EXHIBIT 12.1 Pacific Gas Transmission Company Computation of Ratio of Earnings to Fixed Charges (Dollars in Millions) Years Ended December 31, ----------------------------------- Ratio of Earnings to Fixed Charges 1996 1995 1994 1993 1992 ---------------------------------- ----- ----- ------ ------ ------ Earnings: Income from continuing operations $43.1 $51.6 $47.7 $6.3 $2.2 Adjustments: Income taxes 28.9 31.3 30.0 (12.2) (4.0) Fixed charges (as below) 46.3 48.2 47.4 27.2 22.8 ----- ----- ------ ------ ------ Total adjusted earnings $118.3 $131.1 $125.1 $21.3 $21.0 ======= ====== ====== ====== ====== Fixed charges: (a) Net interest expense $45.7 $46.3 $45.6 $11.7 $4.7 Adjustments: Interest component of rents 0.3 0.7 0.9 0.8 0.8 AFUDC debt 0.3 1.2 0.9 14.7 17.3 ------ ------ ------ ------ ------ Total fixed charges $46.3 $48.2 $47.4 $27.2 $22.8 ====== ====== ====== ====== ====== Ratio of earnings to fixed charges 2.6 2.7 2.6 0.8 0.9 ====== ====== ====== ====== ====== Deficiency of earnings to cover fixed charges N/A N/A N/A ($5.9) ($1.8) ====== ====== ====== ====== ====== Years Ended December 31, Ratio of Earnings Before Net Gas Supply ----------------------------------- Restructuring (GSR) Costs to Fixed Charges 1993 1992 ---------------------------------- ------ ------ Total adjusted earnings, as above $21.3 $21.0 GSR costs, net of GSR recoveries 51.0 37.5 ------ ------ Total adjusted earnings before net GSR costs $72.3 $58.5 ====== ====== Total fixed charges, as above $27.2 $22.8 ====== ====== Ratio of earnings before net GSR costs to fixed charges 2.7 2.6 ====== ====== - ------------------ <FN> (a) There were no shares of preferred stock issued or outstanding during any of the five years ended December 31, 1996, and therefore there were no fixed charges related to preferred stock during these periods. </FN>