PRESS RELEASES 2001 RELEASE
FOR IMMEDIATE RELEASE
December 19, 2001
Contact: News Department (415) 973-5930
EDITORS: Please do not use "Pacific Gas and Electric" or "PG&E" when referring to PG&E Corporation or its National Energy Group. The PG&E National Energy Group is not the same company as Pacific Gas and Electric Company, the utility, and is not regulated by the California Public Utilities Commission. Customers of Pacific Gas and Electric Company do not have to buy products or services from the National Energy Group in order to continue to receive quality regulated services from Pacific Gas and Electric Company.

PG&E CORPORATION AND PACIFIC GAS AND ELECTRIC COMPANY FILE AMENDED PLAN OF REORGANIZATION AND DISCLOSURE STATEMENT

Fact Sheet on Amended Plan and Disclosure Statement

SAN FRANCISCO - PG&E Corporation (NYSE: PCG) and Pacific Gas and Electric Company today will file an amended plan of reorganization and disclosure statement in U.S. Bankruptcy Court, according to the schedule established by the Court. The hallmarks of the plan remain paying all valid claims in full without asking the state for a bailout or the Court to raise rates.

The amended plan contains no substantive changes. The revisions to the disclosure statement represent efforts to resolve the objections filed by clarifying specific issues and providing additional information requested by creditors.

The revised disclosure statement also clarifies preemption issues that arise from the plan. In the filing, the utility and PG&E Corporation reaffirm that after adoption of the plan, all of its businesses will continue to be subject to all applicable federal, state and local public health, safety and environmental laws and regulations. Approximately 70 percent of the current utility assets, including the rates retail customers pay for electricity and natural gas, will continue to remain under California Public Utilities Commission (CPUC) regulation.

The Federal Energy Regulatory Commission (FERC) will retain jurisdiction over the licenses of the hydroelectric assets and the rates, terms and conditions of service provided by the electric transmission company. The Nuclear Regulatory Commission will continue to regulate the operation of Diablo Canyon Power Plant.

FERC will assume jurisdiction to regulate wholesale rates for the power from the generation assets, which under state law prior to this year were scheduled to move to FERC regulation in 2002, and over the wholesale rates, terms and conditions of service for the gas transmission system, which in most other states are already FERC-regulated.

The utility and new business units plan to follow the normal state and local processes to obtain transfers of licenses and permits under the plan and do not anticipate the need to preempt local and state ordinances relating to these approvals. The amended disclosure statement lists some 37 CPUC laws and regulations that the company believes would be preempted, out of the thousands of laws and regulations under which the utility operates, in order to complete the transfer of certain assets and establish three new California-based companies under the plan. Unless preempted, these specific CPUC laws and regulations could restrict the transfer of property and issuance of new securities required to implement the plan.

There are only three ways for Pacific Gas and Electric Company to emerge from bankruptcy - rate increase or bailout, sale of assets to third parties or reorganization and refinancing - and each of these options would require a preemption of state law. By choosing to reorganize and refinance, PG&E chose the path that would present the fewest conflicts with state laws and regulations.

"Our plan ensures that all of the existing Pacific Gas and Electric Company operations remain available to meet California's energy needs, that they will continue to be operated by our experienced, hard-working team of employees, and that our customers will continue to receive the same safe, reliable and responsive service," said Gordon R. Smith, president and chief executive officer of Pacific Gas and Electric Company. "We have developed a plan that uses the value of our assets to pay our creditors and do not ask the state for a bailout or the Bankruptcy Court to raise retail rates."

PG&E will seek new franchise agreements as needed for the electric and gas transmission businesses. As a result, it anticipates that California local governments will continue to receive at least the same level of franchise fees they have received historically.

In a separate filing with the Bankruptcy Court, Pacific Gas and Electric Company will ask for an extension of the exclusivity period for its plan of reorganization. The extension, until June 30, 2002, will allow the utility to continue its efforts to complete the confirmation process by the end of the second quarter of 2002.


 

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