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, REPAYS LOAN TO GENERAL ELECTRIC CAPITAL

(San Francisco) -- PG&E Corporation (NYSE: PCG) and lenders under the $420 million Tranche B of the Corporation’s $1.02 billion term loan agreement today reached an agreement that, among other things, extends through October 4, 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 terms and conditions of the new waiver agreement will be detailed in an 8-K which the Corporation intends to file later today with the U.S. Securities and Exchange Commission.

Also today, the Corporation fully repaid the principal and interest on Tranche A of the loan to General Electric Capital Corporation, totaling $606 million. The Corporation anticipates its cash balance at the end of the third quarter of 2002 will be approximately $200 million including certain reserves required under the terms of the loan agreement. The Corporation’s cash balance remains sufficient to fund its ongoing operations.

This press release contains forward-looking statements regarding PG&E Corporation’s projected cash balance at September 30, 2002, which statements are based on current expectations and assumptions which management believes are reasonable and on information currently available to management. These statements are necessarily subject to various risks and uncertainties and actual results could differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause actual results to differ include: increases in legal fees associated with the bankruptcy of PG&E Corporation’s subsidiary, Pacific Gas and Electric Company (Utility); increases in operating costs at PG&E Corporation; increases in interest rates; the amount of fees that may be associated with potential new financings; and increases in taxes associated with operations.