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 CORPORATION OBTAINS NEW WAIVER EXTENSION

(San Francisco, CA.)--The lenders under PG&E Corporation’s (NYSE:PCG) term loan agreement have agreed to extend through October 18, 2002, the waiver of the requirement that PG&E National Energy Group maintain an investment grade credit rating from either Standard and Poor’s or Moody’s Investors Service. The waiver was otherwise due to run through October 4, 2002. The extension includes no additional financial consideration for the lenders. The full terms and conditions of the new waiver extension are detailed in an 8-K filed with the U.S. Securities and Exchange Commission.

During the extended term of the waiver, PG&E Corporation intends to continue negotiating with its lenders for the elimination of the PG&E NEG credit rating requirement from the term loan agreement or for such other amendments as may be needed.

On August 30, 2002, the Corporation fully repaid the principal and interest on Tranche A of the term loan to General Electric Capital Corporation, totaling $606 million. The remaining Tranche B is for $420 million.