Pacific Gas and Electric Company Receives Court Approval of Second-Day Motions



SAN FRANCISCO--(BUSINESS WIRE)--April 9, 2001 via NewsEdge Corporation  -

Utility Granted Authority to Continue Efforts to Secure Natural Gas


Supplies, Use Cash Collateral for Normal Business Operations


Pacific Gas and Electric Company today received approval from the
U.S. Bankruptcy Court for the Northern District of California, of
various second-day motions.


These orders will enable Pacific Gas and Electric Company to
continue to fulfill post-petition obligations to suppliers and other
creditors without disruption, and so that all parties' interests are
considered, and treated fairly. The goal of these early proceedings is
to assure stability of the company, in accordance with bankruptcy law.


The court granted the utility the authority to continue to use its
natural gas revenues to secure future supplies, hopefully ensuring
that there will be no disruption of service for millions of natural
gas customers.


The court also authorized interim use of cash collateral in which
mortgage bondholders have a beneficial interest, and scheduled and
established deadlines relating to a final hearing on the continued use
of cash collateral.


Also today, Pacific Gas and Electric Company asked the Court to
allow at least a 60 day suspension of a requirement approved by the
CPUC on March 27, that would force PG&amp;E to restate all its regulatory
books and accounts back to Jan. 1, 1998 in order to prolong the
current electric rate freeze and make it appear that PG&amp;E has never
incurred any operating losses on its wholesale power costs since the
energy crisis began.


Under the CPUC order, PG&amp;E is required to file tariffs and reports
by Wednesday, April 11, making the accounting changes and restating
its books. PG&amp;E believes the CPUC accounting and ratemaking change is
intended to interfere with the rights of creditors and shareholders to
recover over $8.9 billion in undercollected power costs that the
company has accrued since last summer. Under federal bankruptcy law,
PG&amp;E, as a "debtor in possession," generally has an additional 60 days
to comply with various deadlines issued by other agencies, and actions
by those agencies which would interfere with creditors rights and the
value of PG&amp;E's assets cannot be implemented without approval of the
bankruptcy judge.


At the Court's request, Pacific Gas and Electric Company and the
CPUC are currently negotiating on an extension of this filing
requirement, and is hopeful that an agreed upon solution can be
reached in a timely manner.





CONTACT: Pacific Gas and Electric Company |              News Department, 
415/973-5930