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.

CHAPTER 11 UPDATE: PG&E ISSUES STATEMENT AFTER U.S. BANKRUPTCY COURT DECISION

SAN FRANCISCO - Pacific Gas and Electric Company today issued the following statement after the U.S. Bankruptcy Court allowed the California Public Utilities Commission (CPUC) to file a plan of reorganization and disclosure statement on April 15, 2002:

"The CPUC was forced to admit today that its hopes of an all cash plan would not work and that its January 2003 timeframe might not be achievable. Unless the CPUC can address these flaws effectively, its plan of reorganization would relegate PG&E to junk bond status and keep the state in the power buying business for years to come.

"The CPUC faces significant obstacles as to how to return PG&E to investment grade status, how to address the $4.5 billion in debt their term sheet comes up short, and whether or not they will need junk bonds to finance any shortfall. The CPUC will also need to resolve the serious constitutional and regulatory barriers that were raised today.

"PG&E continues to believe the structure of its plan of reorganization, which pays all creditors in full without selling assets or asking Bankruptcy Court to raise rates or the state for a bailout, is the only feasible solution to getting the company out of bankruptcy.

"PG&E looks forward to filing its amended plan of reorganization and disclosure statement on March 7 and the hearing on March 26."