Moody's on July 22 revised its outlook on PG&E Corp. and PacificGas and Electric Co. to positive, noting it could upgrade the companiesover the next year depending on the outcome of legal proceedings tied to the 2010San Bruno pipeline explosion.

Pacific Gas & Electric is facing 12 felony counts of violatingthe Natural Gas Pipeline Safety Act, as well as a count of obstructing the NTSB'sinvestigation into the San Bruno incident.

"Though there is still an ongoing federal criminal trialagainst the company regarding pipeline operations, we believe the risk is relativelycontained and does not pose a serious downside to PG&E's credit profile,"Moody's Vice President and Senior Credit Officer Toby Shea said in a July 22 note.

Moody's said the positive outlook also reflects a supportiveCalifornia regulatory environment.