EXHIBIT 12 PG&E Gas Transmission, Northwest Corporation Computation of Ratio of Earnings to Fixed Charges (Dollars in Millions) Years Ended December 31, ---------------------------------------------------------- Ratio of Earnings to Fixed Charges 1998 1997 1996 1995 1994 - -------------------------------------------------------------------------------------------------------- Earnings: Income from continuing operations $ 60.3 $ 42.1 $ 43.5 $ 51.6 $ 47.7 Adjustments: Income taxes 35.7 24.8 28.8 31.3 30.0 Fixed charges (as below) 44.1 46.7 46.3 48.2 47.4 ---------------------------------------------------------- Total adjusted earnings $140.1 $113.6 $118.6 $131.1 $125.1 ========================================================== Fixed charges: (a) Net interest expense $ 43.0 $ 46.0 $ 45.7 $ 46.3 $ 45.6 Adjustments: Interest component of rents 0.1 0.4 0.3 0.7 0.9 AFUDC debt 1.0 0.3 0.3 1.2 0.9 ---------------------------------------------------------- Total fixed charges $ 44.1 $ 46.7 $ 46.3 $ 48.2 $ 47.4 ========================================================== Ratio of earnings to fixed charges 3.2 2.4 2.6 2.7 2.6 ========================================================== (a) There were no shares of preferred stock issued or outstanding during any of the five years ended December 31, 1998, and therefore there were no fixed charges related to preferred stock during these periods.