February Natural Gas Bills Down 31% Over Last Month Conservation and Mild Winter Nationwide Reflect Sharp Downturn in Forecasted Natural Gas Costs

SAN FRANCISCO, Feb. 1 /PRNewswire-FirstCall/ --

Summary: The cold weather that gripped much of the nation during the first part of December has turned warmer than normal, resulting in a significant drop in heating demand nationwide. Here in California, PG&E customers appear to be conserving gas above and beyond the dictates of weather. After factoring in weather, PG&E's customers used less natural gas during November and December compared the same period in 2004. Nonetheless, natural gas bills will remain higher than February 2005, reflecting the national market taking a longer term outlook on tight supplies. As a result, natural gas bills for PG&E's residential customers will be 23.3 percent higher this February compared to last year, with total average gas bills expected to be $107.44 for the month.

This compares to last month's average residential bill of $156.42.

Analysis: The decrease in demand and milder weather has resulted in a sharp decline in both spot and forward prices for natural gas. Because of the warmer temperatures and drop in demand, storage facilities continue to have enough gas supply for PG&E's residential customers throughout the winter season. When prices peaked in mid- December, there was uncertainty about supplies for the entire nation. However, storage levels on the West coast are currently well above the previous five-year high for this time of year. Despite the decline in natural gas prices and ample storage outlook, a cold snap could still impact this volatile market.

10/20 Winter Savings Program: Preliminary reports show that PG&E's residential customers are reducing natural gas usage on average 12.5 percent. Residential and small business customers who reduce usage by at least 10 percent cumulatively January though March 31, 2006 compared to the same period last year will earn a 20 percent rebate for all three winter months. To track their progress and use free online energy-savings tools, customer can visit www.pge.com/1020.

Residential Natural Gas Cost Comparison:

AVERAGE February January Percentage February Percentage

RESIDENTIAL 2006 2006 Change 2005 Change

CUSTOMER

Therms of Gas

Used 79 90 -12.2% 79 0.0%

Gas Procurement

Cost

(per therm) $0.890 $1.268 -29.8% $0.671 32.6%

Ave.

Transportation

Charge (per

therm) $0.420 $0.420 0.0% $0.391 7.4%

Total Rate $1.310 $1.688 -22.4% $1.062 23.4%

Public

Purpose

Program

Surcharge $0.050 $0.050 0.0% $0.041 22.0%

Total Rate

(including

PPP Surcharge) $1.360 $1.738 -21.7% $1.103 23.3%

Total Natural

Gas Bills

(including PPP

Surcharge) $107.44 $156.42 -31.3% $87.14 23.3%

Notes: Using recorded average monthly use (from GH most recent month available) and average transportation rate for bill calculation. Therm: A measurement for natural gas. One therm contains thermal energy equivalent to 100,000 British thermal units. Procurement: The cost of the natural gas itself delivered to PG&E's local transmission system. Procurement costs fluctuate on a monthly basis, based on market prices. Transportation: The cost of transporting the gas to PG&E's customers on PG&E's local transmission and distribution system. The transportation rate included here is an annual average of the baseline and excess rates.

Public Purpose Program (PPP) Surcharge: Prior to March 1, 2005, the transportation rate included public purpose program surcharges mandated by state. In compliance with D. 04-08-010, issued August 19, 2004, gas PPP surcharges are removed from gas transportation rates effective March 1, 2005. SOURCE Pacific Gas and Electric Company