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PG&E Forms Venture Capital Firm, Adds Power

PG&E Forms Venture Capital Firm, Adds Power

With between $50 million and $100 million in spending money in its first year of operation, Pacific Venture Capital LLC, a company launched last week by PG&E Corp., plans to build and manage a portfolio of capital investments in growing energy and telecommunications companies.

"Pacific Venture Capital's mission is to generate new value for PG&E Corporation shareholders by investing in fast-growing, innovative energy and telecommunications companies, and to gain insight into new technologies and business models to impact our company and business strategy," said PG&E Corp. Chairman Robert D. Glynn, Jr.

Bryant J. Tong will lead the new subsidiary as CEO. Tong brings more than 23 years of experience, including leading successful corporations through start-up and high-growth cycles. He will report to Peter A. Darbee, PG&E Corp. CFO. "Bryant's talents and executive experience in the venture capital field, combined with Peter's Wall Street experience at Goldman Sachs and Salomon Brothers, provide a wealth of financial expertise to drive Pacific Venture Capital," said Glynn.

Meanwhile, another PG&E Corp. operating division, National Energy Group, moved forward last week with plans to build a 550 MW power plant in eastern Oregon. The facility, which is projected to begin operation in 2003, will be PG&E's first merchant power plant in the Pacific Northwest. It will be located next to the existing 474 MW Hermiston Generating Plant, which is co-owned by PG&E and PacifiCorp and will be connected to PG&E's gas pipeline system, Gas Transmission Northwest (GTN), providing incremental demand of 84,000 Dth/d on that system.

"Through our natural gas transmission system, which crosses Idaho, Washington and Oregon, and the Hermiston Generating Plant, we already have a significant presence in the region's wholesale energy market. We plan to grow that presence as part of our overall strategy to develop generation and gas transmission infrastructure in major western markets," said Thomas B. King, COO of the National Energy Group West Region.

"Development of a merchant power plant adjacent to our pipeline system in Oregon is an excellent example of our strategy to optimize our strong asset position in the Pacific Northwest," King said. "With the passage of deregulation legislation in Oregon last year, we believe the market there is ready for development of competitive electric generation."

PG&E National Energy Group expects to apply to the Oregon Energy Facility Siting Council this fall for a license to build the plant. The company expects to begin construction by late 2001 and have the plant ready for commercial operation in 2003.

In addition to the Umatilla project, PG&E began construction this summer on the 1,000 MW La Paloma Generating Plant near Bakersfield, CA. The company has another 1,500 MW under development in two projects located near San Diego and Phoenix for a total of 3,000 MW currently under development in the West. The company also recently announced plans for a 212-mile natural gas pipeline from Arizona to Baja California, Mexico. The pipeline is to be built in partnership with Sempra Energy International and Proxima Gas S.A. de C.V.

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