New Agreement to Provide Enough Renewable Electricity for Nearly

100,000 PG&E Customers

SAN FRANCISCO, March 6 /PRNewswire-FirstCall/ -- Pacific Gas and Electric Company announced it has entered into a contract with Military Pass- Newberry Volcano Project, LLC to purchase up to 120 megawatts (MW) of renewable geothermal energy resources to help meet its customers' future electricity needs. Electric generation from this renewable energy resource will provide enough power to supply nearly 100,000 PG&E customers.

"The addition of this geothermal generation further adds to PG&E's diverse and renewable energy resources and ensures that more than thirty percent of our northern and central California customers' energy needs will come from hydroelectricity and renewable sources," said Fong Wan, vice president of Energy Procurement. "These new resources will add to a generating portfolio that already has one of the lowest rates of air emissions in the country."

PG&E has a long history of developing, generating, and purchasing renewable power. The utility currently supplies 30% of its customer load from renewable resources: 18% from its large hydroelectric facilities and 12% from smaller renewable resources that qualify under the State's Renewable Portfolio Standard (RPS) Program. This agreement represents another milestone for PG&E towards its goal of supplying 20% of customer needs with qualifying renewable energy under the RPS program.

This is the final contract originating from the 2004 RFO solicitation and brings the total renewable generation added as a result to 353 MW. PG&E is currently in discussion with certain market participants that submitted bids in the 2005 RFO solicitation and will be submitting additional contracts for renewable energy in the next few months.

To continue to increase its renewable energy portfolio, PG&E recently filed protocols with the CPUC for its 2006 renewable energy procurement solicitation. In this upcoming solicitation for additional generation from renewable resources, the company is seeking to procure an additional 1-2 percent of its customers' electricity needs through renewable sources. PG&E anticipates issuing the solicitation in early summer, after receiving the necessary CPUC approval. The 2006 RPS solicitation will be PG&E's fourth competitive solicitation for renewable energy since 2002. Since then, it has entered into contracts for 563 MW of renewable power from wind, geothermal, biomass, and hydro resources, including the contract signed today.

California's RPS Program requires each utility to increase its procurement of eligible renewable generating resources by 1% of load per year to achieve a 20% renewables goal. The RPS Program was passed by the Legislature and is managed by California's Public Utilities Commission and Energy Commission.

For more information about Pacific Gas and Electric Company, please visit the company's web site at www.pge.com. SOURCE Pacific Gas and Electric Company