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PG&E NATIONAL ENERGY GROUP COMPLETES FINANCING FOR DENVER AREA POWER PROJECT

Transaction Will Help Bring Clean and Reliable Peak Power to the Mile High Region

BETHESDA, Md. - PG&E Corporation's (NYSE: PCG) PG&E National Energy Group (PG&E NEG) has completed financing for its 111-megawatt Plains End Generating project now under construction in Arvada, Colo., about 8 miles northwest of Denver.

Credit Lyonnais was the lead arranger and underwriter for the non-recourse project financing.

"We look forward to helping meet the growing energy needs of Colorado, while balancing environmental concerns," said Tom King, president and chief operating officer of PG&E NEG's West Region. "The Plains End Generating project is an excellent example of everyone working together to bring this project on-line within an aggressive time frame."

The project will use 20 natural gas-fired reciprocating engines, each rated at 5.5 megawatts, to produce electricity under a 10-year power purchase agreement with Xcel Energy. The peaking facility is designed to be started and quickly brought on-line, allowing for a swift response during increased or decreased power demand, particularly those prompted by extreme weather. The process used at Plains End requires very little water and is expected to operate more efficiently than most other competing sources, providing a good heat rate, despite the area's high altitude.

Located on 15 acres of a 55-acre site in Jefferson County's Vauxmont development, Plains End Generating will be capable of delivering enough electricity for about 111,000 homes. It is scheduled to be operational in spring 2002.

"We were pleased that PG&E National Energy Group was among the many bidders seeking to provide additional electricity to help Xcel Energy serve its customers' energy needs in Colorado," said David Eves, managing director of Energy Trading and Purchase Power, Xcel Energy. "The purchase power agreement we have with them will provide peaking power when we need it the most."

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.

This news release contains statements concerning plans for the construction and operation of the Plains End Generating plant that may be considered forward-looking statements that involve a number of risks and uncertainties. Actual future results could differ materially from those expressed or implied in any forward-looking statements. Some of the key factors that could cause actual results to differ materially include, but are not limited to; (i) changes in government regulations, including federal and state regulation of the electric energy industry; (ii) the delay, interruption or prevention of commercial operations because of various development, construction and operation risks, such as necessary permits or equipment, the failure of third-party contractors to perform their contractual obligations, the failure of equipment to perform as anticipated, or an inability to obtain equipment or labor on acceptable terms; and, (iii) the other risks identified in PG&E Corporation's and PG&E National Energy Group's reports filed with the Securities and Exchange Commission.