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.
LENDERS PROVIDE LIMITED FUNDING FOR PG&E NATIONAL ENERGY
GROUP’S CONSTRUCTION PROJECTS TO PROCEED
BETHESDA, Md. – PG&E National Energy Group, Inc. today
announced that a syndicate of lenders has again agreed to provide
limited funding to the company’s subsidiary, GenHoldings
I LLC. This will allow construction to continue at power plants
in Arizona, Michigan and New York. PG&E National Energy Group
is a wholly owned subsidiary of PG&E Corporation (NYSE: PCG).
PG&E National Energy Group recently did not repay $431 million
in principal due under its corporate revolving credit facility,
triggering a cross-default under its unsecured senior notes and
various guarantees, including a guarantee to fund equity commitment
obligations under the GenHoldings credit facility.
Notwithstanding the defaults, PG&E National Energy Group continues
to negotiate with key lenders and bondholders to restructure the
company’s obligations. Today’s agreement is a transitional
step while lenders look at a more permanent resolution as part
of the global restructuring effort.
PG&E National Energy Group guarantees the obligation of its
subsidiary, GenHoldings I LLC, to make equity contributions under
GenHoldings’ credit facility to fund construction of the
Harquahala power plant in Tonopah, Ariz., the Covert plant in Covert,
Mich., and the Athens Generating plant in Athens, N.Y. This credit
facility is secured by these projects in addition to the Millennium
power plant in Charlton, Mass.
In August and September 2002, PG&E National Energy Group funded
approximately $150 million of GenHoldings’ equity commitment.
GenHoldings’ remaining equity commitment is $355 million.
In October 2002, PG&E National Energy Group notified the lenders
under the GenHoldings I LLC credit facility that it did not intend
to make further equity contributions on behalf of GenHoldings.
Later in the month, the lending syndicate agreed to fund the October
payment, allowing construction to continue.
As of Sept. 30, 2002, construction on Athens was 70 percent complete;
Covert, 61 percent complete; and Harquahala, 69 percent complete.
Headquartered in Bethesda, Md., PG&E National Energy Group
develops, builds, owns and operates electric generating and natural
gas pipeline facilities and provides energy trading, marketing
and risk-management services.
This news release discusses certain matters that may be considered “forward-looking” statements
within the meaning of Section 27A of the Securities Act of 1933,
as amended, including statements regarding the intent, belief or
current expectations of PG&E National Energy Group and its
management. Actual future results could differ materially from
those expressed or implied in any forward-looking statements. PG&E
National Energy Group describes in its filings with the U.S. Securities
and Exchange Commission some of the key factors that could cause
actual results to differ materially.