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PG&E CORPORATION COMMENTS ON DOWNGRADE OF PG&E NATIONAL ENERGY GROUP UNITS BY MOODY'S INVESTORS SERVICE

(San Francisco, CA ) - Moody's Investors Service announced today that it lowered the credit rating of several units of PG&E Corporation's subsidiary PG&E National Energy Group (PG&E NEG).

Today's action by Moody's lowered the ratings of the following wholly owned PG&E NEG units:

• PG&E Gas Transmission, Northwest Corporation to Baa3 from Baa2

• USGen New England, Inc. to Ba3 from Baa3

• Attala Generating Company, LLC to Ba3 from Baa3

Moody's left in place its current rating of B1 for PG&E NEG. The ratings agency indicated, however, that it continues to review the current credit ratings of PG&E NEG and its units for possible future downgrade.

PG&E Corporation noted that Moody's revised rating on PG&E Gas Transmission, Northwest Corporation to Baa3, still kept the unit at an investment grade credit level, although Standard & Poor's October 11, 2002 downgrade of PG&E Gas Transmission, Northwest Corporation (downgraded to BB- from BBB+) fell below investment grade.

PG&E Corporation said it is continuing to explore options for the PG&E NEG including sales of assets and businesses, debt restructuring, and reorganization of existing operations.