All Source Long-Term Request for Offers

Form of Letter Of Credit: Appendix C All Source Long-Term Request for Offers

FORM OF LETTER OF CREDIT

Issuing Bank Letterhead Address

Date: ______

Irrevocable Standby Letter of Credit Number:______

Beneficiary: Pacific Gas and Electric Company Applicant: ______77 Beale Street, Mail Code B28L Address: ______San Francisco, CA 94105 ______Attn: Credit Risk Management

[Advising Bank, if applicable] [Confirming Bank, if applicable]

Amount: USD [Amount] US Dollars [Spell out amount in words]

We hereby issue our Irrevocable Standby Letter of Credit at this office in your favor for the account of [Applicant] by sight payment against the following documents:

1. Your sight draft drawn on us marked “drawn under [Issuing Bank] [Letter of Credit Number] dated [Date]”;

2. Beneficiary’s signed statement certifying:

A. “The bidder has forfeited its Offer Deposit per the terms of Pacific Gas and Electric Company’s Long Term Request For Offers, dated April 1, 2008, and as agreed by bidder under the Long Term Request for Offers Agreement;” or

B. “ The bidder has entered into a Purchase and Sale Agreement with Beneficiary in connection with Pacific Gas and Electric Company’s Long Term Request For Offers dated April 1, 2008, and has failed to post performance assurance or is otherwise in default pursuant to the terms of such agreement,” or

C. “The date of this certificate is within thirty (30) days of the Expiration Date and, as of the date hereof, Pacific Gas and Electric Company has not received substitute security that satisfies the requirements of Pacific Gas and Electric Company’s Long Term Request For Offers dated April 1, 2008, ” or

D. “ The date of this certificate is within seven (7) days of the date the bidder was obligated to provide replacement security pursuant to the requirements of Pacific Gas and Electric Company’s Long Term Request For Offers dated April 1, 2008 (the

All Source RFO: Revised 03-27-08 02759c071908f5d1fc8022deac542a32.doc Page 1 of 2 Form of Letter Of Credit: Appendix C All Source Long-Term Request for Offers

“RFO”), and, as of the date hereof, PG&E has not received replacement security that satisfies the requirements of the RFO.”

The Expiration Date shall be the earlier of: (i) [insert date consistent with the requirements of Section V.C. of the RFO]; and (ii) the date on which we receive the original of this Letter of Credit as returned by Beneficiary.

Special Conditions:

1. Partial drawing(s) are permitted. 2. All banking charges associated with this Letter of Credit are for the account of the Applicant. 3. Documents are to be presented to this office no later than the Expiration Date. 4. This Letter of Credit is not transferable.

We hereby engage with you that draft(s) drawn under and in compliance with the terms of this Letter of Credit will be duly honored if drawn and presented for payment at any time before the close of business [Time] at our counters located at [address] on or before the Expiration Date or in the event of Force Majeure, as defined under Article 36 of the Uniform Customs and Practice for Documentary Credits (2007 Revision) International Chamber of Commerce Publication No. 600 (“UCP”), interrupting our business, within thirty (30) days after resumption of our business, whichever is later.

Except as otherwise stated herein, this credit is subject to the UCP and, with respect to matters not so covered, this Letter of Credit is subject to and governed by the laws of the State of New York.

If you have any questions regarding this Letter of Credit, please call [Issuing Bank Contact Name] at [Insert Phone Number].

By: Authorized Signature

Title: ______

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