Utility Advises Customers of Higher Energy Bills SAN FRANCISCO, Oct. 1 /PRNewswire-FirstCall/ -- Pacific Gas and Electric Company advised customers that electricity prices will be increasing effective today, October 1, due to higher power purchase costs incurred in 2008. Below normal seasonal rainfall has resulted in drought conditions that reduced the amount of hydroelectric power available for PG&E to provide customers. This and higher natural gas prices are the two main factors leading to higher electricity prices. To reduce the rate impact to customers, PG&E is proposing to collect these increased costs during the next 15 months. Today, PG&E also provided the California Public Utilities Commission with a preliminary estimate of the costs it expects to incur to meet customer electricity needs in 2009. This preliminary estimate includes a forecast of 2009 electric power purchase costs that was originally submitted to the CPUC in the summer of 2008, when natural gas prices were higher than current projections. PG&E will update its forecast of 2009 electric power purchase costs in November to reflect current natural gas prices. The company said it is optimistic that when this update is incorporated into the 2009 rate projection, it will potentially be able to avoid an electric rate increase on January 1, 2009. "While the price increase projections in January look better than we originally thought, we want to make sure our customers know about any possible energy price increases as soon as possible, so they can begin to prepare," said Tom Bottorff, PG&E's senior vice president of regulatory relations. "PG&E has taken several measures to help protect customers from bill increases, and we urge our customers to take advantage of the many programs and options available to them." What Customers Can Do to Lower Their Bills -- Focus on Energy efficiency: PG&E offers more than 82 distinct energy efficiency programs to help residential and commercial customers reduce their natural gas and electric use. For more information, please visit http://www.pge.com/myhome/saveenergymoney/energysavingprograms/ -- Become a Demand Response Customer: Residential and commercial customers can participate in tailored programs that help save money and ease demand on the electrical grid during peak hours. More information can be found by visiting http://www.pge.com/demandresponse/. -- Sign-up for CARE: Eligible low or fixed income customers can save up to 20 percent on their energy bill using PG&E's low or fixed income discount program. For more information, please visit http://www.pge.com/care/. The October 1, 2008, rate increase deals with electric procurement costs incurred in 2008, and is discussed in a filing submitted on September 30, 2008. Increased costs of natural gas and a decrease in hydroelectric production have driven electricity costs up by approximately $645 million, resulting in an average bundled rate increase of roughly 6 percent, to be collected through December 2009. The second filing, made today, is a preliminary estimate of all proposed electric rate changes to be effective on January 1, 2009. While this preliminary estimate projects a revenue requirement increase of $281 million, resulting in an average rate increase starting January 1, 2009 of 2.6%, the estimate includes a forecast of 2009 electric power procurement costs that was prepared last summer when natural gas prices were much higher than current forecasts. PG&E will update its forecast of 2009 electric power procurement costs later this year and is optimistic that when this update is incorporated into the 2009 rate projection it will be able to avoid an electric rate increase on January 1, 2009. Under PG&E's rate structure, the company does not earn a profit on energy it purchases for customers; the energy is sold to customers at the same price at which PG&E buys it from wholesale sellers. Pacific Gas and Electric Company, a subsidiary of PG&E Corporation, is one of the largest combined natural gas and electric utilities in the United States. Based in San Francisco, with 20,000 employees, the company delivers some of the nation's cleanest energy to 15 million people in northern and central California. For more information, visit http://www.pge.com/about/. DATASOURCE: Pacific Gas and Electric Company CONTACT: PG&E News Department, +1-415-973-5930 Web site: http://www.pge.com/

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