Company Plans to Begin Working with Customers Immediately to Define the Scope of a Pipeline Project Serving Central and Western Washington

Portland, Oregon - PG&E Corporation's (NYSE:PCG) PG&E Gas Transmission Northwest (GTN) announced Thursday that an open season which concluded last week demonstrated strong customer interest in a proposed new pipeline to serve Central and Western Washington, with prospective shippers submitting non-binding expressions of interest totaling about three times the projected pipeline capacity.

GTN closed its open season for the Washington Lateral Project Friday, June 22. In the open season, prospective shippers were invited to submit non-binding expressions of interest in a proposed pipeline project extending from GTN's mainline system in Eastern Washington to delivery points in Central and Western Washington.

"The level of customer interest we received demonstrates the increasing demand for gas in Washington State," said Peter G. Lund, vice president of the PG&E National Energy Group, which includes GTN. "We will begin immediately to work with the companies that submitted bids to design a pipeline project that could serve some of this need.

"As we continue to move forward with this project, we will work very closely with federal, state, tribal and local constituencies. The state of Washington is a leader in the development of strong pipeline safety standards, which we have supported and will continue to support."

Customers indicating interest through the open season included gas utilities serving retail customers as well as generators seeking gas transportation for proposed projects in Central and Western Washington.

Lund said GTN envisions a pipeline capable of delivering approximately 300,000 to 400,000 decatherms per day. The proposed Washington Lateral Project would begin with an interconnection to the GTN mainline system south of Spokane, Wash., and head west to the mid-Columbia area in Central Washington and then to the I-5 corridor in Western Washington.

The ultimate route for the proposed project has not been determined and exact delivery points will be determined as GTN works with prospective customers. GTN plans to start a detailed routing study later this summer and will work closely with federal, state, local and tribal authorities to define options and preferred alternatives. The GTN system is regulated by the Federal Energy Regulatory Commission and the U.S. Department of Transportation.

First operational in 1961, the GTN mainline system begins at the Idaho/British Columbia boarder, crosses Northern Idaho, Southeastern Washington and Central Oregon, terminating at the Oregon/California border. The pipeline interconnects with other natural gas pipelines, as well as local distribution companies serving retail customers in the Northwest.

The GTN system is the most direct link between the abundant gas supplies of western Canada and the growing gas markets in the Pacific Northwest and California. GTN is the largest U.S. transporter of Canadian natural gas and is 100 percent contracted, with an average contract term extending through 2013. The pipeline operated at near 100 percent of its capacity for much of 2000.

Additional information about the results of the Washington Lateral Project open season can be located on the company's pipeline operations website at www.pge-nw.com.