SECURITIES AND EXCHANGE COMMISSION

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: June 16, 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)

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: November 18, 2002

	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	Delaware	94-3316236
	Energy Group, Inc.

PG&E National Energy Group, Inc. 7600 Wisconsin Avenue (mailing address: 7500 Old Georgetown Road) Bethesda, Maryland 20814

(Address of principal executive offices) (Zip Code)

(301) 280-6800 (Registrant’s telephone number, including area code)

Item 5. Other Events

~~This~~As ~~current~~of ~~report~~June on8, ~~Form~~2003, certain ~~8-K~~subsidiaries ~~discusses~~of ~~recent defaults~~PG&E byCorporation’s subsidiary, PG&E National Energy Group, Inc. ~~and~~(PG&E ~~includes forward-looking~~NEG) ~~statements~~entered ~~with respect to potential charges against~~into ~~earnings~~amendments ~~that are necessarily subject~~ to ~~various~~existing ~~risks~~agreements ~~and uncertainties.~~with ~~These~~the ~~statements~~lenders ~~are~~for ~~based~~each onof ~~current expectations and assumptions~~the ~~which~~Lake ~~management~~Road ~~believes are reasonable~~ and onLa ~~information~~Paloma ~~currently~~generating ~~available~~projects tounder ~~management.~~which ~~Actual~~the ~~results could differ~~lenders ~~materially~~agreed ~~from~~to ~~those~~extend ~~contemplated by~~ the ~~forward-looking~~date ~~statements.~~by ~~These~~which ~~statements~~each ~~should~~of bethe ~~read~~projects ~~in conjunction~~were ~~with~~required ~~the~~to ~~forward-looking~~be ~~statement~~transferred ~~factors~~to ~~set forth in~~ the ~~Management~~lenders ~~Discussion~~or ~~and~~their ~~Analysis~~designees ~~of Financial Condition and Results of Operations in the Form 10-Q Quarterly~~from ~~Report~~June of9, ~~PG&E~~2003 ~~NEG~~to ~~for the quarter ended~~ September 30, ~~2002~~2003.

~~Defaults~~As previously disclosed, these existing agreements, entered into as of December 4, 2002, provided, among other things, that it was a default under ~~Various~~the agreements ~~Debt~~if ~~Agreements~~PG&E NEG and ~~Guaranteed~~certain ~~Equity~~of ~~Commitments~~its subsidiaries did not transfer the right, title and interest in, to and under the Lake Road and La Paloma projects to their lenders or the lenders’ designees on or before June 9, 2003.

~~On November 14~~Additionally, ~~2002, PG&E National Energy Group Inc. (PG&E NEG) defaulted on~~in ~~the~~consideration ~~repayment~~ of the ~~$431 million~~lenders’ ~~364-day~~waiver ~~tranche~~ of ~~its~~various ~~Corporate~~defaults ~~Revolver.~~and ~~The~~additional ~~amount~~funding ~~outstanding under the two-year tranche~~ of the ~~Corporate Revolver~~La isPaloma ~~$273 million~~project, ~~the majority of which supports outstanding letters of credit. The default under the Corporate Revolver also constitutes a cross-default under (1)~~ PG&E NEG~~’s Senior Notes ($1 billion~~ ~~outstanding),~~previously ~~(2)~~had ~~its~~agreed ~~guarantee~~to ofcooperate, ~~the~~and ~~Turbine~~to ~~Revolver~~cause ~~($205 million~~its ~~outstanding),~~subsidiaries ~~and~~to ~~(3)~~cooperate, ~~its~~with ~~equity~~any ~~commitment~~reasonable ~~guarantees~~proposal ~~for~~regarding ~~the GenHoldings~~disposition ~~credit facility ($355 million outstanding),~~of ~~for~~ the Laownership ~~Paloma~~interests ~~credit~~in ~~facility ($375 million outstanding)~~ and/or ~~for~~assets of the ~~Lake~~La ~~Road~~Paloma ~~credit facility ($230 million). In addition~~project, on ~~November 15,~~terms ~~2002,~~and ~~PG&E~~conditions ~~NEG~~satisfactory ~~failed~~ to ~~pay~~the alenders ~~$52 million~~in ~~interest~~their ~~payment due~~sole ~~under the Senior Notes~~discretion.

~~Notwithstanding~~The ~~the~~failure ~~defaults,~~to ~~PG&E NEG believes that~~ transfer the ~~lenders~~Lake ~~will~~Road ~~continue to~~and ~~negotiate~~La aPaloma ~~global~~facilities ~~restructuring~~by ofSeptember ~~these~~30, ~~commitments.~~2003 ~~This global restructuring~~ would ~~require~~ ~~PG&E~~result ~~NEG~~in toa ~~abandon~~default, ~~sell,~~giving orthe ~~transfer~~lenders ~~certain~~the ofability ~~PG&E NEG’s~~to ~~merchant~~foreclose ~~assets and reduce energy trading~~on ~~operations~~the facilities. Also, Ifas ~~agreed~~previously todisclosed, by PG&E NEG~~’s lenders and~~ ~~implemented~~has byguaranteed ~~PG&E~~the ~~NEG,~~repayment ~~these~~of ~~various~~a ~~asset transfers,~~portion ~~sales~~of ~~and~~the ~~abandonments~~Lake ~~would~~Road ~~cause~~and ~~substantial~~La Paloma ~~charges~~project tosubsidiary ~~earnings~~debt in ~~either~~ the ~~fourth~~approximate ~~quarter~~amounts of ~~2002~~$230 million orfor inLake ~~2003.~~Road Ifand ~~the~~$375 ~~lenders~~million ~~exercise their~~for ~~default~~La ~~remedies~~Paloma, orwhich ifamounts represent athe ~~restructuring~~subsidiaries’ isequity ~~not~~contributions ~~achieved,~~in ~~PG&E~~the projects. The ~~NEG~~requirement ~~and~~to ~~certain~~pay ~~of its~~these ~~subsidiaries~~equity ~~may~~contributions will beremain ~~compelled~~an toobligation ~~seek~~of ~~protection~~PG&E ~~under~~NEG orthat bewould ~~forced~~survive ~~into~~the ~~Chapter 11~~transfer of the ~~Bankruptcy Code~~projects.

Notwithstanding these restructuring efforts, if PG&E NEG abandons, sells or transfers assets in an effort to meet current liquidity needs or other strategic efforts, PG&E NEG would incur substantial charges to earnings in either the fourth quarter of 2002 or in 2003.

In addition, the default by PG&E NEG will cause cross-defaults to occur under certain master trading agreements entered into between various of PG&E NEG’s energy trading subsidiaries and counterparties. PG&E NEG has guaranteed the energy trading subsidiaries’ obligations under these contracts.

Rating Actions

On November 13, 2002, Moody’s Investors Service (Moody’s) announced its decision to downgrade the credit rating of PG&E NEG to Ca from B3. In addition, Moody’s announced that it was downgrading the credit rating of each of the following PG&E NEG subsidiaries: PG&E Gas Transmission, Northwest Corp. (PG&E GTN) (downgraded to B1 from Ba1); USGen New England, Inc. (USGenNE) (downgraded to Caa1 from B2); and Attala Generating Company, LLC (Attala) (downgraded to Caa2 from B2). The ratings on each of these companies remain negative and PG&E GTN remains under review for possible downgrade.

Moody’s stated in its press release that its rating action reflects PG&E NEG’s disclosures that it would not make certain interest and principal payments under the Corporate Revolver or the Senior Notes. Moody’s stated that its outlook for these companies reflects the uncertainty associated with the outcome of PG&E NEG’s debt restructuring efforts, including the possibility of a bankruptcy filing by PG&E NEG.

On November 14, 2002, Standard & Poor’s (S&P) announced its decision to downgrade the credit rating of PG&E NEG to D from B- and removed the rating from CreditWatch. In addition, S&P announced that it was downgrading the credit rating of each of the following PG&E NEG subsidiaries: PG&E GTN(downgraded to CCC from BB-); USGenNE (downgraded to C from B-); PG&E Energy Trading Holdings Corp. (PG&E ET) (downgraded to C from B-); and Attala (downgraded to C from B-). The ratings on each of the subsidiaries remain on CreditWatch with negative implications. S&P withdrew its rating of PG&E Generating Company, LLC.

S&P stated that its rating action reflects the possibility that PG&E NEG may not be successful in resolving its financial difficulties outside of bankruptcy. S&P lowered PG&E GTN’s rating to below investment grade to reflect S&P’s maximum three-notch differential between the rating of a ring fenced entity and its ultimate parent. S&P noted that PG&E GTN’s stand-alone credit quality remains considerably stronger than the current rating would indicate.

SIGNATURE

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

PG&E CORPORATION By: CHRISTOPHER P. JOHNS CHRISTOPHER P. JOHNS Senior Vice President and Controller PG&E NATIONAL ENERGY GROUP, INC. By: THOMAS E. LEGRO THOMAS E. LEGRO Vice President, Controller and Chief Accounting Officer

ByDate: June ~~/s/ Thomas E. Legro Name: Thomas E. Legro Title: Vice President and Chief Accounting Officer~~16, 2003

Dated: November 18, 2002

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