PRESS RELEASES 2001
FOR IMMEDIATE RELEASE
January 10, 2001
Contact: PG&E Corporation
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 AND PACIFIC GAS AND ELECTRIC COMPANY TO SUSPEND DIVIDEND PAYMENTS

(San Francisco, CA) - PG&E Corporation announced today that it will not pay the fourth quarter common stock dividend of 30 cents per share declared by the Board of Directors in October and payable on January 15, 2001. Its utility subsidiary, Pacific Gas and Electric Company, announced that it will not declare the regular preferred stock dividend for the three month period ending January 31, 2001, normally payable on February 15, 2001, and will not pay the $110 million dividend to the Corporation declared in October. Future payment of dividends by both companies will depend on the restoration of the financial health of both companies. The utility's actions permit it to maximize its cash position as it works to meet operations expenses and continue buying power and natural gas for customers.

"The wholesale power crisis has created a severe liquidity crisis for California's utility companies," said Robert D. Glynn, Jr., Chairman, CEO and President of PG&E Corporation. "This challenge has forced Pacific Gas and Electric Company to evaluate all of its options for extending its cash reserves. The utility's decision to eliminate the dividend payments is a necessary step and in the best interest of its ability to continue serving customers." The Corporation and the utility plan to evaluate their ability to pay dividends in the future on a quarter-by-quarter basis in view of their ongoing financial health.

The Corporation has already initiated a series of cash conservation measures, including deferring annual merit salary increases for all Corporation and utility non-union employees, suspending charitable contributions, and reducing other expenditures.

The Corporation also announced that it would postpone release of its financial results for the fourth quarter of 2000 as it awaits the outcome of ongoing state and federal efforts to resolve the crisis. The results of these efforts could significantly affect the Corporation's results for the quarter and for last year as a whole.

Glynn said the decision to delay announcement of fourth quarter results would allow the Corporation and Pacific Gas and Electric Company time to assess progress in addressing the wholesale power crisis over the coming weeks. Specifically, the Corporation and Pacific Gas and Electric Company are looking to California Governor Davis and the state's legislature to act on this issue in the weeks ahead during a special legislative session called by the Governor. The Corporation and Pacific Gas and Electric Company are also working at the federal level to engage regulators and policymakers, as well as power generators and marketers, in crafting solutions to the wholesale market problems.

We will continue our vigorous efforts to urge state and federal leaders to act decisively to end this crisis," said Glynn. "We are pursuing action in every available forum, including the courts, with the goal of securing a positive outcome for our shareholders and customers."


 

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