National Energy & Gas Transmission

On July 8, 2003, as the next step in ongoing restructuring efforts, National Energy & Gas Transmission, Inc. (NEGT), formerly known as PG&E National Energy Group, Inc. (PG&E NEG), National Energy & Gas Transmission Energy Trading Holdings Corporation (NEGT ET), formerly known as PG&E Energy Trading Holdings Corporation (PG&E ET) and NEGT ET subsidiaries voluntarily filed petitions for protection under Chapter 11 of the federal bankruptcy code. USGen New England, Inc. (USGenNE) also filed its own petition for Chapter 11 relief. These filings in the U.S. Bankruptcy Court for the District of Maryland are in keeping with NEGT's previously announced intention to maximize cash and reduce liabilities as part of its ongoing effort to restructure debt obligations. For several months, NEGT has made steady progress toward restructuring its obligations. The company believes that this action is another step in moving forward and resolving the challenges presented by its financial situation and current market conditions. Along with its lenders, the company believes that filing Chapter 11 protection provides the best opportunity to reach a resolution that is in the interest of employees, creditors and stakeholders. Other NEGT entities - including Gas Transmission Northwest Corporation formerly PG&E Gas Transmission Northwest Corporation and NEGT's National Energy Power Company, formerly PG&E Generating, which include several independent power generation facilities across the country - have not filed for Chapter 11 protection. Operations are expected to continue as normal at these facilities and at facilities owned by USGenNE. NEGT is a subsidiary of PG&E Corporation (NYSE: PCG), which is not a party in these Chapter 11 proceedings. The filings include a plan of reorganization (POR) for NEGT that has the agreement in principle of its major creditors on many of the key terms. The company anticipates filing plans of reorganization for the NEGT ET entities and USGenNE at a later date.