-----Original Message-----
From: 	Hetrick, Nancy  
Sent:	Thursday, September 20, 2001 4:24 PM
To:	Mara, Susan; Kingerski, Harry; Steffes, James D.
Cc:	Huddleson, Diann; Hughes, Evan
Subject:	FW: PG&E's Plan of Reorganization under the Chapter 11 bankruptcy pro	cess
Importance:	High

FYI!

Nancy A. Hetrick
Enron Corp.
Director, Government Affairs
Phone:  712-366-3399
Pager:   888-912-1426

 -----Original Message-----
From: 	"Lerma, Yolanda" <YxD1@pge.com>@ENRON [mailto:IMCEANOTES-+22Lerma+2C+20Yolanda+22+20+3CYxD1+40pge+2Ecom+3E+40ENRON@ENRON.com] 
Sent:	Thursday, September 20, 2001 5:52 PM
To:	ABAG01 (elec) - ABAG Power, 1st Jerry Lahr (E-mail); ACNNRG (elec) ACN Energy -2nd Mark Warno (E-mail); ACNNRG (gas/ elec) - ACN Energy Inc. 2nd Hans Herzog (E-mail); ACNNRG gas/ elec) - ACN Energy 1st Tony Cusati (E-mail); AESINC (elec) - AMERICAN ENERGY SAVINGS INC., 1st RUSS KOEHLER (E-mail); ARZPS1 (elec) - Arizona Public Service,1st Merilyn Ferrara (E-mail); CEE - Clean Earth Energy Inc. 2nd/SP2C Joslyn Tran (E-mail); CEE (elec) -Clean Earth Energy Inc., 1st CRAIG KONRAD (E-mail); CLNEGY (elec) - Consumer Energy Services (previously Clean Earth), 1st Desmond Cojohn (E-mail); CLNG (elec) - Go-Green (cleen'n green), 1st contact Dennis Dyc (E-mail); CSC Energy - Julie Logsdon (E-mail); CWEC01 (elec) Commonwealth Energy, 1st Rebecca Schlanert (E-mail); DES (elec) - Dynegy, 1st Tom O'Neil (E-mail); DUKSOL (elec) - DukeSolutions Inc., 1st Kathy Abernethy (E-mail); EDSRC1 (elec) - Edison Source, 1st Steve Buss (E-mail); EPMI (elec) - ENRON Energy Servcices Inc. 1a Diann Huddleson (E-mail); EPMI (elec) - ENRON Energy Services Inc. 1st contact - Nancy Hetrick (E-mail); EPMI(elec) - Debbie Weakley (E-mail); GRNMT1 (elec) - Green Mountain Energy Resources L. L. C. - 1st contact - Agnes Barard (E-mail); GRNMT1 (elec) SP2C/Dasr 2nd Heidi Silloway (E-mail); IPCMAR (elec) - Idaho Power Company 1st Gordon Pickering (E-mail); IPCMAR (elec) - Idaho Power, 2nd Tami Spangler (E-mail); LID (elec) - Laguna Irrigation District, 1st Doug/Carol Rayner (E-mail); NEWEV1- NewEnergy California 1st Add'tl Bill Chen (E-mail); NEWEV1(elec) - NewEnergy California LLC - 1st contact/outage-Martha Dobler (E-mail); NPW (elec) - New Power Company 1st Al Pollard (E-mail); NPW (elec) - The New Power Company2nd Peter Bray (E-mail); NWERG1 (elec) - New West Energy - 1st Janie Mollon (E-mail); NWERG1 (elec) New West Energy 2nd/SP2C Carolyn Johnson (E-mail); P4LESS (elec) - Power For Less - Clark Nunes (E-mail); PGEES1 (elec) - Enron Energy Marketing Corp - PGEES (elec) - 1st/Outage/EDI/DASR Di'onne Williams (E-mail); PGEESV (elec) - PG&E Energy Services Venture sLLC 1st Don Stuphin (replacesJAMES C DAVIS) (E-mail); PILOT - Pilot power Group Inc. (E-mail); POWERS (elec) - PowerSource Ltd., 1st Roman Gordon (E-mail); SEACL1 (elec) - City of Seattle City Light Dept. 1st Marilynn Semro (E-mail); SEMPRA (elec) - Sempra Energy Solutions, 1st Edwin Hornquist (E-mail); SMUDCO (elec) - Sacramento Municipal Utility District - Rhonda Hensley (E-mail); SMUDCO (elec) Sacramento Municipal Utility District, 1st Sherri Eklof (E-mail); TNDPWR (elec) - TenderLand Power, 1st Patricia Y. Lee (E-mail); UNIENM (gas/elec) - United Gas Managmeent 2nd K Hatz (E-mail); UNIENM (gas/elec) United Gas Mgmnt,1st T Lewis (E-mail); UTILIS (elec) - Utilisource Corporation,1st Tracy L Rush (E-mail); WWE (elec) - Utility. com, 1st David Bayless (E-mail); WWE (elec) cc Rob Mac Aulay (E-mail)
Cc:	Yee, Calvin M (ESP Relations); Alexander, Michael (RAS)
Subject:	PG&E's Plan of Reorganization under the Chapter 11 bankruptcy pro	cess
Importance:	High




To all Electric Energy Service Providers:

Because you provide Direct Access service to PG&E electric distribution
customers, we knew that you would be interested in today's announcement of
our Plan of Reorganization under the Chapter 11 bankruptcy process.  The
plan involves a restructuring of the Pacific Gas and Electric Company
business and a refinancing of our assets.  As noted in our press release,
the plan has the full support of the creditor's committee.

Following is the press release we issued this morning.  Further information
and a copy of the Plan of Reorganization is -- or soon will be -- available
at www.pge.com.

I am sending this message simply for your information, not because of any
expected effect on the Direct Access program. I expect that you will
continue to work with essentially the same people and work groups after the
transition as before.  Also, recognize that this is a long process, which we
hope will be complete by January 2003.

You can follow major events in our pursuit of approval and consummation of
this plan on our web site. We believe the completion of this plan will
resolve creditors' valid claims and maintain stability for our customers and
employees, as well as provide long-term benefits to the state.

 If you have questions, please do not hesitate to call Calvin Yee @
(415/973-5683) or Michael Alexander @ (415/973-2932)

----------------------------------------------------------------------------
----------------------------------------------------------------------------
-------------------------

Pacific Gas and Electric Company and PG&E Corporation File Plan of
Reorganization
Plan Pays Claims in Full, Does Not Call for Retail Rate Increases or State
Bailout
(San Francisco, CA) - PG&E Corporation (NYSE: PCG) and its utility unit
Pacific Gas and Electric Company jointly filed a Plan of Reorganization in
U.S. Bankruptcy Court today that enables Pacific Gas and Electric Company to
pay all valid creditor claims in full and emerge from Chapter 11 bankruptcy
proceedings. The official creditors' committee supports the plan.
"This plan is an achievable solution that will enable Pacific Gas and
Electric Company to move out of Chapter 11 as a financially strong business
positioned to continue safe, reliable and responsive delivery of gas and
electricity to its customers, pay all valid creditor claims in full, and do
so without asking for a rate increase or a state bailout," said Robert D.
Glynn, Jr., Chairman of Pacific Gas and Electric Company and Chairman, CEO
and President of PG&E Corporation. "And, the plan will enable us to provide
long-term growth prospects to shareholders."
The plan reorganizes Pacific Gas and Electric Company and PG&E Corporation
into two separate, stand-alone companies no longer affiliated with one
another. The reorganized Pacific Gas and Electric Company will continue to
own and operate the existing retail electric and natural gas distribution
system. The electric generation, electric transmission, and natural gas
transmission operations currently under Pacific Gas and Electric Company
will be part of PG&E Corporation. The common shares of the reorganized
Pacific Gas and Electric will be distributed to PG&E Corporation
shareholders.
The electric generation, electric transmission and gas transmission
operations, when reorganized as new businesses under PG&E Corporation, will
have the ability to issue debt that will be combined with new financing at
Pacific Gas and Electric and used to help pay creditors' claims. The plan
also restructures certain existing debt and uses $3.3 billion in cash on
hand to satisfy creditor claims.
Under the plan, all valid creditor claims will be paid in full, using a
combination of cash and long-term notes. In total, the plan will provide
creditors with about $9.1 billion in cash and $4.1 billion in notes. The
vast majority of creditors-those with allowed claims of $100,000 or
less-will receive cash payments for the full amount of their allowed claims
on the effective date of the plan. Most secured creditors will also receive
100 percent of their allowed claims in cash. Finally, unsecured creditors
with allowed claims in excess of the $100,000 threshold will be paid 60
percent in cash and 40 percent in notes.
Following the restructuring, Pacific Gas and Electric Company and PG&E
Corporation will be organized as follows:
*	Pacific Gas and Electric Company will be a separate California
corporation focused on providing electric and natural gas distribution
service to its customers in Northern and Central California. It will hold 70
percent of the current utility assets (in terms of book value) and will
employ 16,000 people. Pacific Gas and Electric Company will continue to
provide the full range of utility services to one out of every 20 Americans.

*	PG&E Corporation, in addition to its existing National Energy Group
business, will have three new businesses that will own and operate the
electric generation, electric transmission and gas transmission operations
formerly under Pacific Gas and Electric Company.
The new electric generation business will be a California company
established to own and operate the hydroelectric and nuclear generation
assets and associated lands, and to assume the power contracts with
irrigation districts, now held by the utility. In total, the unit will have
approximately 7,100 megawatts of generation. The facilities will be operated
in accordance with all current FERC and Nuclear Regulatory Commission
licenses, and in keeping with sound environmental stewardship policies. The
generating business will sell its power back to the reorganized Pacific Gas
and Electric Company under a 12-year contract at a stable, market-based
rate.
The new electric transmission business will be a California company
established to own and operate the transmission system currently operated by
the utility. The system comprises 18,500 circuit miles of electric
transmission lines and cables.
The new gas transmission business will be a California company established
to own and operate the natural gas transmission assets currently operated by
the utility, including 6,300 miles of transmission pipelines and three gas
storage facilities.
Following the reorganization, the California Public Utilities Commission
will continue to regulate the reorganized Pacific Gas and Electric Company,
including retail electric and natural gas rates. The Federal Energy
Regulatory Commission (FERC) will continue to have jurisdiction over the
licenses for the hydroelectric assets, and the rates, terms and conditions
of service provided by the electric transmission business. FERC will also
assume jurisdiction over rates for the power generated by the Diablo Canyon
Nuclear Power Plant, and over the rates, terms and conditions of service for
the gas transmission system, which will become an interstate pipeline.
Glynn said, "This plan, without raising retail rates, provides a safe,
reliable and long-term electric supply to California customers. It enables
our company to maintain a qualified workforce. And it enables us to keep our
generating assets intact and integrated, rather than selling them piecemeal
to pay creditors."
The company expects that roles and responsibilities for the vast majority of
its workforce will be unaffected by the plan. The reorganized Pacific Gas
and Electric Company and the newly established entities will employ
essentially the same people who operate the various assets under the current
organization.
"We envision essentially the same experienced, dedicated team continuing to
do their jobs with a comparable level of pay and benefits programs," said
Glynn. "We believe these businesses should be operated and maintained by the
people who know how to run them best."
In addition to resolving creditors' claims and maintaining stability for
customers and employees, the plan also provides long-term benefits to the
state. It provides the state with a path to exit the business of buying
power for customers, by identifying conditions under which Pacific Gas and
Electric Company would be financially able to re-assume the procurement
responsibility that is currently being fulfilled by the state Department of
Water Resources.
The Chapter 11 process requires that the plan of reorganization ultimately
be confirmed by the Bankruptcy Court before it can be implemented.
Paul Aronzon, legal counsel for the Official Committee of Unsecured
Creditors, said "This plan provides a comprehensive and responsible
framework to resolve creditors' claims and restore PG&E's creditworthiness.
It has our full support, and we look forward to an expeditious resolution of
the Chapter 11 process."
"With this plan filed," said Glynn, "we are now focused on bringing the
Chapter 11 process to completion, reaffirming the financial health and
creditworthiness of our operations through this reorganization, restoring
customers' confidence, and rebuilding value for our shareholders."
--PG&E News


Calvin Yee
Sr. Account Manager, Beale, MC B19C
San Francisco, CA 94105
phone: 415-973-5683; fax: 415-973-8494