PRESS RELEASES 2001 RELEASE
FOR IMMEDIATE RELEASE
October 29, 2001
Contact: Jim Lewis (301) 280-6553, PG&E National Energy Group
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GOV. ENGLER BREAKS GROUND ON COVERT POWER PLANT

Project Commits $2 Million to Benefit Community Programs

COVERT, Mich.--Helping to meet Michigan's growing energy needs, Gov. John Engler today joined PG&E Corporation's (NYSE: PCG) PG&E National Energy Group (PG&E NEG) officials in breaking ground for the 1,170-megawatt gas-fired Covert Generating Plant. Company representatives also announced the establishment of a community foundation and committed $2 million to benefit the township's civic, charitable, educational, cultural and environmental programs.

Upon completion of construction, Covert Generating Plant, located about 48 miles west of Kalamazoo, will be a "merchant" facility, selling its output primarily in the competitive wholesale markets via the lines of Michigan Electric Transmission Company, a subsidiary of Consumers Energy. The new plant, scheduled to begin operating in the summer of 2003, is designed to produce enough electricity to power approximately 1 million homes.

"The Covert Generating Plant is an excellent example of what can be accomplished when the State and private industry work together closely to meet not only the electrical power needs of Michigan residents, but the community outreach, educational, and environmental goals of the state as well," said Gov. Engler. "This is truly a partnership that benefits Michigan at every level."

State Rep. Mary Ann Middaugh and other state, county, local and PG&E NEG officials also participated in the event.

Covert Generating Company created the Covert Township Community Foundation and presented its initial contribution of $1 million at the groundbreaking ceremony. Covert Generating committed an additional $1 million to support the foundation during the first 15 years of the plant's operation. The foundation's advisory board will consist of township, business and community leaders.

"Our involvement in the community is every bit as important to us as our involvement in providing clean, reliable, affordable power. We are pleased to make a contribution that will help anchor the Covert Community Improvement Foundation," said Chris Iribe, president and chief operating officer of PG&E NEG's East Region. "Following a strong working relationship with county, township and state officials, we're proud to be entering the Midwest's competitive power market."

Covert Generating Company, LLC, is a wholly owned, indirect subsidiary of PG&E NEG. Headquartered in Bethesda, Md., PG&E NEG develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services.

This news release contains forward-looking statements regarding the plans and objectives of PG&E National Energy Group with respect to the Covert Generating Plant. These statements are subject to a number of risks and uncertainties. Actual results could differ materially from those expressed or implied in any forward-looking statements. Some of the key factors that could cause actual results to differ materially include, but are not limited to; (i) changes in government regulations, including federal and state regulation of the electric energy and natural gas industry, particularly in California where it remains uncertain what measures will be adopted by state and federal regulators to address the current California energy crisis and what the effect of such measures would be on PG&E National Energy Group's plans and operations; (ii) the extent to which current or planned development of generating facilities are completed and the pace and cost of that completion, including the extent to which commercial operations of these development facilities are delayed or prevented because of various development, construction and operation risks, such as the failure to obtain financing, necessary permits or equipment, the failure of third-party contractors to perform their contractual obligations, and the failure of necessary equipment to perform as anticipated; (iii) development and operation of competing power plants; (iv) fluctuations in natural gas and electricity prices and the ability to successfully manage such price fluctuations; (v) the risks associated with marketing and selling power from power plants in the newly competitive energy market; and, (vi) the other risks identified from time to time in PG&E Corporation's and PG&E National Energy Group's reports filed with the Securities and Exchange Commission.

 

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