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