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.

ATTORNEY GENERAL'S SUIT AGAINST PG&E CORPORATION TRANSFERRED TO BANKRUPTCY COURT

(San Francisco, CA) - PG&E Corporation (NYSE:PCG) today filed a motion transferring the lawsuit filed against it by the California Attorney General from San Francisco Superior Court to the Northern District U.S. Bankruptcy Court. The transfer is effective immediately.

"The attorney general's complaint is without merit, and clearly appears to be part of his ongoing efforts to obstruct our utility's plans for emerging from bankruptcy," said Bruce Worthington, Senior Vice President and General Counsel for PG&E Corporation. "It makes sense for the complaint to be moved to Bankruptcy Court, which has original and exclusive jurisdiction of claims involved in the bankruptcy process and participation in that process."

The attorney general's complaint alleges that PG&E Corporation and its directors made improper use of the Bankruptcy Court by virtue of PG&E Corporation's co-sponsoring of the pending Plan of Reorganization. It also seeks restitution of assets allegedly wrongfully transferred to PG&E Corporation from Pacific Gas and Electric Company.

"While both allegations are patently absurd, both provide grounds to transfer this case to Bankruptcy Court," said Worthington.

The financial transactions cited by the attorney general have been thoroughly reviewed and audited multiple times - by the California Public Utilities Commission, and by the state Legislature - with no findings that the transactions were anything but entirely appropriate and legal.