October 28, 2003
ISSUED BY:   Corporate Communications 1-800-743-6397

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.


(Orlando, Fla.) - In remarks to investors and analysts today at the Edison Electric Institute (EEI) Financial Conference, Robert D. Glynn, Jr., Chairman, CEO and President of PG&E Corporation (NYSE: PCG) said the company is “on a clear path to stability and increased financial performance.”

Glynn discussed the proposed settlement agreement to resolve Pacific Gas and Electric Company's Chapter 11 case, including elements of the proposed settlement that would strengthen the utility's financial health. These elements include investment-grade credit ratings for Pacific Gas and Electric Company, an authorized return on equity of 11.22 percent, and the establishment of a $2.21 billion after-tax ”regulatory asset,” which would be included in the utility's rate base.

“The proposed settlement agreement and a new plan of reorganization are proceeding on schedule through approval processes at the California Public Utilities Commission and in the Bankruptcy Court,” said Glynn. Earlier this month, it was announced that more than 97 percent of voting creditors voted to support the new plan of reorganization. “We believe the agreement is on track to achieve the first quarter 2004 target for the utility's exit from Chapter 11.”

Glynn also cited recent progress toward a more stable regulatory environment in California, including a proposed 2003 General Rate Case (GRC) settlement submitted last month for approval at the California Public Utilities Commission (CPUC). The proposed GRC settlement was entered into by Pacific Gas and Electric Company, the CPUC's Office of Ratepayer Advocates, The Utility Reform Network and other stakeholders. The proposed GRC settlement would provide revenues that would allow the utility the opportunity to earn its authorized return on equity, and would provide a mechanism for timely and predictable revenue adjustments in 2004, 2005 and 2006 to cover costs associated with ratebase growth and inflation.

Glynn also reaffirmed the company's previously issued earnings guidance for 2003 and 2004, and he reiterated the company's aspiration to pay dividends in the latter part of 2005.

A webcast replay of Glynn's presentation is available on the PG&E Corporation web site,

The statements in this release and in Mr. Glynn's presentation regarding management's beliefs and expectations for increased financial performance, shareholder value and future dividends are forward-looking statements that are subject to a number of risks and uncertainties. Actual results could differ materially depending on many factors, including whether the proposed settlement agreements in the utility's Chapter 11 case and the GRC proceeding are approved by the CPUC, whether the proposed Chapter 11 settlement plan is timely implemented, whether the assumptions underlying the company's financial projections furnished to the Securities and Exchange Commission on a Form 8-K dated October 14, 2003 are realized, the outcome of various regulatory proceedings, and other factors discussed in PG&E Corporation's reports filed with the Securities and Exchange Commission.