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

“Pacific Venture Capital’s mission is to generate new value forPG&E Corporation shareholders by investing in fast-growing,innovative energy and telecommunications companies, and to gaininsight into new technologies and business models to impact ourcompany and business strategy,” said PG&E Corp. Chairman RobertD. Glynn, Jr.

Bryant J. Tong will lead the new subsidiary as CEO. Tong bringsmore than 23 years of experience, including leading successfulcorporations through start-up and high-growth cycles. He willreport to Peter A. Darbee, PG&E Corp. CFO. “Bryant’s talentsand executive experience in the venture capital field, combinedwith Peter’s Wall Street experience at Goldman Sachs and SalomonBrothers, provide a wealth of financial expertise to drive PacificVenture Capital,” said Glynn.

Meanwhile, another PG&E Corp. operating division, NationalEnergy Group, moved forward last week with plans to build a 550 MWpower plant in eastern Oregon. The facility, which is projected tobegin operation in 2003, will be PG&E’s first merchant powerplant in the Pacific Northwest. It will be located next to theexisting 474 MW Hermiston Generating Plant, which is co-owned byPG&E and PacifiCorp and will be connected to PG&E’s gaspipeline system, Gas Transmission Northwest (GTN), providingincremental demand of 84,000 Dth/d on that system.

“Through our natural gas transmission system, which crossesIdaho, Washington and Oregon, and the Hermiston Generating Plant,we already have a significant presence in the region’s wholesaleenergy market. We plan to grow that presence as part of our overallstrategy to develop generation and gas transmission infrastructurein major western markets,” said Thomas B. King, COO of the NationalEnergy Group West Region.

“Development of a merchant power plant adjacent to our pipelinesystem in Oregon is an excellent example of our strategy tooptimize our strong asset position in the Pacific Northwest,” Kingsaid. “With the passage of deregulation legislation in Oregon lastyear, we believe the market there is ready for development ofcompetitive electric generation.”

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

In addition to the Umatilla project, PG&E began constructionthis summer on the 1,000 MW La Paloma Generating Plant nearBakersfield, CA. The company has another 1,500 MW under developmentin two projects located near San Diego and Phoenix for a total of3,000 MW currently under development in the West. The company alsorecently announced plans for a 212-mile natural gas pipeline fromArizona to Baja California, Mexico. The pipeline is to be built inpartnership with Sempra Energy International and Proxima Gas S.A.de C.V.

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