Lenders Provide Limited Funding For PG&E National Energy Group's Construction Projects To Proceed


BETHESDA, Md. PG&E National Energy Group, Inc. today announced that the company and a syndicate of lenders have reached agreement to provide limited funding for the company's subsidiary, GenHoldings I, LLC, allowing construction to continue at power plants in Arizona, Michigan and New York. PG&E National Energy Group is a wholly owned subsidiary of PG&E Corporation (NYSE: PCG).

The agreement, in effect until Nov. 14, 2002, is a transitional step while the lenders look at a more permanent resolution.

Earlier this month, PG&E National Energy Group disclosed in a report filed with the U.S. Securities and Exchange Commission that it notified the lenders under GenHolding's credit facility that it does not intend to make further equity contributions and is in negotiations for the lenders to fund completion of these projects.

PG&E National Energy Group guarantees the obligation of its subsidiary, GenHoldings I, LLC, to make equity contributions under GenHolding's credit facility to fund construction of the Harquahala power plant in Tonopah, Ariz., the Covert plant in Covert, Mich. and the Athens Generating plant in Athens, N.Y. This credit facility is secured by these projects in addition to the Millennium power plant in Charlton, Mass. In August and September 2002, PG&E National Energy Group funded approximately $150 million of Gen Holding's equity commitment. GenHolding's remaining equity commitment is $355 million.

Last week, a syndicate of 16 lenders extended the maturity date of a separate PG&E National Energy Group revolving credit facility from Oct. 21, 2002 to Nov. 14, 2002.

Headquartered in Bethesda, Md., PG&E National Energy Group develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services.


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