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.
COMMENTS ON DOWNGRADE OF PG&E NATIONAL ENERGY GROUP CREDIT RATING
(San Francisco, CA) - Credit
rating agency Standard and Poor's today notified PG&E Corporation
and the PG&E National Energy Group that it has placed the PG&E NEG
on Credit Watch Negative and downgraded the unit's credit rating
from BBB to BB+. Additionally, S&P has informed PG&E Corporation
that it has made credit ratings and Credit Watch revisions to the
following PG&E NEG operating units. PG&E Energy Trading Holdings
LLC has been placed on Credit Watch Negative and its credit rating
revised from BBB+ to BB+. USGen New England, Inc. has been placed
on Credit Watch Negative and its credit rating has been revised
from BBB- to BB+. PG&E Gas Transmission, Northwest Corporation has
been placed on Credit Watch Negative and its credit rating has been
revised from A- to BBB+.
While disappointing, these
revisions to the credit ratings and credit outlook for portions
of our business are in keeping with the credit agency's larger overall
industry review, PG&E Corporation said. S&P's notice of the downgrades
stated they were being made in part as a result of adoption of recently
revised "more robust" rating methodologies that are being applied
"across the board to this sector" to evaluate credit risk. Since
January 1, 2002, S&P has revised downward the credit ratings of
78 energy holding companies and operating subsidiaries principally
reflecting current challenging market conditions in the energy sector.
PG&E Corporation said that
it will discuss further its plans to address the S&P downgrades
during the Corporation's previously scheduled second quarter earnings
call which will now take place on Thursday, August 1 at 5:30 a.m.
(PDT) 8:30 a.m. (EDT). The call was originally scheduled to take
place at 8:00 a.m. (PDT) 11:00 a.m. (EDT). The call will be available
via webcast at www.42chongdong.com.