ENVIRONMENTAL LITIGATION AND LIABILITIES

Legal disputes are an inevitable aspect of any large company’s business. PG&E Corporation is no exception. Our 2002 Annual Report, available on our website at www.pgecorp.com, includes a full discussion of the environmental litigation involving PG&E Corporation or its businesses.

The 2002 Annual Report also includes a discussion of potential liabilities associated with hazardous waste remediation at some former Utility operations sites, including manufactured gas plants that were removed from service, as well as fossil-fuel and geothermal power plants that Pacific Gas and Electric Company no longer owns or operates.