Project Commits $2 Million to Benefit Community Programs

COVERT, Mich.--Helping to meet Michigan's growing energy needs, Gov. John Engler today joined PG&E Corporation's (NYSE: PCG) PG&E National Energy Group (PG&E NEG) officials in breaking ground for the 1,170-megawatt gas-fired Covert Generating Plant. Company representatives also announced the establishment of a community foundation and committed $2 million to benefit the township's civic, charitable, educational, cultural and environmental programs.

Upon completion of construction, Covert Generating Plant, located about 48 miles west of Kalamazoo, will be a "merchant" facility, selling its output primarily in the competitive wholesale markets via the lines of Michigan Electric Transmission Company, a subsidiary of Consumers Energy. The new plant, scheduled to begin operating in the summer of 2003, is designed to produce enough electricity to power approximately 1 million homes.

"The Covert Generating Plant is an excellent example of what can be accomplished when the State and private industry work together closely to meet not only the electrical power needs of Michigan residents, but the community outreach, educational, and environmental goals of the state as well," said Gov. Engler. "This is truly a partnership that benefits Michigan at every level."

State Rep. Mary Ann Middaugh and other state, county, local and PG&E NEG officials also participated in the event.

Covert Generating Company created the Covert Township Community Foundation and presented its initial contribution of $1 million at the groundbreaking ceremony. Covert Generating committed an additional $1 million to support the foundation during the first 15 years of the plant's operation. The foundation's advisory board will consist of township, business and community leaders.

"Our involvement in the community is every bit as important to us as our involvement in providing clean, reliable, affordable power. We are pleased to make a contribution that will help anchor the Covert Community Improvement Foundation," said Chris Iribe, president and chief operating officer of PG&E NEG's East Region. "Following a strong working relationship with county, township and state officials, we're proud to be entering the Midwest's competitive power market."

Covert Generating Company, LLC, is a wholly owned, indirect subsidiary of PG&E NEG. Headquartered in Bethesda, Md., PG&E NEG develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services.