SAN FRANCISCO - Pacific Gas and Electric Company today issued the following statement after the U.S. Bankruptcy Court denied a motion by the City and County of San Francisco and six other local governments to form an Official Committee of Government Creditors.

"As creditors, the City and County of San Francisco and other local governments have the ability to participate in the case, and many of them have already chosen to do so. We have met with and will continue to meet and confer with many of the cities, counties, and their associations to answer questions they may have about our plan of reorganization. Those questions will also be addressed through the normal confirmation process.

"Pacific Gas and Electric Company remains committed to fulfilling its obligations to local governments. The utility continues to pay its property taxes, franchise fees, and other local assessments. We look forward to continuing the historic partnership between the company and local agencies that has existed for nearly 100 years."

One of the utility's first actions in Bankruptcy Court was a request for permission to pay the pre-petition portion of property taxes owed to local governments. On May 16, 2001, the Court approved the request and the company promptly paid $41.2 million in taxes to the 49 counties in which it operates.