832   $326,596,535   $311,751,238   $296,905,941             $0      $0       $0
$437,936,263   $423,090,966   $408,245,669   $393,400,372   $378,555,075   $363,709,778   $348,864,481   $334,019,184   $319,173,886   $304,328,589   $148,452,970      $0       $0




$875,834,069   $845,977,352   $816,120,635   $786,263,918   $756,407,201   $726,550,484   $696,693,768   $666,837,051   $636,980,334   $514,859,306   $296,905,941      $0       $0
          $0             $0             $0             $0             $0             $0             $0             $0             $0             $0             $0      $0       $0
 $29,856,717    $29,856,717    $29,856,717    $29,856,717    $29,856,717    $29,856,717    $29,856,717    $29,856,717    $29,856,717    $25,000,700    $14,845,297      $0       $0

          $0             $0             $0             $0             $0             $0             $0             $0    $92,264,311   $192,952,665   $282,060,644      $0       $0
$845,977,352   $816,120,635   $786,263,918   $756,407,201   $726,550,484   $696,693,768   $666,837,051   $636,980,334   $514,859,306   $296,905,941             $0      $0       $0
$860,905,710   $831,048,993   $801,192,276   $771,335,560   $741,478,843   $711,622,126   $681,765,409   $651,908,692   $575,919,820   $405,882,624   $148,452,970      $0       $0




 $66,770,225    $64,342,217    $61,914,208    $59,486,200    $57,058,192    $54,630,184    $52,202,176    $49,774,168    $24,280,082             $0             $0      $0       $0
$144,714,499   $139,636,797   $134,559,095   $129,481,394   $124,403,692   $119,325,990   $114,248,289   $109,170,587   $104,092,885    $50,777,017             $0      $0       $0
$218,968,131   $211,545,483   $204,122,834   $196,700,186   $189,277,537   $181,854,889   $174,432,240   $167,009,592   $159,586,943   $152,164,295    $74,226,485      $0       $0
$430,452,855   $415,524,497   $400,596,138   $385,667,780   $370,739,421   $355,811,063   $340,882,705   $325,954,346   $287,959,910   $202,941,312    $74,226,485      $0       $0




 $12,057,269    $11,618,823    $11,180,377    $10,741,930    $10,303,484     $9,865,038     $9,426,592     $8,988,146     $4,384,461             $0             $0      $0       $0
 $26,132,331    $25,215,407    $24,298,483    $23,381,559    $22,464,635    $21,547,711    $20,630,788    $19,713,864    $18,796,940     $9,169,239             $0      $0       $0
 $39,540,942    $38,200,572    $36,860,201    $35,519,830    $34,179,459    $32,839,088    $31,498,717    $30,158,346    $28,817,975    $27,477,604    $13,403,709      $0       $0
 $77,730,542    $75,034,801    $72,339,060    $69,643,319    $66,947,578    $64,251,837    $61,556,096    $58,860,355    $51,999,376    $36,646,843    $13,403,709      $0       $0
           $7,144,414      $6,884,617     $6,624,820    $6,365,023    $6,105,227    $5,845,430    $5,585,633    $5,325,836    $2,597,969            $0           $0    $0     $0
          $15,484,451     $14,941,137    $14,397,823   $13,854,509   $13,311,195   $12,767,881   $12,224,567   $11,681,253   $11,137,939    $5,433,141           $0    $0     $0
          $23,429,590     $22,635,367    $21,841,143   $21,046,920   $20,252,696   $19,458,473   $18,664,250   $17,870,026   $17,075,803   $16,281,580   $7,942,234    $0     $0
          $46,058,455     $44,461,121    $42,863,787   $41,266,452   $39,669,118   $38,071,784   $36,474,449   $34,877,115   $30,811,710   $21,714,720   $7,942,234    $0     $0

ns more than overall market) 2.2%.
           $1,468,945       $1,415,529    $1,362,113    $1,308,696    $1,255,280    $1,201,864    $1,148,448    $1,095,032      $534,162            $0           $0    $0     $0
           $3,183,719       $3,072,010    $2,960,300    $2,848,591    $2,736,881    $2,625,172    $2,513,462    $2,401,753    $2,290,043    $1,117,094           $0    $0     $0
           $4,817,299       $4,654,001    $4,490,702    $4,327,404    $4,164,106    $4,000,808    $3,837,509    $3,674,211    $3,510,913    $3,347,614   $1,632,983    $0     $0
           $9,469,963       $9,141,539    $8,813,115    $8,484,691    $8,156,267    $7,827,843    $7,499,420    $7,170,996    $6,335,118    $4,464,709   $1,632,983    $0     $0

                  21%             21%           21%           21%           21%           21%           21%           21%           21%           21%          21%

                  50%             50%           50%           50%           50%           50%           50%           50%           50%           50%          50%

                  10%             10%           10%           10%           10%           10%           10%           10%           10%           10%          10%




                  2009            2010          2011          2012          2013          2014          2015          2016          2017          2018         2019   2020   2021




                 100%            100%          100%          100%          100%          100%          100%          100%           50%
                 100%            100%          100%          100%          100%          100%          100%          100%          100%           50%
                 100%            100%          100%          100%          100%          100%          100%          100%          100%          100%          50%
                                           Input Data for Charge 2006


Analyst:                                                     Asset:      Power Plant

Expected Service Life                  =          30           Income Tax Data:                           Federal           State
Expected Salvage Value                 =           0 %            Tax Rate                            =        35 %          8.84 %
Book Depreciation Life                 =          30              Depreciation Method                 =       1.5             1.5
  None 0                                                              None 0, SL 1
Book Depreciation Salvage              =        0   %                 150% DB/SL 1.5
Weighted Average Cost of Capital       =    10.36   %                 DDB/SL or SYD 2
Discount Rate (after-tax WACC)         =     8.72   %             Half Year Convention                =           1              1
Bond Interest Rate                     =     8.03   %                 No 0, Yes 1
Debt Ratio                             =    50.00   %             Depreciation Life                   =          30             30
Property Tax Rate                      =     1.00   %             Depreciation Salvage                =         n/a              0 %
Insurance                              =     0.30   %             Basis Adjustment                    =           0%             0 %
M&O Expenses                           =     0.00   %             Normalization Life *                =           b              0
M&O Escalation Rate                    =     0.00   %             Investment Tax Credit               =           0%           n/a
Timing of Investment                   =        0                 ITC Normalization Life *            =           0            n/a
 Beginning-year 0, mid-year 6.5, mid-month 1-12                  * Enter normalization life or b for book life or 0 for flow thru.




                                   Summary of Revenue Requirements as a
                                     Percentage of Capital Over 30 Years
                                                                           Present         Level
                                         Description                        Value          Annual
                              Return on Investment                            76.06            7.22
                              Book Depreciation                               35.12            3.33
                              Federal and State Income Taxes                  31.79            3.02
                              Property Tax                                     7.44            0.71
                              Insurance                                        3.16            0.30
                                Subtotal of Fixed Charges                    153.57           14.58
                              M&O                                              0.00            0.00
                                 Total                                       153.57           14.58



Notes:




   af411234-a4c8-4286-b52f-f9bd22987093.xls              Page 38 of 41                                       10/11/2011 1:12 PM
                       Rate Base as a Percentage of Capital Investment
                                                     Power Plant

Book Life = 30 Years                           Federal Tax Life = 30 Years                     State Tax Life = 30 Years
Book Salvage = 0%                              Federal Tax Salvage = n/a                        State Tax Salvage = 0%

          Book         Federal Tax Deprctn       State Tax Deprctn           Deferred Taxes      Unamrtzd       Rate
 Year    Deprctn       Actual     Normlzd        Actual    Normlzd          Federal    State       ITC          Base

     1        3.33         2.50         3.33         2.50            0.00       -0.29    0.00           0.00     100.00
     2        3.33         4.88         3.33         4.88            0.00        0.54    0.00           0.00      96.96
     3        3.33         4.63         3.33         4.63            0.00        0.45    0.00           0.00      93.09
     4        3.33         4.40         3.33         4.40            0.00        0.37    0.00           0.00      89.30
     5        3.33         4.18         3.33         4.18            0.00        0.30    0.00           0.00      85.59
     6        3.33         3.97         3.33         3.97            0.00        0.22    0.00           0.00      81.96
     7        3.33         3.77         3.33         3.77            0.00        0.15    0.00           0.00      78.41
     8        3.33         3.58         3.33         3.58            0.00        0.09    0.00           0.00      74.92
     9        3.33         3.40         3.33         3.40            0.00        0.02    0.00           0.00      71.50
    10        3.33         3.23         3.33         3.23            0.00       -0.03    0.00           0.00      68.14
    11        3.33         3.07         3.33         3.07            0.00       -0.09    0.00           0.00      64.84
    12        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00      61.60
    13        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00      58.38
    14        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00      55.17
    15        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00      51.96
    16        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00      48.74
    17        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00      45.53
    18        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00      42.31
    19        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00      39.10
    20        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00      35.88
    21        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00      32.67
    22        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00      29.45
    23        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00      26.24
    24        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00      23.03
    25        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00      19.81
    26        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00      16.60
    27        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00      13.38
    28        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00      10.17
    29        3.33         2.99         3.33         2.99            0.00       -0.12    0.00           0.00       6.95
    30        3.33         4.49         3.33         4.49            0.00        0.41    0.00           0.00       3.74
    31        0.00         0.00         0.00         0.00            0.00       0.00     0.00           0.00       0.00
    32        0.00         0.00         0.00         0.00            0.00       0.00     0.00           0.00       0.00
    33        0.00         0.00         0.00         0.00            0.00       0.00     0.00           0.00       0.00
    34        0.00         0.00         0.00         0.00            0.00       0.00     0.00           0.00       0.00
    35        0.00         0.00         0.00         0.00            0.00       0.00     0.00           0.00       0.00

 Total      100.00       100.00       100.00       100.00            0.00       0.00     0.00




  af411234-a4c8-4286-b52f-f9bd22987093.xls           Page 39 of 41                                 10/11/2011 1:12 PM
            Return & Income Taxes as a Percentage of Capital Investment
                                                     Power Plant

Rate of Return = 10.355%                           Bond Interest = 8.03%                   Federal Tax Rate = 35%
Discount Rate = 8.7190481%                         Debt Ratio = 50%                        State Tax Rate = 8.84%

             Rate       Book                         Bond       Tax Depreciation               Income Taxes
 Year        Base      Deprctn      Return          Interest   Federal    State      ITC      Federal   State

        1     100.00         3.33          10.36        4.02         3.33     2.50    0.00         3.41       1.03
        2      96.96         3.33          10.04        3.89         3.33     4.88    0.00         3.31       0.77
        3      93.09         3.33           9.64        3.74         3.33     4.63    0.00         3.18       0.75
        4      89.30         3.33           9.25        3.59         3.33     4.40    0.00         3.05       0.74
        5      85.59         3.33           8.86        3.44         3.33     4.18    0.00         2.92       0.73
      6        81.96         3.33           8.49        3.29         3.33     3.97    0.00         2.80       0.71
      7        78.41         3.33           8.12        3.15         3.33     3.77    0.00         2.68       0.70
      8        74.92         3.33           7.76        3.01         3.33     3.58    0.00         2.56       0.68
      9        71.50         3.33           7.40        2.87         3.33     3.40    0.00         2.44       0.67
     10        68.14         3.33           7.06        2.74         3.33     3.23    0.00         2.33       0.65
     11        64.84         3.33           6.71        2.60         3.33     3.07    0.00         2.21       0.64
     12        61.60         3.33           6.38        2.47         3.33     2.99    0.00         2.10       0.62
     13        58.38         3.33           6.05        2.34         3.33     2.99    0.00         1.99       0.59
     14        55.17         3.33           5.71        2.22         3.33     2.99    0.00         1.88       0.55
     15        51.96         3.33           5.38        2.09         3.33     2.99    0.00         1.77       0.52
     16        48.74         3.33           5.05        1.96         3.33     2.99    0.00         1.66       0.49
     17        45.53         3.33           4.71        1.83         3.33     2.99    0.00         1.55       0.46
     18        42.31         3.33           4.38        1.70         3.33     2.99    0.00         1.44       0.43
     19        39.10         3.33           4.05        1.57         3.33     2.99    0.00         1.33       0.40
     20        35.88         3.33           3.72        1.44         3.33     2.99    0.00         1.22       0.37
     21        32.67         3.33           3.38        1.31         3.33     2.99    0.00         1.12       0.34
     22        29.45         3.33           3.05        1.18         3.33     2.99    0.00         1.01       0.31
     23        26.24         3.33           2.72        1.05         3.33     2.99    0.00         0.90       0.28
     24        23.03         3.33           2.38        0.92         3.33     2.99    0.00         0.79       0.25
     25        19.81         3.33           2.05        0.80         3.33     2.99    0.00         0.68       0.22
     26        16.60         3.33           1.72        0.67         3.33     2.99    0.00         0.57       0.19
     27        13.38         3.33           1.39        0.54         3.33     2.99    0.00         0.46       0.16
     28        10.17         3.33           1.05        0.41         3.33     2.99    0.00         0.35       0.13
     29         6.95         3.33           0.72        0.28         3.33     2.99    0.00         0.24       0.10
     30         3.74         3.33           0.39        0.15         3.33     4.49    0.00         0.13      -0.08
     31         0.00         0.00           0.00        0.00         0.00     0.00    0.00         0.00       0.00
     32         0.00         0.00           0.00        0.00         0.00     0.00    0.00         0.00       0.00
     33         0.00         0.00           0.00        0.00         0.00     0.00    0.00         0.00       0.00
     34         0.00         0.00           0.00        0.00         0.00     0.00    0.00         0.00       0.00
     35         0.00         0.00           0.00        0.00         0.00     0.00    0.00         0.00       0.00

    PV                                                                                            25.08       6.71
    LA                                                                                             2.38       0.64




af411234-a4c8-4286-b52f-f9bd22987093.xls             Page 40 of 41                              10/11/2011 1:12 PM
     Annual Revenue Requirements as a Percentage of Capital Investment
                                                   Power Plant

Expected Life = 30 Years                                                               Rate of Return = 10.355%
Expected Salvage = 0%                                                               Discount Rate = 8.7190481%

                        Book        Income         Property                      Fixed
 Year       Return     Deprctn       Taxes           Tax           Insurance    Charges     M&O        Total

        1      10.36         3.33           4.44          1.00           0.30       19.43      0.00       19.43
        2      10.04         3.33           4.08          0.97           0.30       18.72      0.00       18.72
        3       9.64         3.33           3.93          0.93           0.30       18.14      0.00       18.14
        4       9.25         3.33           3.79          0.90           0.30       17.57      0.00       17.57
        5       8.86         3.33           3.65          0.87           0.30       17.01      0.00       17.01
      6         8.49         3.33           3.51          0.83           0.30       16.47      0.00       16.47
      7         8.12         3.33           3.38          0.80           0.30       15.93      0.00       15.93
      8         7.76         3.33           3.24          0.77           0.30       15.40      0.00       15.40
      9         7.40         3.33           3.11          0.73           0.30       14.88      0.00       14.88
     10         7.06         3.33           2.98          0.70           0.30       14.37      0.00       14.37
     11         6.71         3.33           2.85          0.67           0.30       13.87      0.00       13.87
     12         6.38         3.33           2.72          0.63           0.30       13.36      0.00       13.36
     13         6.05         3.33           2.58          0.60           0.30       12.86      0.00       12.86
     14         5.71         3.33           2.44          0.57           0.30       12.35      0.00       12.35
     15         5.38         3.33           2.30          0.53           0.30       11.84      0.00       11.84
     16         5.05         3.33           2.16          0.50           0.30       11.34      0.00       11.34
     17         4.71         3.33           2.02          0.47           0.30       10.83      0.00       10.83
     18         4.38         3.33           1.88          0.43           0.30       10.33      0.00       10.33
     19         4.05         3.33           1.74          0.40           0.30        9.82      0.00        9.82
     20         3.72         3.33           1.60          0.37           0.30        9.31      0.00        9.31
     21         3.38         3.33           1.46          0.33           0.30        8.81      0.00        8.81
     22         3.05         3.33           1.32          0.30           0.30        8.30      0.00        8.30
     23         2.72         3.33           1.18          0.27           0.30        7.79      0.00        7.79
     24         2.38         3.33           1.04          0.23           0.30        7.29      0.00        7.29
     25         2.05         3.33           0.90          0.20           0.30        6.78      0.00        6.78
     26         1.72         3.33           0.76          0.17           0.30        6.28      0.00        6.28
     27         1.39         3.33           0.62          0.13           0.30        5.77      0.00        5.77
     28         1.05         3.33           0.48          0.10           0.30        5.26      0.00        5.26
     29         0.72         3.33           0.34          0.07           0.30        4.76      0.00        4.76
     30         0.39         3.33           0.05          0.03           0.30        4.10      0.00        4.10
     31         0.00         0.00           0.00          0.00           0.00        0.00      0.00        0.00
     32         0.00         0.00           0.00          0.00           0.00        0.00      0.00        0.00
     33         0.00         0.00           0.00          0.00           0.00        0.00      0.00        0.00
     34         0.00         0.00           0.00          0.00           0.00        0.00      0.00        0.00
     35         0.00         0.00           0.00          0.00           0.00        0.00      0.00        0.00

     PV        76.06       35.12           31.79          7.44           3.16      153.57      0.00     153.57
     LA         7.22        3.33            3.02          0.71           0.30       14.58      0.00      14.58




af411234-a4c8-4286-b52f-f9bd22987093.xls           Page 41 of 41                             10/11/2011 1:12 PM

				
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