PRESS RELEASES 2004
FOR IMMEDIATE RELEASE
April 21, 2004
ISSUED BY:   Corporate Communications 1-800-743-6397

PG&E CORP. REAFFIRMS POSITIVE OUTLOOK IN REPORT TO SHAREHOLDERS

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(San Francisco) - At its annual shareholders meeting today, PG&E Corporation (NYSE: PCG) reaffirmed the company's financial and operational health and again stated its aspiration to declare a common stock dividend by the second half of 2005.

"Since the start of 2004, your company's core business - Pacific Gas and Electric Company - has regained its investment grade credit rating, repaid all creditors in full and with interest, reduced customers' electric rates by $800 million, and created a path for PG&E Corporation to resume paying a common stock dividend by the second half of 2005," said PG&E Corporation Chairman, President and CEO Robert D. Glynn, Jr.

Glynn said that, having restored its financial health and reached long-term agreements with its regulators and labor unions, the company has entered a period it expects will be uniquely stable. The company reaffirmed the 2004 earnings guidance it issued previously when it reported its year-end and fourth-quarter 2003 financial results.

The company said it intends to make substantial investments to maintain and improve California's energy infrastructure, at a rate of approximately $1.5 billion per year for the next five years. These investments will enable Pacific Gas and Electric Company to keep pace with customer growth and maintain reliability.

Glynn said the company is also continuing to back legislation now under way in the California legislature that would enable the company to refinance a portion of its balance sheet at a lower cost, and thereby provide those further savings to utility customers, in addition to the $800 million electric rate reduction recently approved for 2004.

As it enters a period of greater stability, Glynn also said the company looks forward to reconnecting with the communities it serves. "An active role in our communities has been a part of PG&E's identity throughout its history. The restoration of our financial health enables us to re-energize those relationships and reinforce our shared interests, including making sure that California remains a great place to live and work." As examples, he cited new commitments to increase support for community organizations, major new environmental commitments, continuing efforts to promote energy efficiency and safety, and a new initiative to explore clean energy technologies.

The full text of the prepared remarks presented at today's meeting will be available today on PG&E Corporation's website, www.pgecorp.com.

This press release contains forward-looking statements regarding estimated earnings for 2004. These statements are based on current expectations and assumptions which management believes are reasonable and on information currently available to management but are necessarily subject to various risks and uncertainties. Actual results could differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause future results to differ materially include:

The timing and resolution of the petitions for review that were filed in the California Court of Appeal seeking review of the CPUC's December 18, 2003 decision approving the Settlement Agreement and the CPUC's March 16, 2004 denial of applications for rehearing of the December 18, 2003 decision; and the timing and resolution of the pending appeals of the bankruptcy court's order confirming the Plan of Reorganization;

Unanticipated changes in operating expenses or capital expenditures;

The level and volatility of wholesale electricity and natural gas prices and supplies, and the Utility's ability to manage and respond to the levels and volatility successfully;

Weather, storms, earthquakes, fires, floods, other natural disasters, explosions, accidents, mechanical breakdowns and other events or hazards that affect demand, result in power outages, reduce generating output, or cause damage to the Utility's assets or operations or those of third parties on which the Utility relies;

Unanticipated population growth or decline, changes in market demand and demographic patterns, and general economic and financial market conditions, including unanticipated changes in interest or inflation rates;

The extent to which the Utility's residual net open position (i.e., the amount of electricity the Utility needs to meet its customers' electricity demands that is not provided by Utility-owned generation, Utility power purchase contracts, or the electricity provided by the California Department of Water Resources, or DWR, and allocated to the Utility) increases or decreases due to changes in customer and economic growth rates, the periodic expiration or termination of Utility or DWR power purchase contracts, the reallocation of the DWR power purchase contracts, whether various counterparties are able to meet their obligations under their power sale agreements with the Utility or with the DWR, the retirement or other closure of the Utility's electricity generation facilities, the performance of the Utility's electricity generation facilities, and other factors;

The operation of the Utility's Diablo Canyon nuclear power plant, which exposes the Utility to potentially significant environmental and capital expenditure outlays;

Actions of credit rating agencies;

Acts of terrorism;

The outcome of pending litigation, rate cases, including the 2003 General Rate Case and other regulatory proceedings;

The impact of future legislative or regulatory actions;

How the CPUC administers the capital structure, stand-alone dividend and first priority conditions of the CPUC's decisions permitting the establishment of holding companies for California investor-owned electric utilities;

Whether the Utility is in compliance with all applicable rules, tariffs and orders relating to electricity and natural gas utility operations, and the extent to which a finding of non-compliance could result in customer refunds, penalties or other non-recoverable expenses;

Whether the Utility is required to incur material costs or capital expenditures or curtail or cease operations at affected facilities to comply with existing and future environmental laws, regulations and policies;

Increased competition as a result of the takeover by condemnation of the Utility's distribution assets, duplication of the Utility's distribution assets or service by local public utility districts, self-generation by its customers and other forms of competition that may result in stranded investment capital, decreased customer growth, loss of customer load, and additional barriers to cost recovery; and

The extent to which the Utility's distribution customers switch between purchasing electricity from the Utility and from alternate energy service providers as direct access customers and the extent to which cities, counties and others in the Utility's service territory begin directly serving the Utility's customers or combine to form community choice aggregators.


 

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