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Date: Thu, 12 Oct 2000 11:21:00 -0700 (PDT)
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DJ PG&E Says Won't Try To Escape Rate
                  Freeze For Now >PCG 

                  Copyright , 2000 Dow Jones & Company, Inc. 


                  SAN FRANCISCO (Dow Jones)--PG&E Corp. (PCG) won't try to 
lift California's
                  state-mandated rate freeze before the end of the transition 
to a deregulated market,
                  saying it wants to protect its customers from volatile 
power prices, senior company
                  officials said Wednesday. 

                       "We aren't moving at this time to end the rate freeze. 
But that view might change in
                  the future," said a senior company official, who requested 
anonymity. 

                       PG&E invited reporters to its headquarters Wednesday 
to discuss plans for repairing
                  a "not workably competitive power market" and several steps 
the utility plans to file
                  with federal regulators to do that. 

                       One proposal that is expected to be filed with the 
Federal Energy Regulatory
                  Commission is a return to cost-based rates, where the price 
for power would be
                  predetermined based on generation costs. The company wants 
to temporarily put an
                  end to market-based rates. 

                       The utility will also request that California's 
independent system operator reduce the
                  wholesale power price cap to $100 a megawatt-hour from 
$250/MWh. 

                       Company officials said those steps would allow them to 
recover billions of dollars in
                  unpaid power costs and would stabilize wholesale power 
prices and protect retail
                  customers. 

                       PG&E said generators would still be able to make a 
profit on power sold in California
                  with the reduced cap, and the company doesn't believe the 
state's power supply would
                  be in jeopardy from such an action. 

                       -By Jason Leopold, Dow Jones Newswires; 323-658-3874;
                  mailto:jason.leopold@dowjones.com