June 14, 2000 -- One Year Later.

News Editors

SAN FRANCISCO--(BUSINESS WIRE)--June 14, 2001

One year ago, California experienced its first rotating outage -- the precursor to a complex energy crisis that would lead to higher energy bills for consumers, the financial collapse of two utilities, a state agency's entree to the fast-paced world of power procurement and a national obsession with supply and demand.

Since the California Independent System Operator ordered rotating outages in the Bay Area on June 14, 2000, many things have changed in California. The state has experienced an additional six days of regional or statewide rotating outages (Jan. 17 and 18; March 19 and 20; May 7 and 8), with the CAISO forecasting even more for the coming months.

While no list could be comprehensive, the following are some of the actions taken by Pacific Gas and Electric Company to address the need for increasing the supply of electricity and reducing consumers' demand, as well as helping our customers prepare for outages:

      Increasing Supply

      --  Identified 28 areas in PG&E's service territory where new
        generation can be interconnected for relatively low cost.

      --  Identified nine sites on PG&E property where small generators
        -- also called peaker plants -- could be placed to help with
        anticipated shortfalls in Summer 2001.

      --  Streamlined the interconnection process and assigned more
        people to handle the increased number of generator requests
        for transmission interconnections.

      --  Provided interconnections for natural gas supply to more than
        2,000 megawatts of electric generation, and currently working
        with 10 generators to interconnect more than 1,000 megawatts
        to the electric transmission grid during Summer 2001.
        Additional generating units will be connected to the grid
        after the summer.

      --  Completed two refuelings of Diablo Canyon Power Plant -- one
        in record time -- to ensure that the 2,300 megawatts produced
        by the plant are feeding into the state transmission grid for
        consumers' use.

      --  Completed 70 critical capacity projects in order to transmit
        more electricity into the regions and communities where demand
        is highest. These projects included: installing or
        reconductoring 80 to 100 miles of transmission lines to
        increase the amount of electrons that can be moved regionally,
        and work at over 50 substations that will provide additional
        electrical capacity to new and growing communities.

      --  Purchased and installed a state-of-the-art computer tool to
        provide real-time assessment of transmission system
        conditions. This allows utility engineers to better manage the
        reliability of the transmission grid during heat spells and/or
        when critical generation or transmission is not available.

      --  Instead of retiring the two oldest units at Hunters Point
        Power Plant because of age and expense to fix, Pacific Gas and
        Electric Company is in the process of converting the
        generating units to synchronous condensers, to continue to
        support electric reliability in San Francisco without burning
        fuel or producing steam.

      Reducing Demand

      --  Launched a public awareness campaign called "The More You Know
        About Conserving Energy, the Less Energy You Need" which
        utilizes paid advertising, the Internet and news coverage to
        inform consumers about the need to conserve.

      --  Provided or committed $80 million in energy efficiency-related
        rebates, vouchers and incentives -- both for businesses and
        residential consumers.

      --  Provided or committed $40 million in payments to large
        industrial customers who agreed to shut down their businesses
        when energy supplies are scarce.

      --  Hosted and/or participated in more than 1,000 business and
        community events to promote energy efficiency and conservation
        throughout Northern and Central California.

      --  Gave away more than 2,000 compact fluorescent light bulbs
        (CFLs) to replace incandescent bulbs to help consumers reduce
        their electricity consumption. Also provided $3 rebates on
        more than 1.1 million CFLs through retail stores.

      --  Gave away 10 Energy Star washing machines in honor of Earth
        Day.

      --  Distributed more than 60 million brochures and/or fact sheets
        about ways consumers can conserve, including energy-saving
        tips and information on programs and rebates.

      --  Offered energy efficiency- and conservation-related advice to
        more than 380,000 people who called the company's Smarter
        Energy Line at 800/933-9555, as well as to the 23,000 business
        customers who called the Business Customer Center at
        800/468-4PGE.

      --  Provided information about energy efficiency and the energy
        crisis in general to the millions of visitors at www.pge.com.

      --  Worked with the mainstream and ethnic news media on thousands
        of news stories about energy efficiency and conservation.

Encourage Preparation

While Pacific Gas and Electric Company has worked closely with state officials, market participants and consumers to improve the supply-demand imbalance, the utility also has been preparing for the probability of blackouts. The following are some of the steps taken by Pacific Gas and Electric Company to help customers prepare for outages and learn how to be safe when they occur:

      --  Briefed emergency service organizations on the blackout
        process so they can take precautions in their communities to
        ensure public safety.

      --  Hosted seminars for large industrial and commercial customers
        whose equipment is especially sensitive to power outages.

      --  Educated local and state government officials so they can keep
        their constituents informed.

      --  Worked with United Way, the Red Cross and other organizations
        to reach out to nonprofits that assist customers particularly
        vulnerable during outages -- seniors, the disabled and the
        very young.

      --  Produced collateral materials in four languages on outage
        safety and conservation tips for distribution at public
        meetings, customer service centers and by service
        representatives who visit customers' homes. Items include:
        millions of brochures, fact sheets and magnets.

      --  Launched paid advertising in four languages on outage
        preparedness that builds on previous ads highlighting the need
        for conservation and how Pacific Gas and Electric Company can
        help consumers conserve.

      --  Currently producing Public Service Announcements in English
        and other languages for distribution to radio and television
        stations.

      --  Included customers' block information on the utility's website
        at www.pge.com. Pacific Gas and Electric Company will continue
        to print block numbers on customers' bills, as it has done for
        more than 20 years.

For more energy saving tips, please visit us at www.pge.com/123 or contact the Smarter Energy Line at 800/933-9555.