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.
AND PACIFIC GAS AND ELECTRIC COMPANY TO SUSPEND DIVIDEND PAYMENTS
(San Francisco, CA) - PG&E
Corporation announced today that it will not pay the fourth quarter
common stock dividend of 30 cents per share declared by the Board
of Directors in October and payable on January 15, 2001. Its utility
subsidiary, Pacific Gas and Electric Company, announced that it
will not declare the regular preferred stock dividend for the three
month period ending January 31, 2001, normally payable on February
15, 2001, and will not pay the $110 million dividend to the Corporation
declared in October. Future payment of dividends by both companies
will depend on the restoration of the financial health of both companies.
The utility's actions permit it to maximize its cash position as
it works to meet operations expenses and continue buying power and
natural gas for customers.
"The wholesale power crisis
has created a severe liquidity crisis for California's utility companies,"
said Robert D. Glynn, Jr., Chairman, CEO and President of PG&E Corporation.
"This challenge has forced Pacific Gas and Electric Company to evaluate
all of its options for extending its cash reserves. The utility's
decision to eliminate the dividend payments is a necessary step
and in the best interest of its ability to continue serving customers."
The Corporation and the utility plan to evaluate their ability to
pay dividends in the future on a quarter-by-quarter basis in view
of their ongoing financial health.
The Corporation has already
initiated a series of cash conservation measures, including deferring
annual merit salary increases for all Corporation and utility non-union
employees, suspending charitable contributions, and reducing other
The Corporation also announced
that it would postpone release of its financial results for the
fourth quarter of 2000 as it awaits the outcome of ongoing state
and federal efforts to resolve the crisis. The results of these
efforts could significantly affect the Corporation's results for
the quarter and for last year as a whole.
Glynn said the decision
to delay announcement of fourth quarter results would allow the
Corporation and Pacific Gas and Electric Company time to assess
progress in addressing the wholesale power crisis over the coming
weeks. Specifically, the Corporation and Pacific Gas and Electric
Company are looking to California Governor Davis and the state's
legislature to act on this issue in the weeks ahead during a special
legislative session called by the Governor. The Corporation and
Pacific Gas and Electric Company are also working at the federal
level to engage regulators and policymakers, as well as power generators
and marketers, in crafting solutions to the wholesale market problems.
We will continue our vigorous
efforts to urge state and federal leaders to act decisively to end
this crisis," said Glynn. "We are pursuing action in every available
forum, including the courts, with the goal of securing a positive
outcome for our shareholders and customers."