(San Francisco, CA)- Pacific Gas and Electric Company announced today that it is deferring the quarterly distribution payment on its 7.90 percent Cumulative Quarterly Income Preferred Securities (QUIPS), Series A, issued by PG&E Capital I, due on April 2, 2001 for the first quarter of 2001.

QUIPS distributions can be deferred up to a period of five years under the indenture governing those securities. Investors will accumulate interest on the unpaid distributions at the rate of 7.90 percent per annum.

Future payments of preferred dividends and QUIPS distributions will be resumed when Pacific Gas and Electric Company's Board of Directors determines that the financial health of the Company will support such action.