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)

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 8, 2003


	Exact Name of
Commission	Registrant	State or other	IRS Employer
File	as specified in	Jurisdiction of	Identification
Number	its charter	Incorporation	Number

333-66032	PG&E National Energy Group, Inc.	Delaware	94-3316236

PG&E National Energy Group, Inc.
7600 Wisconsin Avenue
Bethesda, Maryland 20814-6161

(Address of principal executive offices) (Zip Code)

(301) 280-6800

(Registrant’s telephone number, including area code)

Item 3. Bankruptcy or Receivership

On July 8, 2003, PG&E National Energy Group, Inc. (“NEG”) and its wholly-owned indirect subsidiaries PG&E Energy Trading Holdings, LLC, PG&E Energy Trading Holdings Corporation, PG&E Energy Trading — Power, L.P., PG&E Energy Trading — Gas Corporation and PG&E ET Investments Corporation (collectively, the “NEG/ET Debtors”) and USGen New England, Inc. (“USGen NE” and, collectively with the NEG/ET Debtors, the “Debtors”), each filed a voluntary petition for relief under the provisions of chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Maryland, Case Nos. 03-30459, 03-30461, 03-30462, 03-30463, 03-30464 and 03-30465. While each of the NEG/ET Debtors has sought to have the cases jointly administered, the Debtors contemplate that USGen NE’s case will be administered separately. Pursuant to chapter 11 of the U.S. Bankruptcy Code, the Debtors retain control of their assets and are authorized to operate their businesses as debtors in possession while subject to the jurisdiction of the Bankruptcy Court.

With the agreement in principle of major creditors as to its key terms, NEG also filed a Plan of Reorganization. This group includes informal bondholders, as well as agents under certain unsecured credit facilities, acting in their individual capacities. The plan anticipates that PG&E Corporation will have no equity interest in NEG or any of its subsidiaries after the Chapter 11 reorganization is approved by the court and implemented. Instead, equity in a reorganized NEG would be distributed proportionately to unsecured creditors as a component of a plan distribution package that would include cash, new debt securities and common stock. However, PG&E Corporation may continue to provide certain services on an interim basis, including the administration of employee benefits. It is anticipated that a Chapter 11 plan for the ET Debtors will be filed at a later date. Similarly, USGen NE’s debt will not be restructured as part of the NEG plan, but will be dealt with at a later date.

A copy of the press release of the Registrant announcing the Chapter 11 filing is attached hereto as attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 5. Other Events

~~Extension~~Board of ~~GenHoldings~~ ~~Transfer~~Directors ~~Date~~— Resignations and Elections

As On ofFebruary, ~~June 30~~27, 2003, ~~lenders~~ toNEG’s ~~certain~~independent ~~subsidiaries~~director, ofAndrew ~~PG&E~~L. ~~Corporation’s~~Stidd, ~~subsidiary~~submitted a letter of resignation, ~~PG&E~~although ~~National~~his ~~Energy~~resignation ~~Group~~was not effective until the Board accepted it on July 7, ~~Inc~~2003. ~~(PG&E~~Frank ~~NEG)~~V. ~~for~~Battle, Jr. was elected to the ~~Athens,~~Board ~~Covert~~of Directors on July 7, ~~Harquahala~~2003 ~~and~~to ~~Millennium~~replace ~~generating~~Mr. Stidd. ~~projects~~Mr. Battle is ~~agreed~~an toindependent ~~extend~~director ~~the~~as ~~date~~that byterm ~~which~~is ~~each~~defined ofin ~~the~~NEG’s ~~projects~~Bylaws. ~~was required~~Subsequent to the beBoard’s ~~transferred~~approval toof the ~~lenders~~filing orof ~~their~~a ~~designees~~voluntary ~~from~~petition for relief under the ~~June~~provisions ~~30,~~of ~~2003~~chapter to11 ~~August~~of 29the U.S. Bankruptcy Code on July 7, 2003, Messrs. Darbee, ~~The~~Stanley ~~Administrative~~and ~~Agent~~Worthington ~~for~~resigned from the Board. On July 8, 2003, ~~lenders~~Thomas ~~has~~B. King resigned from the ~~discretion~~Board toand ~~extend~~Messrs. Hartman ~~this~~and ~~date~~Murphy were elected to ~~September~~the 30Board. Thereafter, the new Board of Directors ratified the ~~2003.~~actions of the prior

~~As previously disclosed,~~1 ~~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,~~Boards ~~in consideration~~ of ~~the~~Directors ~~lenders’~~including ~~waiver of various defaults and additional funding of~~ the ~~projects,~~decision ~~PG&E NEG previously had agreed~~ to ~~cooperate,~~file ~~and to cause its subsidiaries to cooperate,~~a ~~with~~voluntary ~~any~~petition ~~reasonable~~for ~~proposal~~relief ~~regarding~~under ~~disposition of~~ the ~~ownership interests~~provisions inof ~~and/or~~chapter ~~assets~~11 of the ~~projects, on terms and conditions~~U.S. ~~satisfactory~~Bankruptcy ~~to the lenders in their sole discretion~~Code.

The ~~failure~~current tomembers ~~transfer~~ of the ~~projects~~new byBoard ~~August~~of ~~29,~~Directors ~~2003~~are ~~would~~Frank ~~trigger~~V. ~~lender remedies~~Battle, ~~including the right to foreclose on the projects~~Jr. ~~Also~~, ~~as previously~~Sanford ~~disclosed,~~L. ~~PG&E~~Hartman ~~NEG~~and ~~has~~Henry ~~guaranteed~~J. ~~the~~Murphy. ~~obligation~~Messrs. Battle ~~of its~~and ~~subsidiary,~~Murphy ~~GenHoldings I, LLC (GenHoldings) to make equity~~are ~~contributions~~independent todirectors. ~~these projects in the approximate amount of $355 million~~Mr. ~~The~~ Hartman ~~requirement~~is toVice ~~pay~~President ~~this~~and ~~amount~~General ~~will~~Counsel ~~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~~ On ofJuly 8, 2003, the new Board elected Joseph A. Bondi to serve as NEG’s ~~DTE/Georgetown~~chief ~~Tolling~~restructuring ~~Dispute~~officer and chief executive officer subject to Bankruptcy Court approval.

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


Exhibit No.		Description of Document

99.1		Press Release of Registrant, dated July 8, 2003

SIGNATURE

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

PG&E ~~CORPORATION~~NATIONAL ENERGY GROUP, INC By: /s/ ~~CHRISTOPHER~~Thomas PE. ~~JOHNS~~Legro ~~CHRISTOPHER~~Name: PThomas E. ~~JOHNS~~Legro ~~Senior~~Title: Vice President and ~~Controller~~Chief Accounting Officer

~~PG&E NATIONAL ENERGY GROUP, INC. By~~Dated: ~~/s/ THOMAS E. LEGRO THOMAS E. LEGRO Vice President~~ July 8, ~~Controller and Chief Accounting Officer~~ 2003

~~Date: July 2,~~3 ~~2003~~

Exhibit List


Exhibit No.		Description of Document

99.1		Press Release of Registrant, dated July 8, 2003

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