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.

PG&E RESPONDS TO STATE POWER CONTRACTS ANNOUNCEMENT

SAN FRANCISCO - Pacific Gas and Electric Company today issued the following statement, in response to the announcement by Governor Davis on the results of the State's auction for power contracts:

"We are pleased that the State government has received bids for long-term energy contracts from electricity generators. We agree that long-term contracts are an important mechanism for stabilizing energy prices and protecting consumers from market fluctuations.

"Pacific Gas and Electric Company has consistently sought permission to pursue long-term contracts but state regulation severely limits our ability to do so. As Governor Davis has recognized, utilizing long-term contracts is a critical part of an overall constructive solution to the energy crisis confronting California."