corp neg 8-K 7-02-03

SECURITIES AND EXCHANGE COMMISSION

          

Washington, D.C.  20549

          

          

FORM 8-K

          

CURRENT REPORT

          

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

          

Date of Report: July 2, 2003

          

          


Commission
File
Number

Exact Name of
Registrant
as specified in
its charter


State or other
Jurisdiction of
Incorporation


IRS Employer
  Identification
Number

_____________

_____________

_____________

_____________

1-12609

PG&E Corporation

California

94-3234914

333-66032

PG&E National Energy Group, Inc.

Delaware

94-3316236

          

          

PG&E Corporation
One Market, Spear Tower, Suite 2400
San Francisco, California 94105

PG&E National Energy Group, Inc.
7600 Wisconsin Avenue
Bethesda, Maryland 20814

 

          

(Address of principal executive offices) (Zip Code)

          

PG&E Corporation
(415) 267-7000

PG&E National Energy Group, Inc.
(301) 280-6800

          

(Registrant's telephone number, including area code)


________________________________________________________________________________

Item 5. Other Events

Extension of GenHoldings Transfer Date

As of June 30, 2003, lenders to certain subsidiaries of PG&E Corporation’s subsidiary, PG&E National Energy Group, Inc. (PG&E NEG) for the Athens, Covert, Harquahala and Millennium generating projects agreed to extend the date by which each of the projects was required to be transferred to the lenders or their designees from June 30, 2003 to August 29, 2003. The Administrative Agent for the lenders has the discretion to extend this date to September 30, 2003.

As previously disclosed, the existing loan agreements provided, among other things, that an event of default would occur under the agreements if PG&E NEG and certain of its subsidiaries did not transfer the right, title and interest in, to and under the Athens, Covert, Harquahala and Millennium projects to their lenders or the lenders’ designees on or before June 30, 2003. 

Additionally, in consideration of the lenders’ waiver of various defaults and additional funding of the projects, PG&E NEG previously had agreed to cooperate, and to cause its subsidiaries to cooperate, with any reasonable proposal regarding disposition of the ownership interests in and/or assets of the projects, on terms and conditions satisfactory to the lenders in their sole discretion.

The failure to transfer the projects by August 29, 2003 would trigger lender remedies, including the right to foreclose on the projects. Also, as previously disclosed, PG&E NEG has guaranteed the obligation of its subsidiary, GenHoldings I, LLC (GenHoldings) to make equity contributions to these projects in the approximate amount of $355 million.  The requirement to pay this amount will remain an obligation of PG&E NEG that would survive the transfer of the projects.  Neither PG&E NEG nor GenHoldings currently expects to have sufficient funds to make this payment.

Settlement of DTE/Georgetown Tolling Dispute

On June 26, 2003, PG&E Gas Transmission, Northwest Corporation (PG&E GTN), PG&E Energy Trading - Power, LP (PGET), and DTE Georgetown, LLC (DTE) entered into a Termination Agreement which terminated a Tolling Agreement between DTE and PGET dated May 23, 2000.   In consideration for a payment of approximately $30 million by PGET, the Termination Agreement releases and discharges PGET from any and all obligations under the Tolling Agreement and PG&E GTN from any and all obligations under its guarantee of PGET’s obligations, subject to restoration of PG&E GTN’s guarantee obligation in the limited event that DTE may be required to disgorge amounts received from PGET. Under the Tolling Agreement, PGET would have had to make capacity payments totaling approximately $64 million over the next seven years.

Item 7. Financial Statements, Pro Forma Financial Information, and Exhibits

Exhibit 99 – Termination Agreement, dated as of June 24, 2003, by and between PG&E Energy Trading-Power, L.P., PG&E Gas Transmission, Northwest Corporation, and DTE Georgetown, LLC


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

                                                                      

PG&E CORPORATION

          

       

                                                                      

By:  /s/ CHRISTOPHER P. JOHNS

                                                                    

                                                                  

                                                                      

       CHRISTOPHER P. JOHNS
       Senior Vice President and Controller

                                                                       

                                                                    

PG&E NATIONAL ENERGY GROUP, INC.

          

          

                                                                      

By:  /s/ THOMAS E. LEGRO

                                                                    

                                                                  

                                                                      

       THOMAS E. LEGRO
       Vice President, Controller and
       Chief Accounting Officer

                                                                       

Date: July 2, 2003