1. 1 PG&E’s Response to the Summer 2006 Heat Storm LIOB Meeting September 14, 2006 Sacramento, CA

2. 2 Summer 2006 Heat Storm in PG&E’s Service Territory Weather unusually warm July 16 to July 27 131 cooling degree days over PG&E’s service territory for July 2006—old record was 111 in 1984 PG&E experienced higher demand, sales and revenue PG&E customers now facing the bills

3. 3 Impact of Heat Storm on PG&E CARE Customer Bills CARE customers pay for baseline use at the Tier 1 rate and all remaining use at Tier 2 rates; CARE customer bills increased as a result of greater use, as well as more use at the higher Tier 2 rate. Compared to billings for June, July bills for individually metered CARE customers increased about 33% while usage increased about 31%. These results only reflect billings for July, but bills for the July heat wave will be sent in both July and August.

4. 4 Customer Calls to PG&E During the Heat Storm Normal weekday call volume range

5. 5 Customer Interest in PG&E Programs During the Heat Storm Pay Plan calls as % of total calls Jan Feb Mar Apr May June July Aug Sept Oct 2005 12.3 11.6 12.9 15.2 12.3 9.6 10.8 9.2 13.1 9.2 2006 N/A 9.9 11.4 11.9 9.9 10.1 10.3 12.5 Pay Plan calls increased 35% in August as compared to August of last year. --------------------------------------------------------------------------------------- Energy Cost Inquiry (ECI) calls as a % of total calls Jan Feb Mar Apr May June July Aug Sept Oct 2005 4.6 7.5 2.6 1.4 2.0 2.4 2.0 3.6 2006 N/A 5.4 1.6 1.5 1.4 1.8 2.1 3.5 ECI calls basically stayed constant with last year.

6. 6 PG&E’s Immediate Response Payment Arrangements: relaxed pay plan policies, offering more flexible arrangements to spread payments over a longer period REACH: PG&E pledged $100,000 to help customers pay their bills Balanced Payment Plan: averages monthly energy costs to eliminate big swings in payments Safety Net: implemented for customers with outages

7. 7 PG&E’s Response: Heat Storm Credit Advice Letter 2885-E filed August 16, 2006  One-time electric bill credit in October, calculated as: 15% of “heat storm bill” for residential customers 10% of “heat storm bill” for non-residential customers  Additional $5 million for outreach and assistance to severely impacted customers, administered similar to REACH  Estimated cost: $125-150 million CPUC approved September 7 (Res. E-4019) with $10 million for outreach and assistance