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PG&E NATIONAL ENERGY GROUP COMPLETES $1.075 BILLION FINANCING FACILITY

Funds to be Used for New Power Plants Under Construction

PG&E Corporation's PG&E National Energy Group announced today that it has closed the first tranche of a multi-project construction financing facility. This $1.075 billion loan facility will be used in financing of the Athens, Harquahala and Millennium projects.

The financing facility may be expanded through additional bank participation up to a total of $1.7 billion, which would cover a portion of the construction of one additional project.

The proceeds of the financing will be used to reimburse certain funds that PG&E National Energy Group already has expended, as well as to finance the completion of construction of these power generation projects. The Athens project, a 1,080 megawatt gas-fired power plant in New York, and Harquahala, a 1,092 megawatt gas-fired plant in Arizona, are under construction. Millennium, a 360-megawatt gas-fired facility in Massachusetts, entered commercial operation in April.

Joint lead arrangers for this financing are Societe Generale and Salomon Smith Barney/Citibank. Additional arrangers are JP Morgan Chase, ABN-AMRO and Royal Bank of Scotland, with additional financing provided by the Export Development Corporation of Canada, Credit Lyonnais, Barclays Bank, DZ Bank and Toronto Dominion Bank.

Headquartered in Bethesda, Md., PG&E National Energy Group, a unit of PG&E Corporation (NYSE: PCG), develops, builds, owns and operates power generation and natural gas transmission facilities and provides energy trading, marketing and risk management services in North America.