January 3, 2008

Mark Mitchell, Business Manager Engineers and Scientists of California Local 20, IFPTE, AFL-CIO & CLC 350 Frank H. Ogawa Plaza, 8th Floor Oakland, CA 94612 Dear Mr. Mitchell: The Company and Union have concluded negotiations for newly represented Maintenance Planner group at the Diablo Canyon Power Plant. The agreed upon conditions and job descriptions are included as attachments to this agreement. The Company asserts that maintenance planner classifications were properly classified as exempt employees under applicable State and Federal wage and hour laws. Nevertheless, the Company has agreed to classify them as non-exempt employees going forward. If you are in accord with the foregoing and agree thereto, please so indicate in the space provided and return one executed copy of this letter to the Company. Very truly yours, PACIFIC GAS AND ELECTRIC COMPANY

By: Jeff Delaney Principal Negotiator The Union is in accord with the foregoing and agrees thereto as of the date hereof. ENGINEERS AND SCIENTISTS OF CALIFORNIA LOCAL 20, IFPTE, AFL-CIO and CLC

, 2007

By: Mark Mitchell Business Manager

L/A 07-21-ESC Nuclear Maintenance Planner – Diablo Canyon Power Plant

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For the purpose of collective bargaining with respect to rates of pay, wages, hours of employment, and other conditions of employment, the Company recognizes the Union as the exclusive representative of Maintenance Planner classifications in the Maintenance Department at Diablo Canyon Power Plant, based on the Card Count conducted on January 7, 2007. Pursuant to the Neutrality Agreement between the Company and Union, these classifications will be incorporated in to the ESC Agreement pursuant to the conditions provided for in the table agreement dated December 20, 2007. Those conditions are described below. Unless otherwise noted, the term “employee” refers to those in classifications covered in the aforementioned unit certification. Further, unless otherwise noted, employees shall be entitled to rights and coverage under the ESC Agreement as an hourly paid employee. . Maintenance Department – Diablo Canyon Power Plant Job Classification and Descriptions The classifications of Associate Nuclear Maintenance Planner, Nuclear Maintenance Planner and Sr. Nuclear Maintenance Planner shall be established. Specific disciplines include Electrical, Mechanical, I&C and Welding. The job descriptions are shown on Attachment A. Rate of Pay The 2007 hourly rate of pay shall be as shown below: Classification: Associate Nuclear Maintenance Planner Nuclear Maintenance Planner Senior Nuclear Maintenance Planner Min-Max $32.63 – 38.39 $39.38 – 46.81 $46.81 – 49.15

Employees whose pay increase as management employees on January 1, 2007 was not equal to or greater than 3.75% shall receive a wage adjustment retroactive to January 1, 2007 such that their total increase on that date equals 3.75%. The retroactive payment will be made through a lump sum. Employees as of the date of the table agreement (incumbents) shall receive a 5% wage increase, retroactive to November 1, 2007, following ratification. The retroactive payment will be made through a lump sum. The future Progressive Wage Increase (PWI) date for incumbents under Subsection 15.4(b)(1) of the Agreement shall be from November 1, 2007. Employees as of the date of the table agreement (incumbents) shall receive a General Wage Increase (GWI) on January 1, 2008 and PWIs on May 1, 2008 and November 1, 2008, even if the granting of such PWIs result in an employee being paid over the maximum rate of pay for their classification. Thereafter, such employee whose current rate of pay is greater than the maximum rate of pay established for their classification shall continue to receive GWIs as negotiated, but shall not receive PWIs. Employees as of the date of the table agreement shall receive the 2007 STIP award, paid at a flat percentage and not based on individual performance ratings. Overtime eligibility As hourly paid, employees shall be entitled to overtime compensation under the provisions of Title 17, Overtime, of the Agreement. Such overtime compensation shall be paid retroactive to January 1, 2008, provided that the table agreement is ratified no later than January 15, 2008.

L/A 07-21-ESC Seniority Application Seniority shall be determined using the employee’s date of hire at PG&E. Advancement

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Progression from Associate Maintenance Planner to Maintenance Planner is automatic after successfully completing a training program, meeting ANSI Standards and achieving the top rate of pay. All current employees in this group are qualified to be Maintenance Planners. For promotions to Senior Maintenance Planner, prebid codes will be established as specified in Title 21. In filling those positions, the following process will be used: 1) The Company will review the bid list to determine which employees have expressed an interest in the position. Employees must have demonstrated satisfactory performance in their current position and meet minimum qualifications of the new position to be considered for that position. 2) A selection board comprised of two management and two union appointed employees will interview all interested and qualified employees. The selection board will jointly create the interview questions and will consider the employee’s current performance, assessment feedback, interview information and seniority. 3) The selection board will evaluate the candidates against the selection criteria to determine who is most qualified. To the extent that the board cannot agree on which candidate is most qualified and the candidates possess substantially equal qualifications, the most senior candidate will be selected. 4) All candidates will receive feedback on the results of the interview. Initial filling of Senior Construction Planner positions Company shall post and fill Senior Nuclear Maintenance Planner positions in Mechanical, Electrical and I&C within 60 days of ratification. Jurisdiction The provisions of Letter Agreement 99-07 will remain in effect. Further, the following shall apply: 1. The work planning responsibilities currently performed by Kent Rogers shall be transferred to maintenance planning no later than June 1, 2008. 2. Work planning for emergent issues by the Fix-it-Now teams as currently constituted may be performed by non-unit employees. Such work will be transferred to the Unit prior to any Maintenance Planner demotion or layoff. 3. Maintenance support planning may be performed by non-unit PG&E employees appropriate for organizing by ESC Local 20. Maintenance support planning includes, but is not limited to, scaffold, insulation, coatings, temporary power and fire protection. Such work will be transferred to the Unit prior to any Maintenance Planner demotion or layoff. 4. Minor revisions (i.e. “pen and ink changes”) may be performed by non-Unit employees. Minor revisions are defined as those that do not change the scope or intent of the work document. Hours of work There will be no change to current work schedules as a result of the conversion of employees to hourly paid status. Demotion and layoff rights Displacements will follow Title 22 of the Agreement within each classification and discipline.

L/A 07-21-ESC Performance Standards The subcommittee will continue to develop and finalize standards.

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Certification and Registration Employees shall be reimbursed by Company for reasonable costs incurred for activities that add to effectiveness in the current job or contribute to acquiring qualifications, including successful completion of training, for positions to which the employee could reasonably expect to advance consistent with the organization’s current practice. Examples include: maintaining professional membership, earning professional certification, registration, subsequent renewals, class participation, and conference attendance. Supervisor will distribute opportunities (e.g. conference attendance, magazine subscriptions, etc.) among employees in the same classification as equally as is practicable. Continuing Committee A sub-committee shall continue to meet to finalize the job descriptions by completing the numbered list of job functions which shall be added to the attached job descriptions.

L/A 07-21-ESC

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Attachment A: Job Descriptions

Nuclear Maintenance Planner
Duties: An employee who develops work packages for design modification, corrective maintenance, preventive maintenance, and recurring tasks to comply with plant licensing documents, regulatory commitments, technical specifications, preventive maintenance, and equipment qualification programs. Responds to impact reviews by engineering and revises maintenance work orders accordingly to maintain plant configuration. Work instructions and packages include engineering drawings, plant administrative procedures, maintenance and construction procedures, vendor recommendations and other governing documents and specifications. The Planner assists in determining post maintenance testing (PMT) requirements, as well as initial clearance, initial ALARA (radiation protection information), and initial foreign material exclusion (FME) program information. The Planner identifies required parts, special tools, and material; coordinates generation of support activities, promotes proper industrial safety practices; and employs human performance error reduction techniques. Performs job walkdowns to identify potential work activity interference. May develop as-built drawings and required field changes. Performs the final work package closure. Interface and assist various departments with the development of permanent and temporary design changes. Participates in plant system teams in developing or modifying preventive maintenance basis and plant modifications. Supports the daily and outage work control processes by meeting process milestones, managing work load, and satisfying activity and milestone due dates, completing work orders, attending meetings and training, and maintaining required qualifications. Participates in the performance improvement processes. Assists in the resolution of technical and work process issues. Requirements: Five (5) years related discipline trade experience, or Completion of an approved discipline apprenticeship (desired), and a high school diploma or equivalent. OR Two (2) years experience in maintenance, engineering or nuclear plant operations, and an associate’s degree in engineering or related physical science. OR One (1) year experience in maintenance, engineering or nuclear plant operations, and a B.S. degree in engineering or related physical science.

L/A 07-21-ESC

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Understanding of drawings, schematics, diagrams and other technical material. Basic software skills (word, excel, power point, access).

Senior Nuclear Maintenance Planner
Duties: An employee who performs the duties of a Nuclear Maintenance Planner and may be required to perform such additional duties as developing training programs; performing training; directing the work, and reviewing and approving the work, of a Nuclear Maintenance Planner or Associate Nuclear Maintenance Planner; reviewing and assisting supervisors in coordinating and scheduling work assignments. It is also recognized that such duties as developing training, conducting training, directing the work of others and reviewing and approving the work of Nuclear Maintenance Planner may also be performed by non-unit supervisors. Requirements: Must have three years of plant experience as a Nuclear Maintenance Planner in the discipline that is being filled. Disciplines include I&C; Mechanical; Electrical; and Welding.

Associate Nuclear Maintenance Planner
Duties: A beginning level classification that will perform, after training, the full duties of a Nuclear Maintenance Planner. Requirements: Meet current pre-employment testing standards and successfully pass the entrance examination. Have completed an AA or AS in engineering or related field or equivalent experience.