<SUBMISSION>
<ACCESSION-NUMBER>0001004980-02-000070
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>2
<PERIOD>20020823
<ITEMS>5
<ITEMS>7
<FILING-DATE>20020826
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>PG&E CORP
<CIK>0001004980
<ASSIGNED-SIC>4931
<IRS-NUMBER>943234914
<STATE-OF-INCORPORATION>CA
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>001-12609
<FILM-NUMBER>02747520
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>ONE MARKET SPEAR TOWER
<STREET2>SUITE 2400
<CITY>SAN FRANCISCO
<STATE>CA
<ZIP>94105
<PHONE>4152677000
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>ONE MARKET SPEAR TOWER
<STREET2>SUITE 2400
<CITY>SAN FRANCISCO
<STATE>CA
<ZIP>94105
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>PG&E PARENT CO INC
<DATE-CHANGED>19951214
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>final823b.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<html>
<head>
<title>SECURITIES AND EXCHANGE COMMISSION</title>
</head>
<body>
<div>
<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p align="center"><font size="3" face="Times New Roman">SECURITIES
AND EXCHANGE COMMISSION</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p align="center"><font size="3" face="Times New Roman">Washington,
D.C.&nbsp; 20549</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p align="center"><font size="3" face="Times New Roman">FORM
8&#8209;K</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p align="center"><font size="3" face="Times New Roman">CURRENT
REPORT</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><font size="3" face="Times New Roman">PURSUANT TO
SECTION 13 OR 15(d) OF THE</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><font size="3" face="Times New Roman">SECURITIES
EXCHANGE ACT OF 1934</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p align="center"><font size="3" face="Times New Roman">Date of
Report: August 23, 2002</font></p>
</td>
</tr>
</table>

<p align="center"><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td colspan="4" valign="top"></td>
</tr>

<tr>
<td colspan="4" valign="top"></td>
</tr>

<tr>
<td valign="top">
<p align="center"><font size="3" face="Times New Roman"><br />
 Commission<br />
 File<br />
 Number</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face="Times New Roman">Exact Name
of<br />
 Registrant<br />
 as specified in<br />
 its charter</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face="Times New Roman"><br />
 State or other<br />
 Jurisdiction of<br />
 Incorporation</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face="Times New Roman"><br />
 IRS Employer<br />
 &nbsp; Identification<br />
 Number</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">_____________</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">_____________</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">_____________</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">_____________</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">1-12609</font></p>

<p align="center"><font size="3" face=
"Times New Roman">1-2348</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face="Times New Roman">PG&amp;E
Corporation</font></p>

<p align="center"><font size="3" face="Times New Roman">Pacific Gas
and<br />
 Electric Company</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">California</font></p>

<p align="center"><font size="3" face=
"Times New Roman">California</font></p>
</td>
<td valign="top">
<p align="center"><font size="3" face=
"Times New Roman">94-3234914</font></p>

<p align="center"><font size="3" face=
"Times New Roman">94-0742640</font></p>

<p align="center"><font size="3" face="Times New Roman"><br />
 </font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td colspan="2" valign="top">
<p align="center"><font size="3" face="Times New Roman">Pacific Gas
and Electric Company<br />
 77 Beale Street, P. O. Box 770000<br />
 San Francisco, California&nbsp;&nbsp;94177</font></p>
</td>
<td colspan="2" valign="top">
<p align="center"><font size="3" face="Times New Roman">PG&amp;E
Corporation<br />
 One Market, Spear Tower, Suite 2400<br />
 San Francisco, California&nbsp;&nbsp;94105</font></p>
</td>
</tr>

<tr>
<td colspan="4" valign="top"></td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><font size="3" face="Times New Roman">(Address of
principal executive offices) (Zip Code)</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><font size="3" face="Times New Roman"><br />
 </font></p>
</td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td colspan="2" valign="top">
<p align="center"><font size="3" face="Times New Roman">Pacific Gas
and Electric Company<br />
 (415) 973-7000</font></p>
</td>
<td colspan="2" valign="top">
<p align="center"><font size="3" face="Times New Roman">PG&amp;E
Corporation<br />
 (415) 267-7000</font></p>
</td>
</tr>

<tr>
<td colspan="4" valign="top"></td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><font size="3" face=
"Times New Roman">(Registrant's telephone number, including area
code)</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>
</table>

<p align="center"><font size="3" face="Times New Roman"><br />
</font></p>

<font size="3" face="Times New Roman"><br clear="all" />
</font>

<p><br />
<a name="_DV_M1"></a><a name="_DV_M2"></a><a name="_DV_M3"></a><a
name="_DV_M4"></a><a name="_DV_M5"></a><a name="_DV_M6"></a><a
name="_DV_M7"></a><a name="_DV_M8"></a><a name="_DV_M9"></a><a
name="_DV_M10"></a><a name="_DV_M11"></a><a name="_DV_M12"></a><a
name="_DV_M13"></a><a name="_DV_M14"></a><a name="_DV_M15"></a><a
name="_DV_M16"></a><a name="_DV_M17"></a><a name="_DV_M18"></a><a
name="_DV_M19"></a><a name="_DV_M20"></a><a name="_DV_M21"></a><a
name="_DV_M22"></a><a name="_DV_M23"></a><font size="3" face=
"Times New Roman">Item 5. Other Events</font></p>

<p><font size="3" face="Times New Roman"></font></p>

<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The sections of this current report on Form 8-K discussing PG&amp;E
National Energy Group, Inc. (PG&amp;E NEG) include forward-looking
statements, including projections, that are necessarily subject to
various risks and uncertainties.&nbsp; These statements are based
on current expectations and assumptions which management believes
are reasonable and on information currently available to
management.&nbsp; Actual results could differ materially from those
contemplated by the forward-looking statements.&nbsp; These
statements should be read in conjunction with the forward-looking
statement factors set forth in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations &ndash;
Liquidity and Financial Resources" in PG&amp;E Corporation's most
recent Quarterly Report on Form 10-Q/A for the quarter ended June
30, 2002 (Form 10-Q/A).</font></p>

<p><font size="3" face="Times New Roman"></font></p>

<h5><font size="3" face=
"Times New Roman">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PG&amp;E Corporation Credit Agreement Waiver Revision</font></h5>

<h5><font size="3" face="Times New Roman"></font></h5>

<p><font size="3" face="Times New Roman">General Electric Capital
Corporation and certain other lenders (collectively, the GE
Lenders) under PG&amp;E Corporation's $1.02 billion Amended and
Restated Credit Agreement dated as of June 25, 2002 (Credit
Agreement) have waived, until August 30, 2002, the requirement that
PG&amp;E Corporation's subsidiary, PG&amp;E NEG, continue to
maintain investment grade ratings with either Standard &amp; Poor's
(S&amp;P) or Moody's Investor Services, Inc. (Moody's).&nbsp; This
waiver, which had previously been extended until October 21,
2002&nbsp; was revised in light of amendments made on August 22,
2002 to PG&amp;E NEG's $1.25 billion credit agreement dated August
22, 2001 (PG&amp;E NEG Credit Agreement), which resulted in early
termination of the prior waiver and which are described more fully
below.&nbsp; The current waiver is subject to earlier termination
if, among other events, PG&amp;E NEG fails to maintain certain
levels of credit availability under the PG&amp;E NEG Credit
Agreement.&nbsp;</font></p>

<p><font size="3" face="Times New Roman"></font></p>

<h5><font size="3" face="Times New Roman">The current waiver
agreement has been amended to require that, during the term of the
waiver agreement, at least $267 million remain available to
PG&amp;E NEG under the Tranche A facility (reduced from $400
million) and that at least $431 million remain available to
PG&amp;E NEG under the Tranche B facility.&nbsp; As previously
disclosed, in addition to requiring the maintenance of certain
levels of availability under the PG&amp;E NEG Credit Agreement, the
GE Lenders may also terminate the waiver if (1) the holders of
indebtedness of PG&amp;E NEG under the PG&amp;E NEG Credit
Agreement become entitled to accelerate the repayment of such
indebtedness before its stated maturity date, or (2) PG&amp;E
Corporation fails to perform any term or covenant of the waiver
agreement.&nbsp; In addition, as provided in the prior waiver,
during the term of the waiver PG&amp;E Corporation may not make any
investment, capital expenditure, or other payment to any of its
subsidiaries, in an amount that in the aggregate exceeds $15
million, except as may be required under applicable law or by
conditions established by the California Public Utilities
Commission (CPUC) in decisions approving the formation of PG&amp;E
Corporation to hold the stock of Pacific Gas and Electric Company
(Utility).&nbsp; A copy of the revised waiver agreement is filed as
Exhibit 99.1 hereto.</font></h5>

<h5><font size="3" face="Times New Roman"></font></h5>

<p><font size="3" face="Times New Roman">During the term of the
waiver, PG&amp;E Corporation has agreed not to allow PG&amp;E NEG
to sell any of its material assets, except for certain sales in the
ordinary course of business, or to incur additional debt, except
for (i) draws under PG&amp;E NEG's current credit facilities, (ii)
hedging and guarantees of hedging in the ordinary course of
business, and (iii) other indebtedness incurred in the ordinary
course of business up to an aggregate amount of $75 million,
without obtaining prior consent from the GE Lenders.&nbsp; The
terms of the revised waiver agreement further require PG&amp;E
Corporation to maintain an amount of cash held in two interest
reserve accounts under the Credit Agreement equal to 15 percent of
the now outstanding principal amount of the $1.02 billion in term
loans.&nbsp; Specifically, $153 million will be maintained in the
two interest accounts, which represents an increase from the
previous waiver's requirement that two years' worth of interest, or
approximately $117 million, be maintained in the interest reserve
accounts.&nbsp;</font></p>

<p><font size="3" face="Times New Roman"></font></p>

<p><font size="3" face="Times New Roman">As previously disclosed,
subject to their respective rights as set forth in the
Intercreditor and Subordination Agreement, dated as of June 25,
2002, by and between the GE Lenders and certain other parties
thereto, the GE Lenders would, upon expiration of the waiver, have
the right to declare all amounts outstanding under the Credit
Agreement to be immediately due and payable.&nbsp; The failure of
PG&amp;E Corporation to repay this accelerated indebtedness would
entitle the GE Lenders, subject to the Intercreditor Agreement, to
exercise certain remedies, including their rights as secured
parties with respect to their collateral, i.e., the pledged
interests of PG&amp;E Corporation in PG&amp;E National Energy
Group, LLC (NEG, LLC), NEG LLC's pledged interests in PG&amp;E NEG,
and a pledged interest in an interest reserve account, which will
increase from approximately $117 million to $153 million as a
result of the current waiver agreement.&nbsp;</font></p>

<h5><font size="3" face="Times New Roman"></font></h5>

<h5><font size="3" face="Times New Roman">As previously disclosed,
with respect to the $280 million aggregate principal amount of 7.5%
Convertible Subordinated Notes issued by PG&amp;E Corporation
pursuant to an Indenture dated as of June 25, 2002 by and between
PG&amp;E Corporation and U.S. Bank, N.A., as trustee (Notes), if
the obligations under the Credit Agreement were accelerated and
PG&amp;E Corporation failed to pay such accelerated obligations as
described above and such failure continues for 30 days after
receipt of written notice from the trustee or holders of at least
25 percent of the aggregate principal amount of outstanding Notes,
the Notes would also be in default.&nbsp; Thereupon, and subject to
the subordination provisions of the Indenture, the trustee or the
Note holders would have the right to accelerate the Notes.&nbsp; A
similar cross-default situation could develop if creditors of
PG&amp;E Corporation's significant subsidiaries, including PG&amp;E
NEG, accelerated $150 million or more in aggregate principal amount
of indebtedness.&nbsp;</font></h5>

<p><font size="3" face="Times New Roman"></font></p>

<h5><font size="3" face="Times New Roman">During the term of the
current waiver by the GE Lenders, PG&amp;E Corporation intends to
negotiate with the GE Lenders for a further extension of the waiver
and for the elimination of the credit rating maintenance covenant
from the Credit Agreement or for such other amendments as may be
needed to avoid a default of these obligations; however, PG&amp;E
Corporation cannot predict whether, or to what extent, it would be
successful in such efforts.&nbsp; Current PG&amp;E Corporation cash
balances are insufficient to repay the full amount of its
outstanding debt.&nbsp;</font></h5>

<p><font size="3" face="Times New Roman"></font></p>

<h5><font size="3" face=
"Times New Roman">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Extension of PG&amp;E National Energy Group Credit Facility
Expiration Date</font></h5>

<p><font size="3" face="Times New Roman"></font></p>

<p><font size="3" face="Times New Roman">As previously disclosed,
the PG&amp;E NEG Credit Agreement currently consists of a Tranche A
facility which expires on August 22, 2003 and a Tranche B facility
which was due to expire on August 22, 2002.&nbsp; On August 22,
2002, PG&amp;E NEG and the lenders under the PG&amp;E NEG Credit
Agreement entered into an amendment to the PG&amp;E NEG Credit
Agreement that extended the expiration and renewal date of the
Tranche B facility to October 21, 2002, and reduced the commitments
under the Tranche B facility to $500 million from $750
million.&nbsp; In addition, over the extension term, the amendment
(i) reduced the amount available to borrow under the Tranche B
facility to $431 million (the amount outstanding under the Tranche
B facility as of August 22, 2002) from $750 million and (ii)
reduced the amount available to borrow under the Tranche A facility
to $279 million (the amount outstanding under the Tranche A
facility as of August 22, 2002) from $500 million.&nbsp; Draws
above these amounts are available with 100 percent lender
approval.&nbsp; PG&amp;E NEG believes that these restrictions will
not prevent it from meeting its liquidity commitments during the
extension period.</font></p>

<p><font size="3" face="Times New Roman"></font></p>

<h5><font size="3" face=
"Times New Roman">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PG&amp;E NEG&nbsp; Projected Cash Management--Potential Sources and
Uses of Cash Table</font></h5>

<p><font size="3" face="Times New Roman">As previously disclosed,
PG&amp;E Corporation's Form 10-Q/A included a table which provided
an estimate of PG&amp;E NEG's potential sources and uses of cash
for the next 12 months based upon assumptions regarding exposure
and negotiations with and payments to counterparties, and calls on
PG&amp;E NEG's liquidity.&nbsp; (See section entitled "Management's
Discussion and Analysis of Financial Condition and Results of
Operations &ndash; Liquidity and Financial Resources" in PG&amp;E
Corporation's Form 10-Q/A.)&nbsp; As a result of the changes to the
PG&amp;E NEG Credit Agreement described above and PG&amp;E NEG's
ongoing review of its potential sources and uses of cash, PG&amp;E
NEG has revised certain of its projections.&nbsp; Although the
potential sources and uses of cash in this table represented an
estimate for an entire year, PG&amp;E NEG expects to undertake a
significant debt restructuring effort over the next 60 days.&nbsp;
Since PG&amp;E Corporation and PG&amp;E NEG are unable to predict
the outcome of such debt restructuring efforts, the table set forth
below covers only the period from August 21, 2002 through October
31, 2002. These projections are calculated as if the 364-day
Tranche B revolving credit facility does not expire prior to
October 31, 2002, and do not include any changes resulting from the
implementation of any debt restructuring, or other sales or
reorganization of existing operations.</font></p>

<p><font size="3" face="Times New Roman">These projections
represent sources and uses of cash at various PG&amp;E NEG and
subsidiary entities.&nbsp; While these entities are subject to
certain restrictions with respect to distributions of cash, in the
aggregate the sources described are expected to be available for
the expected uses in compliance with these restrictions.</font></p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td colspan="2" valign="top">
<p align="center"><b><font size="3" face="Times New Roman">PG&amp;E
National Energy Group</font></b></p>
</td>
</tr>

<tr>
<td colspan="2" valign="top">
<p align="center"><b><font size="3" face=
"Times New Roman">Projected Cash Management &mdash; Potential
Sources and Uses of Cash</font></b></p>
</td>
</tr>

<tr>
<td colspan="2" valign="top">
<p align="center"><b><u><font size="3" face=
"Times New Roman">August 21, 2002 through October 31,
2002</font></u></b></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p align="right"><font size="3" face="Times New Roman">($
millions)</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><u><font size="3" face="Times New Roman">Sources of
Cash</font></u></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Unrestricted cash on hand
at PG&amp;E NEG and various subsidiaries at August 20,
2002</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face="Times New Roman"></font></p>

<p align="right"><font size="3" face=
"Times New Roman">557</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Estimated distributions
and dividends from PG&amp;E NEG subsidiaries through October 31,
2002</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face="Times New Roman"></font></p>

<p align="right"><font size="3" face=
"Times New Roman">117</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Available capacity under
$500 million two-year revolver expiring August 23, 2003
(1)&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">-&nbsp;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Available capacity under
$500 million 364-day revolver expiring October 21, 2002
(2)</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">-&nbsp;</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Available capacity under
USGen New England $100 million credit facility</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">13</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Available capacity under
PG&amp;E Gas Transmission, Northwest Corporation (PG&amp;E GTN)
$125 million facility</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face="Times New Roman"></font></p>

<p align="right"><font size="3" face=
"Times New Roman">125</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Available capacity under
other credit facilities with $120 million capacity</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">12</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Total Potential Sources of
Cash</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">824</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Total Potential Sources of
Cash excluding PG&amp;E GTN (3)</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">699</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p><u><font size="3" face="Times New Roman">Uses of
Cash</font></u></p>
</td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Operating and debt service
costs</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">49</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Capital requirements for
current construction program</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">272</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Scheduled principal
payment under equipment revolver</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">16</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Collateral requirements to
cover current exposure in trading and asset businesses
(4)</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face="Times New Roman"></font></p>

<p align="right"><font size="3" face=
"Times New Roman">203</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Equity funding requirement
on La Paloma project due to ratings downgrades</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">23</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Total Potential
Uses</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">563</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Net Liquidity
Position</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">262</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Net Liquidity Position
excluding PG&amp;E GTN (3)</font></p>
</td>
<td valign="top">
<p align="right"><font size="3" face=
"Times New Roman">137</font></p>
</td>
</tr>
</table>

<p><font size="1" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">(1)</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">The two-year revolver
facility is currently limited to a total outstanding amount of
$278.7 million unless additional letters of credit are approved by
100 percent of the lenders.</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">(2)</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">The 364-day revolver
facility was extended for 60 days on August&nbsp;22, 2002.&nbsp;
The amount currently outstanding under this facility is $431
million. No additional draws are permitted without 100 percent
lender approval.</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">(3)</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">PG&amp;E GTN debt capacity
is separately identified because recent Federal Energy Regulatory
Commission (FERC) proposed rule changes and certain ring-fencing
restrictions may limit availability to affiliates.</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">(4)</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">Covers pipeline transport,
gas storage, and power pool collateral requirements and exposure
for all trading agreements having financial covenants for below
investment grade entities, net of collateral provided from July 31,
2002 through August 20, 2002 ($196 million). This estimate will
change with changes in the prices of the underlying
commodities.</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman">From July 31, 2002 through
August 20, 2002, PG&amp;E NEG posted collateral in the form of cash
or letters of credit totaling approximately $196 million to cover
exposure under guarantees which were triggered as a result of the
ratings actions taken by S&amp;P and Moody's on July 31, 2002 and
August 5, 2002, respectively.&nbsp; This amount has reduced the
potential use of cash for collateral requirements from the amount
previously disclosed of $399 million.&nbsp; As identified above,
PG&amp;E NEG estimates its remaining exposure to be approximately
$203 million.</font></p>

<p><font size="3" face="Times New Roman">The actual calls on
PG&amp;E NEG's liquidity will depend largely upon counterparties'
reactions to the ratings downgrades, the continued performance of
PG&amp;E NEG companies under the underlying agreements and the
counterparties' other commercial considerations.&nbsp; In the past,
PG&amp;E NEG has been able to negotiate acceptable arrangements and
reduce its overall exposure to counterparties when PG&amp;E NEG or
its counterparties have faced similar situations. However, PG&amp;E
NEG cannot quantify with any certainty the actual future calls on
its liquidity and there can be no assurance that PG&amp;E NEG could
negotiate acceptable arrangements in the current
circumstances.</font></p>

<p><font size="3" face="Times New Roman">On August 8, 2002,
PG&amp;E NEG replaced the ratings triggers contained in $545
million of guarantees for the performance of the contractors
building the Harquahala and Covert power projects with financial
covenants that are consistent with those contained in PG&amp;E
NEG's revolving credit and other loan facilities. These covenants
include requirements to exceed a specified cash flow to fixed
charges ratio and a specified net worth as well as to maintain less
than a specified total debt to total capitalization ratio and are
set forth in PG&amp;E NEG's revolving credit agreement filed as
Exhibit&nbsp;10.21 to PG&amp;E NEG's 2001 Annual Report on
Form&nbsp;10-K.&nbsp; PG&amp;E NEG is currently in compliance with
these covenants.</font></p>

<p><font size="3" face="Times New Roman">By letter dated August 7,
2002, Liberty Electric Power, LLC (Liberty) provided notice to
PG&amp;E Energy Trading - Power, L.P. (PGET) that the downgrade of
PG&amp;E NEG constituted a material adverse change under the
tolling agreement between PGET and Liberty and that PGET was
required to post replacement security or an event of default under
the tolling agreement would arise within 10 business days.&nbsp;
PGET has not posted replacement security.&nbsp; This notice by
Liberty is not expected to impact other agreements of PG&amp;E
NEG.&nbsp; PGET had previously provided guarantees from PG&amp;E
NEG and PG&amp;E GTN each in the amount of $150 million. Under the
terms of the tolling agreement, Liberty may issue a termination
notice and immediately cease performance and/or withhold any
payments.&nbsp; If the agreement is terminated, Liberty must in
good faith calculate the gains, losses, and costs resulting from
the termination and must provide this determination to PGET.&nbsp;
If PGET disputes the determination, it may submit the matter to
arbitration.&nbsp; PGET has submitted to Liberty a proposal to
replace the guarantees' ratings triggers with a covenant package
similar to that implemented for PG&amp;E NEG's debt
facilities.&nbsp; To date, Liberty has neither accepted the
proposal nor sent a notice of termination.&nbsp;</font></p>

<p><font size="3" face="Times New Roman">PG&amp;E NEG is continuing
to explore options to raise equity, lower debt, and reduce ongoing
guarantee and working capital requirements.&nbsp; These options
include, but are not limited to, sales of assets and businesses,
debt restructuring, and reorganization of existing
operations.&nbsp; The implementation of most of these options would
be subject to obtaining necessary lender approvals and would
require compliance with PG&amp;E NEG's other agreements and
applicable laws and regulations.</font></p>

<p><font size="3" face="Times New Roman"></font></p>

<h5><font size="3" face=
"Times New Roman">D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pacific Gas and Electric Company Bankruptcy</font></h5>

<p><font size="3" face="Times New Roman">On August 22, 2002, the
California Public Utilities Commission (CPUC) announced that it has
entered into an agreement with the Official Committee of Unsecured
Creditors (OCC) regarding modifications to its current plan of
reorganization for Pacific Gas and Electric Company
(Utility).&nbsp; Under the terms of the agreement, the CPUC and the
OCC will seek permission from the U.S. Bankruptcy Court for the
Northern District of California (Bankruptcy Court) to amend the
CPUC&rsquo;s plan of reorganization and to reopen the creditor
voting period, which ended on August 12, 2002.&nbsp; The agreement
also states that the OCC will become a co-proponent of the
CPUC&rsquo;s amended plan and will recommend that creditors vote in
favor of the CPUC&rsquo;s modified plan and state a preference for
it.</font></p>

<p><font size="3" face="Times New Roman">Among other modifications,
the CPUC is now proposing to issue preferred stock in lieu of the
common stock previously proposed and to provide for a
&ldquo;reorganization agreement&rdquo; under which the CPUC will
establish retail electric rates sufficient for the Utility to
facilitate achieving and maintaining investment grade credit
ratings and to recover in rates (i) the interest and dividends
payable on, and the amortization and redemption of, the securities
to be issued in connection with the CPUC&rsquo;s modified plan and
(ii) certain recoverable costs.</font></p>

<p><font size="3" face="Times New Roman">Neither the Utility nor
PG&amp;E Corporation can predict whether the Bankruptcy Court will
approve the CPUC&rsquo;s modified plan of reorganization, or
whether it will affect the current confirmation proceeding
scheduled to commence on November 12, 2002.&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Item 7.</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Financial Statements, Pro
Forma Financial Information, and Exhibits</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Exhibit No.</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Description of
Exhibit</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">99.1</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Waiver and Amendment
Agreement, dated August 22, 2002, by and among PG&amp;E
Corporation, PG&amp;E National Energy Group, LLC, Lehman Commercial
Paper Inc. as administrative agent, and the lenders party to the
Amended and Restated Credit Agreement dated as of June 25,
2002</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<font size="3" face="Times New Roman"><br clear="all" />
</font>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">SIGNATURE</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<p><font size="3" face="Times New Roman">Pursuant to the
requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their
behalf by the undersigned thereunto duly authorized.</font></p>

<p><font size="3" face="Times New Roman"></font></p>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">PG&amp;E CORPORATION<br />
 </font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">By:&nbsp; /s/ CHRISTOPHER
P. JOHNS</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CHRISTOPHER
P. JOHNS<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Senior Vice President
and Controller<br />
<br />
 </font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top"></td>
</tr>

<tr height="53">
<td height="53" valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td height="53" valign="top">
<p><font size="3" face="Times New Roman">PACIFIC GAS AND ELECTRIC
COMPANY<br />
 </font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">By:&nbsp;&nbsp;/s/ DINYAR
B. MISTRY</font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face="Times New Roman">&nbsp;&nbsp; &nbsp;
<u>&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></p>
</td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td valign="top">
<p><font size="3" face=
"Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DINYAR B.
MISTRY<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vice President and
Controller</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>

<p><font size="3" face="Times New Roman">Dated:&nbsp; August 23,
2002</font></p>

<font size="3" face="Times New Roman"><br clear="all" />
</font>

<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td colspan="3" valign="top"><font size="3" face=
"Times New Roman"><br clear="all" />
</font>

<p align="center"><font size="3" face="Times New Roman">EXHIBIT
INDEX<a name="_DV_M141"></a></font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">Exhibit No.</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Description of
Exhibit</font></p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p><font size="3" face="Times New Roman">99.1</font></p>
</td>
<td valign="top"></td>
<td valign="top">
<p><font size="3" face="Times New Roman">Waiver and Amendment
Agreement, dated August 22, 2002, by and among PG&amp;E
Corporation, PG&amp;E National Energy Group, LLC, Lehman Commercial
Paper Inc. as administrative agent, and the lenders party to the
Amended and Restated Credit Agreement dated as of June 25,
2002</font></p>
</td>
</tr>
</table>

<p><font size="3" face="Times New Roman"></font></p>
</div>
</body>
</html>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>4
<FILENAME>waiver-agmt3.htm
<DESCRIPTION>AMENDED AND RESTATED WAIVER AND AMENDMENT AGREEMENT
<TEXT>
<html>
<head>
<title>#874019 v5 - gbc pge waiver extension</title>
</head>
<body>
<div>
<p align="center">PG&amp;E Corporation</p>

<p align="center"><a name="_DV_C9">One Market Street, Spear Tower,
Suite 2400<br />
San Francisco, CA&nbsp; 94105</a></p>

<p align="center"><b></b></p>

<p align="center"><u>AMENDED AND RESTATED WAIVER AND AMENDMENT
AGREEMENT</u></p>

<p align="center">August 22, 2002</p>

<p>Lehman Commercial Paper Inc.,</p>

<p>as Administrative Agent</p>

<p>745 Seventh Avenue, 25<sup>th</sup> Floor,</p>

<p>New York, NY&nbsp; 10019</p>

<p>The Lenders listed on Annex A hereto</p>

<p>Re:&nbsp; &nbsp; Amended and Restated Credit Agreement dated as
of June 25, 2002, by and among PG&amp;E Corporation, as borrower,
the lenders party thereto, Lehman Commercial Paper Inc., as
administrative agent, and Lehman Brothers Inc., as lead arranger
and book manager (as amended, the "Credit Agreement") and the
Tranche A Interest Reserve Account&nbsp; Control Agreement and the
<u>Tranche B Interest Reserve Account Control Agreement</u></p>

<p>Ladies and Gentlemen:</p>

<p>This Amended and Restated Waiver and Amendment Agreement
("Waiver and Amendment Agreement") amends and restates the waiver
letter agreement, dated August 16, 2002, among the parties
thereto.</p>

<p>Reference is made to the Credit Agreement.&nbsp; Capitalized
terms used herein but not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement.&nbsp;
Pursuant to Section 6.14 of the Credit Agreement, NEG, Inc. is
required to maintain a rating of at least BBB- by Standard &amp;
Poor's ("<u>S&amp;P</u>") or Baa3 by Moody's on its long-term
unsecured debt obligations (the "<u>Debt Obligations</u>").&nbsp;
On July 31, 2002, S&amp;P announced that the Debt Obligations had
been downgraded below the level required by Section 6.14 and on
August 5, 2002, Moody's announced that the Debt Obligations had
been downgraded below the level required by Section 6.14 (the
"<u>Downgrades</u>").</p>

<p>Pursuant to the terms of certain waiver letter agreements, dated
August&nbsp;1, 2002 and August 16, 2002, among the Borrower and the
Lenders signatories thereto, the Lenders agreed to waive any
Default or Event of Default under Section 6.14 arising from the
Downgrades which waiver shall apply until, and only until, the
Waiver Expiration Date (as defined in the August 16, 2002 waiver
letter agreement).&nbsp; The Borrower hereby requests that the
Lenders agree to extend the waiver of any such Default or Event of
Default under Section 6.14 from August 22, 2002 until and only
until the earliest of the following dates (the "<u>Waiver
Expiration Date</u>"): (a) August&nbsp;30, 2002; (b) the date of a
reduction or termination of, or a reduction or termination in the
availability of, the aggregate of all lenders' Tranche A Aggregate
Exposure (as defined in the NEG Credit Agreement as in effect on
August 16, 2002) to an amount less than $267,000,000 or a reduction
or termination of, or a reduction or termination in the
availability of, the aggregate of all lenders' Tranche B Aggregate
Exposure (as defined in the NEG Credit Agreement as in effect on
August 16, 2002) to an amount less than $431,000,000, under the
$1,250,000,000 Amended and Restated Credit Agreement, dated as of
August 22, 2001, among PG&amp;E National Energy Group, Inc. and the
issuing bank, lenders and agents parties thereto (the "<u>NEG
Credit Agreement</u>"); (c) the date a default or an event of
default shall have occurred with respect to the Indebtedness of
NEG, Inc. under the NEG Credit Agreement or any other event or
condition shall have occurred, the effect of which event or
condition is to cause, or permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its
stated maturity; or (d) the failure by the Borrower to perform or
observe any term, covenant or agreement set forth in this Waiver
and Amendment Agreement.</p>

<p>The parties to this Waiver and Amendment Agreement hereby agree
that none of the restrictions and other provisions of this Waiver
and Amendment Agreement shall be binding upon them with respect to
any discussions concerning any future proposed waivers related to
the Credit Agreement or to any future proposed amendment to the
Credit Agreement or any of the related documents unless any such
discussion is specifically agreed to in writing.</p>

<p>In consideration of the foregoing, (I) the Borrower agrees and
covenants as follows for the period from the date hereof to the
Waiver Expiration Date:</p>

<p>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; notwithstanding
anything provided to the contrary in the Credit Agreement, the
reinvestment of any proceeds of any event described in Sections
3.2(b), 3.2(c), 3.2(e), and 3.2(f) may only be made to the extent
specified in Part II of the Business Plan for expenditures in the
Scheduled Projects;</p>

<p>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; notwithstanding
anything provided to the contrary in the Credit Agreement, from
August 16, 2002 and until the Waiver Expiration Date, the Borrower
shall not make any Investment or Capital Expenditure or make any
other payment to any of its subsidiaries, except that so long as no
Default or Event of Default shall have occurred and be continuing,
the Borrower may make such Investment or Capital Expenditure, or
payment to its subsidiaries, in an amount not to exceed $15,000,000
in the aggregate (taking into account any amount as may be used by
the Borrower in any such transaction to the extent permitted by
clause (A) of the proviso of Section 3.2(b) of the Credit
Agreement), <u>provided</u> that (i) the amount of any cash
Dividend actually received by the Borrower after the date hereof
may be added to such amount for purposes of determining whether the
Borrower is in compliance with this clause (b) and (ii) nothing
herein shall restrict the ability of the Borrower to make such
Investment or Capital Expenditure in PGE Utility or payment to PGE
Utility, in each case, as reasonably determined by the Borrower
that such transaction is required by applicable Law or the Holding
Company Conditions, and the Borrower hereby advises the Lenders
that it believes such $15,000,000 should be sufficient to discharge
any of its obligations during the period between August 16, 2002
and the Waiver Expiration Date;</p>

<p>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the Borrower shall
deliver an Officer's Certificate from the Chief Executive Officer,
Chief Financial Officer, or Treasurer of the Borrower, dated the
date hereof, certifying and stating, after due inquiry, the amount
of cash and Cash Equivalents, then held by the Borrower (the
"<u>Available Cash Amount</u>") on the date hereof;</p>

<p>(d) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the Borrower shall pay
or reimburse the Administrative Agent and each Lender for all of
its reasonable out-of-pocket costs and expenses in connection with
the preparation, negotiation and execution of this Waiver and
Amendment Agreement, including, without limitation, the reasonable
fees and disbursements of counsel to the Administrative Agent and
counsel to GECC, as a Lender, and counsel to the Tranche B
Lenders;</p>

<p>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the Borrower
shall, as promptly as practicable after the date hereof, file a
form 8-K disclosing the material terms and conditions of this
Waiver and Amendment Agreement and attaching thereto a copy of this
Waiver and Amendment Agreement;</p>

<p>(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; on or prior
to August 26, 2002, 3:00 p.m. (EDT), the Borrower shall have
deposited such amount as may be necessary into the Tranche A
Interest Reserve Account and the Tranche B Interest Reserve
Account, respectively, such that the aggregate amount of cash and
Cash Equivalents held in each of the Tranche A Interest Reserve
Account and the Tranche B Interest Reserve Account shall be in an
amount equal to $90,000,000 in the&nbsp; case of the Tranche A
Interest Reserve Account and $ 63,000,000 in the case of the
Tranche B Interest Reserve Account;</p>

<p>(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Borrower will
not permit the LLC or any of LLC's subsidiaries to take any of the
actions prohibited under Sections 7.1, 7.2, 7.4, 7A.1, 7A.2 and
7A.4 of the Credit Agreement provided that: (i) except for asset
sales by any NEG Subsidiary in the ordinary course of business in
an aggregate amount not to exceed $5,000,000 for all NEG
Subsidiaries, clause (vii) of Section&nbsp;7.2 and Section 7A.2
shall not be applicable as exceptions to such covenants for all
purposes of the Credit Agreement and this clause (I)(g), and (ii)
except for (x) draws and other credit advances under current credit
facilities and other current loan documents of any NEG Subsidiary
to the extent such credit facilities and such other loan documents
are permitted under clause (vii) of Section&nbsp;7.4 and Section
7A.4 on the date hereof, (y) Hedging Agreements of any NEG
Subsidiary and Contingent Obligations of NEG, Inc. or any NEG
Subsidiary with respect to Hedging Agreements of any NEG
Subsidiary, in each case in the ordinary course of business and (z)
other Indebtedness incurred by any NEG Subsidiary in the ordinary
course of business in an aggregate amount not to exceed $75,000,000
for all NEG Subsidiaries, clauses (vii) and (ix) of Section 7.4 and
Section 7A.4 shall not be applicable as exceptions to such
covenants for all purposes of the Credit Agreement and this clause
(I)(g); and</p>

<p>(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; notwithstanding
anything provided to the contrary in the Credit Agreement, no NEG
Equity Transaction shall be permitted; and</p>

<p>(II)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the parties hereto
agree to amend the Credit Agreement as follows:</p>

<p>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 7.14 (b)
is hereby amended by (i) deleting in clause (i) thereof the words
"the amount of interest payable on the Tranche A Loan during the
two-year period following such Interest Payment Date" and
substituting the words "$90,000,000" and (ii) deleting in clause
(ii) the words "the amount of interest payable on the Tranche B
Loan during the two-year period following such Interest Payment
Date" and substituting the words "$63,000,000; provided that on and
after March 2, 2004 such amount may be reduced on the last Business
Day of each month so that it shall not be required to exceed (x) in
the case of the Tranche A Interest Reserve Account, the amount of
interest to be payable on the Tranche A Loan from such date to the
then effective maturity date of the Tranche A Loan and (y) in the
case of the Tranche B Interest Reserve Account, the amount of
interest to be payable on the Tranche B Loan from such date to the
Tranche B Maturity Date";</p>

<p>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 7A.14 is
hereby amended by deleting the&nbsp; words "the amount of interest
on the Tranche B Loan during the two-year period following such
Interest Payment Date" and substituting the words "$63,000,000;
provided that on and after March 2, 2004 such amount may be reduced
on the last Business Day of each month so that it shall not be
required to exceed the amount of interest to be payable on the
Tranche B Loan from such date to the Tranche B Maturity Date";</p>

<p>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section
8A.1(c)(iv) is hereby amended by replacing the words "and the
amount on deposit in the Tranche B Interest Reserve Account is
equal to or less than the amount of interest estimated, in the
manner described in Section 7A.14 to be payable on the Tranche B
Loan for the next nine-month period" with the words "or the amount
on deposit in the Tranche B Interest Reserve Account is less than
the amount required under Section 7A.14";</p>

<p>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 9.11(b)(v)
is hereby amended by inserting the words "in an amount less than
$50,000,000" after the words "any such participation" in such
Section 9.11(b)(v); and</p>

<p>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Section 10.3 is
amended by adding the words "or any Lender" after the words
"Administrative Agent" each time such words appear in such Section
10.3.</p>

<p>The Collateral Agent agrees that not later than five (5)
Business Days after receipt of such amounts required to be
deposited pursuant to Section (I)(f) above, the Collateral Agent
shall deliver written notice of the receipt of such amounts to the
Tranche A Lender and the Tranche B Lenders.</p>

<p>For purposes of this Waiver and Amendment Agreement,
"<u>subsidiary</u>" shall mean, with respect to any Person, any
corporation, partnership or other entity of which any of the
securities or other ownership interests are directly or indirectly
owned or controlled by such Person or one or more subsidiaries of
such Person or by such Person and one or more subsidiaries of such
Person.</p>

<p>Each of the parties hereto by its execution and delivery of this
Waiver and Amendment Agreement consent to the amendments as set
forth herein in accordance with Section 9.10 of the Credit
Agreement.&nbsp;</p>

<p>The Borrower and LLC acknowledge and agree that none of the
signatories to this Waiver and Amendment Agreement is waiving any
other Default or Event of Default or any other provision in the
Credit Agreement and except as expressly provided herein, nothing
in this Waiver and Amendment Agreement shall constitute a course of
dealing between the parties, or constitute a modification or
amendment of any other provision of the Credit Agreement and the
provisions of the Credit Agreement and the other Financing
Documents are and shall remain in full force and effect.</p>

<p>The Borrower and LLC hereby unconditionally and irrevocably
acquit and fully forever release and discharge the undersigned
Lenders, their participants, and the Lenders' and their
participants' respective subsidiaries, affiliates, members,
partners, officers, employees, representatives, agents, managers,
counsel, directors, successors and assigns, both present and
former, from any and all actions, cause of action, claims, demands,
remedies, suits, damages and liabilities of whatever kind or
nature, in law or in equity, now known or unknown, suspected or
unsuspected to the extent that any of the foregoing arises from any
action or failure to act on or prior to the date hereof and relates
to or arises out of this Waiver and Amendment Agreement, the Credit
Agreement or any other Financing Documents or the transactions
contemplated hereby or thereby ("<u>Released Claims</u>"). The
Borrower covenants and agrees that neither it nor any of the
Covered Parties shall commence, and in any way, prosecute or cause
to be commenced or prosecuted against any of the Persons mentioned
above any action or other proceeding based upon any of the Released
Claims.</p>

<p>The Borrower also acknowledges, ratifies and affirms the
validity and enforceability of the Credit Agreement and all liens
and security interests granted thereunder or under any of the
Security Documents to the Lenders as collateral security for its
obligations and indebtedness owing under the Loan Documents (the
"<u>Obligations</u>") and acknowledges that all such liens and
security interests and all collateral pledged as security for the
Obligations continue to be and remain collateral for the
Obligations from and after the date hereof.</p>

<p>In furtherance to the rights of the Lenders under Section 6.2 of
the Credit Agreement, the Borrower shall, and shall cause NEG, Inc.
and other members of the NEG Group to be available, at the request
of any of the Lenders, to discuss with the Lenders, at any time and
from time to time, the affairs, finances and accounts of the
Borrower, NEG, Inc. and other members of the NEG Group (including,
without limitation, any guarantee or financial support with respect
to the operation or business of NEG, Inc. or any other member of
the NEG Group and any action or proposed action of the Borrower,
NEG, Inc. or any member of the NEG Group with respect thereto in
connection with the Downgrades).</p>

<p>This Waiver and Amendment Agreement hereby amends Section 7 of
the Tranche A Interest Reserve Account Control Agreement and the
Tranche B Interest Reserve Account Control Agreement by adding the
following sentence at the end thereof:&nbsp; "The Collateral Agent
agrees that it shall not amend or consent to any amendment to any
terms or provisions of (a) the Tranche A Interest Reserve Account
Control Agreement without the consent of the required Tranche A
Lenders or (b) the Tranche B Interest Reserve Account Control
Agreement without the consent of the required Tranche B
Lenders."</p>

<p>This Waiver and Amendment Agreement shall be governed by, and
construed in accordance with, the law of the State of New York
without regard to the conflict of law rules thereof (other than
Section 5-1401 of the New York General Obligations Law).&nbsp; This
Waiver and Amendment Agreement may be executed in any number of
counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered by
facsimile or otherwise shall be an original, but all of which shall
together constitute one and the same instrument.</p>

<p>This Waiver and Amendment Agreement shall become effective as of
the date hereof when the Borrower, LLC, the Tranche A Lender and
the required Tranche B Lenders shall have executed and delivered
this Waiver and Amendment Agreement, and received a fully executed
counterpart copy, by facsimile or otherwise, of this Waiver and
Amendment Agreement, and Officer's Certificate of the Borrower
described above.</p>

<table border="0" cellspacing="0" cellpadding="0" width="631">
<tr>
<td valign="top"></td>
<td valign="top"></td>
<td colspan="2" valign="top">
<p>Very truly yours,</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td colspan="2" valign="top">
<p>PG&amp;E CORPORATION</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top">
<p>LEROY BARNES</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top">
<p>Name:</p>
</td>
<td valign="top">
<p>Leroy Barnes</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top">
<p>Title:</p>
</td>
<td valign="top">
<p>Vice President &amp; Treasurer</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td colspan="2" valign="top">
<p>PG&amp;E NATIONAL ENERGY GROUP, LLC</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top">
<p>JOHN R. COOPER</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top">
<p>Name:</p>
</td>
<td valign="top">
<p>John R. Cooper</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top">
<p>Title:</p>
</td>
<td valign="top">
<p>Senior Vice President</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td colspan="2" valign="top">
<p><b>Agreed and Accepted:</b></p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td colspan="2" valign="top">
<p><b><i>Administrative Agent</i>:</b></p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td colspan="2" valign="top">
<p>LEHMAN COMMERCIAL PAPER INC.</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>JAMES P. SEERY, JR.</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Name:</p>
</td>
<td valign="top">
<p>James P. Seery, Jr.</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Title:</p>
</td>
<td valign="top">
<p>Authorized Signatory</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Date:</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td colspan="2" valign="top">
<p><b><i>Lenders</i>:</b></p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td colspan="2" valign="top">
<p>LEHMAN COMMERCIAL PAPER INC.</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>JAMES P. SEERY, JR.</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Name:</p>
</td>
<td valign="top">
<p>James P. Seery, Jr.</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Title:</p>
</td>
<td valign="top">
<p>Authorized Signatory</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Date:</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td colspan="2" valign="top">
<p>GENERAL ELECTRIC CAPITAL CORPORATION</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>KEVIN P. WALSH</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Name:</p>
</td>
<td valign="top">
<p>Kevin P. Walsh</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Title:</p>
</td>
<td valign="top">
<p>Managing Director</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Date:</p>
</td>
<td valign="top">
<p>August 22, 2002</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td colspan="2" valign="top">
<p>WILMINGTON TRUST COMPANY</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>BRUCE L. BISSON</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Name:</p>
</td>
<td valign="top">
<p>Bruce L. Bisson</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Title:</p>
</td>
<td valign="top">
<p>Vice President</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Date:</p>
</td>
<td valign="top">
<p>August 22, 2002</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td colspan="2" valign="top">
<p>WATERSHED CAPITAL INSTITUTIONAL PARTNERS, L.P.</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td colspan="2" valign="top">
<p>WATERSHED CAPITAL PARTNERS (OFFSHORE), LTD.</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td colspan="2" valign="top">
<p>WATERSHED CAPITAL PARTNERS, L.P.</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td colspan="2" valign="top">
<p>by WATERSHED ASSET MANAGEMENT, L.L.C. as its Investment
Manager</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>MERIDEE A. MOORE</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Name:</p>
</td>
<td valign="top">
<p>Meridee A. Moore</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Title:</p>
</td>
<td valign="top">
<p>Senior Managing Member</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Date:</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td colspan="2" valign="top">
<p><b><i>Collateral Agent</i>:</b></p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td colspan="2" valign="top">
<p>DEUTSCHE BANK TRUST COMPANY AMERICAS, in its capacity as
Collateral Agent under the Tranche A Interest Reserve Account
Control Agreement and the Tranche B Interest Reserve Account
Control Agreement</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top"></td>
<td valign="top">
<p>TARA J. COFFEY</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Name:</p>
</td>
<td valign="top">
<p>Tara J. Coffey</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Title:</p>
</td>
<td valign="top">
<p>Vice President</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>

<tr>
<td valign="top">
<p>Date:</p>
</td>
<td valign="top">
<p>8/23/02</p>
</td>
<td valign="top"></td>
<td valign="top"></td>
</tr>
</table>

<b><u><br clear="all" />
</u></b>

<p align="center"><b><u>ANNEX A</u></b></p>

<p align="center"><b><u></u></b></p>

<p align="center"><b><u>Lenders</u></b></p>

<ul type="disc">
<li>DK Acquisition Partners, L.P.</li>

<li>General Electric Capital Corporation</li>

<li>HBK Master Fund L.P.</li>

<li>Lehman Commercial Paper Inc.</li>

<li>Oak Hill Securities Fund, L.P.</li>

<li>Oak Hill Securities Fund II, L.P.</li>
</ul>

<ul type="disc">
<li>Wilmington Trust Company</li>

<li>Watershed Capital Institutional Partners, L.P.</li>

<li>Watershed Capital Partners (Offshore), Ltd.</li>

<li>Watershed Capital Partners, L.P</li>
</ul>
</div>
</body>
</html>


</TEXT>
</DOCUMENT>
</SUBMISSION>
