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PG&E Bankruptcy Exit Plan Beneficial For All Californians, Requires No Rate Increase Or Bailout And Ensures Continued Regulatory Oversight

12/07/2001

(San Francisco, CA)- Pacific Gas and Electric Company's plan for exiting bankruptcy is legal, requires no rate increase or state bailout, and ensures continued regulatory oversight. These were the key messages of a presentation delivered today to the Board of the California Chamber of Commerce by Robert D. Glynn, Jr., Chairman, CEO, and President of PG&E Corporation (NYSE:PCG).

In his remarks Glynn emphasized that Pacific Gas and Electric Company's Plan of Reorganization has achieved the necessary balance between ensuring that all valid creditor claims are paid in full and the company is returned to financial health so that it can grow the energy infrastructure in California.

"We have a remarkably simple plan," said Glynn. "It restructures our business so that we can refinance our existing assets and pay our debts. And, it requires no rate increase or state bailout."

Glynn noted that a cornerstone of the plan is continued regulatory oversight of all of Pacific Gas and Electric Company's current assets. "No where does our plan ask for the deregulation of any of our assets," said Glynn.

"The distribution of gas and electricity and the setting of retail rates will continue to be overseen by the Public Utilities Commission," he added.

Glynn also called the plan a win for employees of Pacific Gas and Electric Company because power plants and gas and electric transmission businesses created through the plan will be California companies employing essentially the same skilled teams who are currently running them safely and reliably.

The plan also provides for a long-term power supply contract of up to 12-years to Pacific Gas and Electric Company for its customers.

"In fact," Glynn told members of the California Chamber of Commerce Board, "power under this contract will be the lowest cost major part of Pacific Gas and Electric Company's power portfolio."

Glynn closed his remarks by addressing the issue of whether Pacific Gas and Electric Company's plan for exiting bankruptcy "breaks the law."

"This statement makes for a good sound bite," said Glynn, "but it has no substance. Federal law empowers the bankruptcy court to set aside state law in approving a plan of reorganization. We are asking the Court to do just that as necessary to approve our plan."

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