January 19, 2001
Contact: PG&E News Department (415) 973-5930
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.

PG&E Responds To Secretary Richardson's Order For Gas Suppliers To Sell To The Utility

SAN FRANCISCO - Pacific Gas and Electric Company issued the following statement in response to President Clinton's finding of a natural gas emergency in Northern and Central California, and U.S. Department of Energy Secretary Bill Richardson's related order that requires out-of-state gas suppliers to continue selling natural gas to the utility, both of which were issued today:

"We appreciate President Clinton's and Secretary Richardson's leadership in ordering the natural gas suppliers to continue selling and delivering gas into California. The gas supply situation has brought Northern and Central California to the brink of a serious crisis at a time when the state is also experiencing power outages because of an electricity shortage. We are rapidly running out of gas stored in our underground storage facilities because of cuts in flowing supplies.

"We are concerned, however, that the extremely short duration of the federal order - which extends only through Tuesday, January 23 - means that it probably will have only limited practical effect in relieving the shortage of gas supplies. We hope that the order will be extended, at least through February, so that it can be used to get enough baseload gas lined up to meet our expected February gas demands. Without that extension, we are concerned that millions of Californians could be in jeopardy of gas shortages in early-to-mid February - a time when natural gas is desperately needed to heat homes and businesses.

"If gas service to residential and business consumers is threatened, then existing rules require Pacific Gas and Electric Company to meet their natural gas needs by reducing deliveries to other end-use customers, including gas-fired electric power plants, hospitals, and military bases. Therefore, it is crucial to note that serious gas shortages are still a possibility if the Secretary's order expires next week and is not extended.

"Because of Pacific Gas and Electric Company's financial crisis, nearly all of its natural gas suppliers have said they will not continue to sell gas to the utility without special payment arrangements, and several have already stopped deliveries. Pacific Gas and Electric Company has been unable to pay for gas in advance -- as suppliers have requested -- because California's electricity crisis has pushed the utility to the brink of financial collapse, exhausting available cash and credit. Unlike the situation on the electric side, the utility's customers pay the market price for the gas they use, so Pacific Gas and Electric Company collects sufficient gas revenues to pay the gas suppliers."