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.

PG&E CORPORATION STRIKES 810-MEGAWATT SOUTHEAST TOLLING AGREEMENT; DOUBLES REGIONAL ASSET BASE

Bethesda, Md. - PG&E Corporation's (NYSE: PCG) National Energy Group today announced an 810-megawatt long-term tolling agreement with Southaven Power, LLC, an affiliate of Cogentrix Energy, Inc. The arrangement gives PG&E National Energy Group marketing control of its third power generation asset in the Southern U.S. power market. The agreement comes on the heels of the Company's purchase last month of the 500-megawatt merchant generation Attala Energy Facility in central Mississippi. The National Energy Group also operates a total of 550 megawatts in Florida and will toll a significant portion of the capacity from the SRW Cogeneration facility in Orange County, Texas, beginning in 2001 under a long-term contract.

The terms of the tolling agreement announced today provide PG&E National Energy Group's subsidiary, PG&E Energy Trading, with rights to the total generation capacity produced at the 810-megawatt natural gas fueled, combined-cycle facility, located in Southaven, Miss., just south of the Tennessee border near Memphis.

"These 810 megawatts are in addition to our acquisition of the Attala plant last month and strengthen our position in the region's power market," said Greg Kelly, vice president of marketing and business development of the National Energy Group's Eastern Region. The 40-acre project is located adjacent to existing TVA and Entergy electric substations that will deliver the plant's electricity into the region's transmission grid.

"We believe arrangements such as this allow us to deploy our capital resources in an efficient manner by obtaining control over power generation facilities owned by third parties," stated Thomas G. Boren, president and chief executive officer of PG&E National Energy Group.

PG&E Corporation with 1999 revenues of nearly $21 billion and operations in 21 states, markets energy services and products throughout North America through its National Energy Group. The Corporation has ownership and arrangement interests in more than 30 power plants and has one of the largest energy trading and risk management programs in North America.

This news release discusses certain matters that may be considered "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the intent, belief or current expectations of PG&E Corporation ("the Company") and its management or those of the PG&E National Energy Group and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could materially affect actual results such as, but not limited to, (i) changes in government regulations and anticipated deregulation of the electric energy industry; (ii) commercial operations of new plants that may be delayed or prevented because of various development and construction risks, such as a failure to obtain financing and the necessary permits to operate or the failure of third-party contractors to perform their contractual obligations, (iii) a competitor's development of a lower-cost generating gas-fired power plant, (iv) fluctuations in natural gas and electricity prices and the ability to successfully manage such price fluctuations or (v) the risks associated with marketing and selling power from power plants in the newly competitive energy market. Prospective investors are also referred to the other risks identified from time to time in the Company's reports and registration statements filed with the Securities and Exchange Commission.