(New York, NY) – In remarks to investors at Lehman Brothers today, Robert D. Glynn, Jr., Chairman, CEO and President of PG&E Corporation (NYSE: PCG), discussed the path the company is on to increased financial performance and to resuming the roles Pacific Gas and Electric Company has historically played in advancing California’s energy infrastructure and economic development, among other contributions.

Glynn outlined details of the proposed settlement agreement reached in June between the company and the staff of the California Public Utilities Commission to resolve Pacific Gas and Electric Company’s Chapter 11 case. He said the company is pleased that the Commission will have the opportunity to vote on the proposed settlement in December. Pending the Commission’s vote and the confirmation of the associated plan of reorganization by the federal bankruptcy court expected this month, the company has targeted the end of the first quarter of 2004 for its exit from Chapter 11.

“When it comes to the state’s economy and that of the communities served, few businesses have the potential to play such a critical, positive role on the same scale that we do at Pacific Gas and Electric Company—and few have the history of doing so for many decades,” said Glynn. “When Pacific Gas and Electric is on the firm financial footing provided by the terms of the proposed settlement agreement and given a more stable regulatory environment, it will be in a position to resume full participation in investments like new utility generation that are vital to the state’s and customers’ future—investments that are out of reach of sub-investment grade companies. We think the recent good faith efforts of all the key parties show that they recognize the importance of creating the conditions where investments like these can proceed.”

Glynn cited the important benefits that would result when the proposed settlement agreement is approved and the associated plan of reorganization is implemented, including:

• Reducing rates on January 1, 2004, by approximately $670 million – almost 7 percent on average—with the potential of even further rate reductions over time.
• Allowing PG&E to have access to lower-cost capital to invest in new infrastructure to serve California.
• Enabling PG&E to resume its traditional role of securing energy supplies for its customers, including cost-effective demand-side and renewable resources.
• Providing PG&E the ability to access lower-cost capital to continue to reduce the environmental impact of its operations; promote customer energy efficiency programs; and to make more cost effective its promotion of distributed generation, and advance metering and other new technologies to benefit customers.

“These benefits are all part of PG&E’s future outlook. We’re confident that California’s consumers and policy-makers want to see these opportunities realized as much as we do, and we look forward to resuming the relationship that a great company should have with a great state,” said Glynn.

A webcast replay of Glynn’s presentation is available on the PG&E Corporation web site, www.pgecorp.com.

The statements in this release and in Mr. Glynn’s presentation regarding management’s beliefs and expectations with respect to PG&E Corporation’s and Pacific Gas and Electric Company’s future financial health are forward-looking statements that are subject to a number of risks and uncertainties. Actual results could differ materially depending on many factors, including whether the proposed settlement agreements in the utility’s Chapter 11 case and the GRC proceeding are approved by the CPUC, whether the proposed Chapter 11 settlement plan is timely implemented, whether the assumptions underlying the company’s financial projections furnished to the Securities and Exchange Commission on a Form 8-K dated October 14, 2003 are realized, the outcome of various regulatory proceedings, and other factors discussed in PG&E Corporation’s reports filed with the Securities and Exchange Commission.