FOR IMMEDIATE RELEASE
                  October 18, 2002
                  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.


                  (San Francisco, CA ) - PG&E Corporation (NYSE: PCG) has secured an additional $300 million in a new term loan agreement that amends and restates the company's existing loan agreement and increases the total loan from $420 million to $720 million. In addition, the Corporation and its lenders reached an agreement that removes the prior investment grade ratings requirements related to the PG&E National Energy Group and other potential events of default related to PG&E National Energy Group. Lenders had previously waived the credit rating requirements through October 18, 2002, after PG&E National Energy Group lost its investment grade credit rating in August.

                  The new loan agreement is expected to provide the Corporation with ample liquidity resources to fund its operations through at least 2006, when the loan matures. The additional $300 million replaces a portion of the $600 million loan the Corporation repaid to General Electric Capital on August 30, 2002.

                  As with the new loan agreement, the Corporation also amended the terms of $280 million of 7.5% Convertible Subordinated Notes issued in June 2002 to remove potential events of default associated with PG&E National Energy Group. The amended terms also increase the interest rate from 7.5% to 9.5%, and extend the maturity of the notes from 2007 to 2010.

                  The full terms and conditions of the new loan agreement and the amended terms for the notes will be detailed in an 8-K filing with the U.S. Securities and Exchange Commission.


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