September 19, 2001
Contact: Megan Frey 503-833-4603, PG&E National Energy Group
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.


State Action is a Major Milestone

HERMISTON, Ore. - The Oregon Energy Facility Siting Council has awarded a site certificate for the Umatilla Generating Project, a proposed generating plant being developed by the PG&E Corporation's (NYSE: PCG) PG&E National Energy Group (PG&E NEG). The action, taken by the Siting Council late last week, is a major milestone in the process to prepare the plant in northeastern Oregon for construction.

The proposed plant will be designed with the capacity to generate up to 598 megawatts of electricity and will be located across the street from PG&E NEG's Hermiston Generating Plant near Hermiston, Ore. The plant is expected to be in service by 2004.

"We have worked closely with the Oregon Energy Siting Council, as well as the various interested parties, throughout the state process, and the project is a better one because of these efforts," said Thomas B. King, president and chief operating officer, PG&E NEG West Region. "We will continue to work with the Siting Council and the Oregon Office of Energy in our effort to develop an energy resource that will help meet the long-term power needs of the people of Oregon and the rest of the Northwest."

The Umatilla Project will be fueled by natural gas transported by PG&E NEG's natural gas pipeline system, Gas Transmission Northwest (GTN).

The plant will be equipped with advanced-technology pollution control equipment. It will meet every federal, state and local regulation for air emissions, including Oregon's groundbreaking rules for carbon dioxide offsets.

Construction of the Umatilla Generating Plant could begin in early spring of 2002. Between 300 and 350 local construction jobs are expected to be created at the peak of construction. The project will hire 10 to 15 full-time employees when it begins operation, which will be in addition to the 27 full-time jobs at the Hermiston Generating Plant.

"We greatly appreciate the efforts of the Hermiston-area community throughout the siting of the Umatilla Generating Project and will continue working with local officials throughout the rest of this process," said Hermiston Generating Plant Manager Greg Cook. "As with all of our generating plants, we are committed to significant corporate citizenship in the communities we serve. The Umatilla Generating Project will continue that tradition."

GTN, a subsidiary of PG&E NEG, would transport the natural gas for the Umatilla Generating Project. GTN operates a dual pipeline system, which begins at the Idaho/British Columbia boarder, crosses northern Idaho, southeastern Washington and central Oregon, terminating at the Oregon/California border. The pipeline can ship approximately 2,700 million decatherms a day (Mdth/d) and interconnects with other natural gas pipelines, as well as local distribution companies serving retail customers in the Northwest. GTN is in the process of constructing an expansion to its mainline system, which will add approximately 200 Mdth/d of capacity. The company also is pursuing additional potential expansions beyond 2002.

Headquartered in Bethesda, Md., PG&E National Energy Group develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services.

This news release contains forward-looking statements regarding the plans and objectives of PG&E National Energy Group with respect to the Umatilla Generating Plant and the development of its Western generation resource portfolio, gas transmission expansion projects among other matters. These statements are subject to a number of risks and uncertainties. Actual results could differ materially from those expressed or implied in any forward-looking statements. Some of the key factors that could cause actual results to differ materially include, but are not limited to; (i) changes in government regulations, including federal and state regulation of the electric energy and natural gas industry, particularly in California where it remains uncertain what measures will be adopted by state and federal regulators to address the current California energy crisis and what the effect of such measures would be on PG&E National Energy Group's plans and operations; (ii) the extent to which current or planned development of generating facilities, pipelines, and storage facilities are completed and the pace and cost of that completion, including the extent to which commercial operations of these development projects are delayed or prevented because of various development, construction and operation risks, such as the failure to obtain financing, necessary permits or equipment, the failure of third-party contractors to perform their contractual obligations, and the failure of necessary equipment to perform as anticipated; (iii) development and operation of competing power plants, pipelines or storage facilities; (iv) fluctuations in natural gas and electricity prices and the ability to successfully manage such price fluctuations; (v) the risks associated with marketing and selling power from power plants in the newly competitive energy market; and, (vi) the other risks identified from time to time in PG&E Corporation's and PG&E National Energy Group's reports filed with the Securities and Exchange Commission