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March 20 , 2007
ISSUED BY:   PG&E Corporation, 1-800-743-6397


Company Sees Average Annual EPS Growth at 8 Percent for 2007-2011

(San Francisco) – PG&E Corporation (NYSE: PCG) will host a meeting for members of the financial community on Wednesday, April 4, 2007 in New York City. Chairman, CEO and President Peter Darbee and other members of senior management will discuss PG&E Corporation’s business and strategic focus, the capital spending plans of its utility subsidiary, Pacific Gas and Electric Company, and PG&E Corporation’s multi-year financial outlook for 2007-2011.

During the April 4 analyst meeting, the company will discuss:

  • 2007 guidance for earnings per share (EPS) from operations*, which is targeted at $2.70-$2.80.

  • 2008 guidance for EPS from operations, which is targeted at $2.90-$3.00.

  • Its target for average annual growth in EPS from operations of 8 percent for 2007-2011.

  • The continued commitment to improve the utility’s operations and customer service through its business transformation effort. This effort is expected to result in net benefits for the utility as early as 2008, including annual pre-tax expense reductions and annual capital expenditure savings. Annual pre-tax expense reductions are projected to approach an approximate range of $175 million to $275 million in 2011 and annual capital expenditure savings are projected to approach an approximate range of $175 million to $325 million in 2011.

  • The company’s expectation that dividends per share will grow during 2007-2011 at approximately the same rate as EPS from operations.

  • The utility’s plans for capital expenditures, averaging $2.8 billion per year over 2007-2011, and yielding 8 percent average annual growth in utility rate base.

PG&E Corporation’s financial outlook reflects the substantial level of planned investment in the utility’s energy infrastructure to meet the needs of 15 million Californians. These investments include expanding electric and gas distribution and transmission systems, upgrading and replacing existing equipment such as cables, transformers and electric generation turbines, as well as bringing the latest technology to customers by installing 10 million SmartMeterTM devices at homes and businesses. In 2006, these investments totaled approximately $2.4 billion, up from $1.9 billion a year earlier.

This increased level of investment is consistent with the business transformation that the utility began two years ago, and a number of decisions reached by the California Public Utilities Commission (CPUC) in the past year that support capital investment to sustain growth in California and improve existing service.

The analyst meeting will be available to the public via webcast beginning at 8:30 a.m. ET on April 4, 2007 at:

* PG&E Corporation bases guidance on “earnings from operations” in order to provide a measure that allows investors to compare the underlying financial performance of the business from one period to another, exclusive of items that management believes do not reflect the normal course of operations. Earnings from operations are not a substitute or alternative for consolidated net income presented in accordance with generally accepted accounting principles (GAAP). See the financial table below for a reconciliation of guidance on an earnings from operations basis to guidance based on consolidated net income in accordance with GAAP.

This press release contains forward-looking statements regarding management’s guidance for PG&E Corporation’s 2007 and 2008 EPS from operations, targeted average annual growth in EPS from operations over 2007-2011, projected capital expenditures and rate base growth over 2007-2011, projected growth in common stock dividends, and the level of expected future savings to result from the implementation of business transformation initiatives. These statements are based on current expectations and various assumptions which management believes are reasonable, including that the Utility earns at least its authorized rate of return on equity of 11.35 percent. These statements and assumptions are necessarily subject to various risks and uncertainties, the realization or resolution of which are outside of management's control. Actual results may differ materially. Factors that could cause actual results to differ materially include:

  • the Utility’s ability to timely recover costs through rates;
  • the outcome of regulatory proceedings, including ratemaking proceedings pending at the CPUC and the Federal Energy Regulatory Commission;
  • the adequacy and price of electricity and natural gas supplies, and the ability of the Utility to manage and respond to the volatility of the electricity and natural gas markets;
  • the effect of weather, storms, earthquakes, fires, floods, disease, other natural disasters, explosions, accidents, mechanical breakdowns, acts of terrorism, and other events or hazards that could affect the Utility’s facilities and operations, its customers and third parties on which the Utility relies;
  • the potential impacts of climate change on the Utility’s electricity and natural gas operations;
  • changes in customer demand for electricity and natural gas resulting from unanticipated population growth or decline, general economic and financial market conditions, changes in technology including the development of alternative energy sources, or other reasons;
  • operating performance of the Utility’s Diablo Canyon nuclear generating facilities (Diablo Canyon), the occurrence of unplanned outages at Diablo Canyon, or the temporary or permanent cessation of operations at Diablo Canyon;
  • the ability of the Utility to recognize benefits from its initiatives to improve its business processes and customer service;
  • the ability of the Utility to timely complete its planned capital investment projects;
  • the impact of changes in federal or state laws, or their interpretation, on energy policy and the regulation of utilities and their holding companies;
  • the impact of changing wholesale electric or gas market rules, including the California Independent System Operator’s new rules to restructure the California wholesale electricity market;
  • how the CPUC administers the conditions imposed on PG&E Corporation when it became the Utility’s holding company;
  • the extent to which PG&E Corporation or the Utility incurs costs in connection with pending litigation that are not recoverable through rates, from third parties, or through insurance recoveries;
  • the ability of PG&E Corporation and/or the Utility to access capital markets and other sources of credit;
  • the impact of environmental laws and regulations and the costs of compliance and remediation; and
  • the effect of municipalization, direct access, community choice aggregation, or other forms of bypass.

PG&E Corporation Earnings per Common Share (EPS) Guidance

2007 EPS Guidance

  Low High
EPS Guidance on an Earnings from Operations Basis $2.70 $2.80
Estimated Items Impacting Comparability $0.00 $0.00
EPS Guidance on a GAAP Basis $2.70 $2.80

2008 EPS Guidance

  Low High
EPS Guidance on an Earnings from Operations Basis $2.90 $3.00
Estimated Items Impacting Comparability $0.00 $0.00
EPS Guidance on a GAAP Basis $2.90 $3.00