September 03, 2003
ISSUED BY:   Corporate Communications 1-800-743-6397

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.


(New York, NY) - In remarks today at the Lehman Brothers Energy/Power Conference, Robert D. Glynn, Jr., Chairman, CEO and President of PG&E Corporation (NYSE: PCG) said the company is "on a clear path to stability and increased financial performance.";

Glynn discussed the recent proposed settlement agreement to resolve Pacific Gas and Electric Company's Chapter 11 case, outlining specific elements of the proposed settlement that would strengthen the utility's financial health and help provide for a more stable regulatory environment. These elements include investment-grade credit ratings for Pacific Gas and Electric Company, a minimum authorized return on equity of 11.22 percent, and the establishment of a $2.21 billion after-tax "regulatory asset," which would be included in the utility's rate base. Glynn also cited specific steps underway at the California Public Utilities Commission to address power procurement and cost recovery issues.

Glynn said the company believes that implementing the proposed settlement agreement will deliver strong financial performance, and he restated the company's aspiration to pay dividends in the latter part of 2005.

"The proposed settlement agreement and a new plan of reorganization are proceeding on schedule through approval processes at the California Public Utilities Commission and in the bankruptcy court," said Glynn. "We believe the agreement is on track to achieve the first quarter 2004 target for the utility's exit from Chapter 11."

A webcast replay of Glynn's presentation is available on the PG&E Corporation web site,

The statements in this release and in Mr. Glynn's presentation regarding management's beliefs and expectations for increased financial performance, shareholder value and future dividends are forward-looking statements that are subject to a number of risks and uncertainties. Actual results could differ materially depending on many factors, including whether the proposed settlement agreement is approved by the CPUC, whether the proposed settlement plan is timely implemented, the outcome of various regulatory proceedings, and other factors discussed in PG&E Corporation's reports filed with the Securities and Exchange Commission.