EXHIBIT 12.2 PACIFIC GAS AND ELECTRIC COMPANY AND SUBSIDIARIES COMPUTATION OF RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS - --------------------------------------------------------------------------------------------------- Nine Months Year ended December 31, Ended ---------------------------------------------------------- (dollars in thousands) Sept. 30, 1995 1994 1993 1992 1991 1990 - --------------------------------------------------------------------------------------------------- Earnings: Net income $1,111,800 $1,007,450 $1,065,495 $1,170,581 $1,026,392 $ 987,170 Adjustments for minority interests in losses of less than 100% owned affiliates and the Company's equity in undistributed losses (income) of less than 50% owned affiliates 830 (2,764) 6,895 (3,349) 26,671 (2,799) Income tax expense 783,735 836,767 901,890 895,126 851,534 881,647 Net fixed charges 538,396 730,965 821,166 802,198 776,682 812,568 ---------- ---------- ---------- ---------- ---------- ---------- Total Earnings $2,434,761 $2,572,418 $2,795,446 $2,864,556 $2,681,279 $2,678,586 ========== ========== ========== ========== ========== ========== Fixed Charges: Interest on long- term debt $ 478,571 $ 651,912 $ 731,610 $ 739,279 $ 697,185 $ 699,849 Interest on short- term borrowings 57,485 77,295 87,819 61,182 77,760 110,982 Interest on capital leases 1,833 1,758 1,737 1,737 1,737 1,737 Capitalized Interest 528 2,660 46,055 6,511 6,107 7,214 Pretax earnings required to cover the preferred stock dividend requirements of majority owned subsidiaries 864 - - - - - ---------- ---------- ---------- ---------- ---------- ---------- Total Fixed Charges 539,281 733,625 867,221 808,709 782,789 819,782 ---------- ---------- ---------- ---------- ---------- ---------- Preferred Stock Dividends: Tax deductible dividends 8,515 4,672 4,814 5,136 5,136 5,136 Pretax earnings required to cover non-tax deductible preferred stock dividend requirements 62,015 96,039 108,937 130,147 154,404 175,881 ---------- ---------- ---------- ---------- ---------- ---------- Total Preferred Stock Dividends 70,530 100,711 113,751 135,283 159,540 181,017 ---------- ---------- ---------- ---------- ---------- ---------- Total Combined Fixed Charges and Preferred Stock Dividends $ 609,811 $ 834,336 $ 980,972 $ 943,992 $ 942,329 $1,000,799 ========== ========== ========== ========== ========== ========== Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends 3.99 3.08 2.85 3.03 2.85 2.68 - --------------------------------------------------------------------------------------------------- <FN> Note: For the purpose of computing the Company's ratios of earnings to combined fixed charges and preferred stock dividends, "earnings" represent net income adjusted for the minority interest in losses of less than 100% owned affiliates, the Company's equity in undistributed income or loss of less than 50% owned affiliates, income taxes and fixed charges (excluding capitalized interest). "Fixed charges" include interest on long-term debt and short-term borrowings (including a representative portion of rental expense), amortization of bond premium, discount and expense, interest on capital leases and the pretax earnings required to cover the preferred stock dividend requirements of majority owned subsidiaries. "Preferred stock dividends" represent the sum of requirements for preferred stock dividends that are deductible for federal income tax purposes and requirements for preferred stock dividends that are not deductible for federal income tax purposes increased to an amount representing pretax earnings which would be required to cover such dividend requirements.