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PG&E Directors Commission Independent Study of Utility's Natural Gas System

Release Date: December 2, 2010
Contact: PG&E External Communications (415) 973-5930

SAN FRANCISCO, CA–The Boards of Directors of PG&E Corporation (NYSE: PCG) and Pacific Gas and Electric Company announced today that they have retained Process Performance Improvement Consultants (PPIC), a unit of the Blacksmith Group, to conduct an independent review of PG&E's natural gas transmission and distribution system practices. The review, following the September 9, 2010, San Bruno, California natural gas transmission line accident, is intended to identify key industry model practices and steps PG&E can take to provide confidence it is following those practices in the operation and maintenance of its natural gas system.

The review will include an assessment of current and emerging industry practices relating to gas transmission and distribution system inspection, accident prevention, maintenance, capital and expense planning, and engineering. It also will include an evaluation of PG&E's safety practices and culture, and recommend changes where appropriate. The review is expected to be completed by the third quarter of 2011. The work by PPIC will be overseen by a Special Review Committee of the Boards of Directors comprised solely of independent outside directors.

While the California Public Utilities Commission and the National Transportation Safety Board both have investigations into the accident and its cause underway, the Boards of PG&E Corporation and Pacific Gas and Electric Company have concurrently initiated an independent, forward-looking review of leading industry practices relating to PG&E's natural gas operations to provide an added measure of focus on public safety practices by the company.

PG&E's lead independent director, Lee Cox, said, "While others are looking into the cause of the tragic accident in San Bruno, the Board feels it is important to thoroughly and independently evaluate the company's natural gas transmission and distribution practices to make sure PG&E emerges from this tragedy as an industry leader in gas pipeline safety and operations. We owe no less to our customers and our shareholders."

Cox added that the Board will make public the findings of the review once it has been completed, and that it will work with company management to achieve rapid and appropriate action on any recommendations contained in the review.

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