EDITORS: Please do not use "Pacific Gas and Electric" or "PG&E" when referring to PG&E Corporation or its National Energy Group. The PG&E National Energy Group is not the same company as Pacific Gas and Electric Company, the utility, and is not regulated by the California Public Utilities Commission. Customers of Pacific Gas and Electric Company do not have to buy products or services from the National Energy Group in order to continue to receive quality regulated services from Pacific Gas and Electric Company.

CHAPTER 11 UPDATE: BANKRUPTCY COURT ALLOWS PG&E TO PAY $333 MILLION MORTGAGE BOND MATURITY

SAN FRANCISCO - Pacific Gas and Electric Company has received approval from the U.S. Bankruptcy Court to pay $333 million of 7-7/8 percent Series 92A First and Refunding Mortgage Bonds maturing March 1, 2002.

Bondholders who hold the bonds in a brokerage account will have principal and interest paid to their account. Certificate holders will need to deliver their certificates to the trustee, The Bank of New York, to receive payment for the principal. Interest checks to certificate holders will be mailed separately.

The $333 million mortgage bond series was recently included by the California Public Utilities Commission in the debt it proposed to reinstate as part of its term sheet. However, as PG&E noted in its response to the CPUC term sheet, this debt cannot be reinstated because the debt matures on March 1, 2002, long before the proposed effective date of the CPUC's term sheet.

With this Court approval, PG&E will pay the bondholders from its current available cash.