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<p align="center">SECURITIES AND EXCHANGE COMMISSION</p>

<p align="center"><a name="_DV_M1"></a>Washington, D.C.&nbsp;
20549</p>

<p align="center"><a name="_DV_M2"></a>FORM 8-K</p>

<p align="center"><a name="_DV_M3"></a>CURRENT REPORT</p>

<p align="center"><a name="_DV_M4"></a>PURSUANT TO SECTION 13 OR
15(d) OF THE</p>

<p align="center"><a name="_DV_M5"></a>SECURITIES EXCHANGE ACT OF
1934</p>

<p align="center"><a name="_DV_M6"></a>Date of Report: October 21,
2002</p>

<p align="center"><a name="_DV_M7"></a>PG&amp;E Corporation</p>

<p align="center"><a name=
"_DV_M8"></a>-----------------------------------------------------</p>

<p align="center"><a name="_DV_M9"></a>(Exact Name of Registrant as
Specified in its Charter)</p>

<p align="center"><a name=
"_DV_M10"></a>California&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1-12609&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
94-3234914</p>

<p align="center"><a name=
"_DV_M11"></a>---------------------------------------------------------------------</p>

<p align="center"><a name="_DV_M12"></a>(State or other
Jurisdiction&nbsp;&nbsp;
(Commission&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (IRS Employer</p>

<p align="center"><a name="_DV_M13"></a>of
Incorporation)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
File Number)&nbsp;&nbsp;&nbsp;&nbsp; Identification No.)</p>

<p align="center"><a name="_DV_M14"></a>PG&amp;E Corporation</p>

<p align="center"><a name="_DV_M15"></a>One Market, Spear Tower,
Suite 2400</p>

<p align="center"><a name="_DV_M16"></a>San Francisco, California
94105</p>

<p align="center"><a name=
"_DV_M17"></a>--------------------------------------------------</p>

<p align="center"><a name="_DV_M18"></a>(Address of principal
executive offices) (Zip Code)</p>

<p align="center"><a name="_DV_M19"></a>(415) 267-7000</p>

<p align="center"><a name=
"_DV_M20"></a>---------------------------------------------------</p>

<p align="center"><a name="_DV_M21"></a>(Registrant's telephone
number, including area code)</p>

<p>Item 5. Other Events</p>

<p>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PG&amp;E National
Energy Group Credit Ratings Downgrades</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October 11, 2002, Standard
&amp; Poor&rsquo;s (S&amp;P) announced its decision to downgrade
the credit rating of PG&amp;E National Energy Group, Inc. (PG&amp;E
NEG), a subsidiary of PG&amp;E Corporation, to B- from
BB+.&nbsp;&nbsp; In addition, S&amp;P announced that it was
downgrading the credit rating of each of the following PG&amp;E NEG
subsidiaries: PG&amp;E Gas Transmission, Northwest Corp (PG&amp;E
GTN) (downgraded to BB- from BBB+); USGen New England, Inc.
(USGenNE) (downgraded to B- from BB+); PG&amp;E Generating Company,
LLC (downgraded to B- from BB+); PG&amp;E Energy Trading Holdings
Corp. (PG&amp;E ET) (downgraded to B- from BB+); and Attala
Generating Company, LLC (downgraded to B- from BB+).&nbsp;&nbsp;
The ratings on each of these companies remain on CreditWatch with
negative implications.&nbsp;&nbsp;</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;S&amp;P stated that its rating
action reflects the uncertainty facing PG&amp;E NEG in reaching an
agreement with its bank lenders regarding the impending October 21,
2002, maturity of a $431 million principal payment, and further
noted that PG&amp;E NEG &ldquo;currently has no access to the
capital markets and lacks adequate liquid funds to make the October
21, 2002, payment.&rdquo;&nbsp; S&amp;P noted that it lowered the
ratings on PG&amp;E ET, despite the existence of a corporate
structure that is designed to comply with S&amp;P&rsquo;s criteria
to protect a subsidiary from the bankruptcy of its parent, due to
PG&amp;E ET&rsquo;s reliance on PG&amp;E NEG and its affiliates for
capital and support of PG&amp;E ET&rsquo;s trading operations in
the form of explicit collateral guarantees.&nbsp;&nbsp; S&amp;P
lowered PG&amp;E GTN's rating to below investment grade to reflect
S&amp;P's maximum three-notch differential between the ratings of a
ring fenced entity and its ultimate parent.&nbsp; Although S&amp;P
noted that PG&amp;E GTN is &ldquo;legally ring fenced,&rdquo; and
that PG&amp;E GTN&rsquo;s stand-alone credit quality remains good,
S&amp;P stated it could not view PG&amp;E GTN's rating on a
stand-alone basis because of the 100% ownership by PG&amp;E NEG and
the guarantees that PG&amp;E GTN holds on behalf of
affiliates.&nbsp; S&amp;P lowered the ratings of the other PG&amp;E
NEG subsidiaries noting that because these subsidiaries do not
benefit from any legal ring fencing, there is the possibility that
these subsidiaries would be consolidated in a bankruptcy of
PG&amp;E NEG.</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October 16, 2002, Moody&rsquo;s
Investors Service, Inc. (Moody&rsquo;s) downgraded the credit
ratings of PG&amp;E GTN&rsquo;s senior secured indebtedness to Baa3
from Baa2, USGenNE&rsquo;s pass-through certificates and syndicated
bank credit facility to Ba3 from Baa3, and Attala Generating
Company, LLC&rsquo;s senior secured indebtedness to Ba3 from
Baa3.&nbsp; Moody&rsquo;s stated that its action reflects that
these entities are wholly owned by PG&amp;E NEG, &ldquo;whose
credit profile has deteriorated due to weak operating performance,
low operating cash flow relative to its debt levels, and very tight
liquidity&rdquo; noting that PG&amp;E NEG relies upon excess cash
flow generated by PG&amp;E GTN and USGenNE.&nbsp; Moody's also
noted that it has concerns about the ability of PG&amp;E NEG to
extend its revolving credit facility that expires on October 21,
2002.&nbsp;</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Further, on October 18, 2002,
Moody&rsquo;s downgraded PG&amp;E NEG&rsquo;s senior unsecured
debt, issuer and syndicated bank credit facility to B3 from
B1.&nbsp; Moody&rsquo;s also further downgraded PG&amp;E
GTN&rsquo;s senior unsecured debt to Ba1 from Baa3, USGenNE&rsquo;s
pass-through certificates and syndicated bank credit facility to B2
from Ba3, and Attala Generating Company, LLC&rsquo;s senior secured
debt to B2 from Ba3.&nbsp; Moody&rsquo;s kept these ratings under
review for further possible downgrade.&nbsp;&nbsp; In addition to
its comments in its October 16, 2002 release, Moody&rsquo;s noted
that PG&amp;E NEG had disclosed that it is in negotiations with
lenders under the GenHoldings I, LLC construction facility for the
lenders to fund completion of the projects.</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As previously reported, PG&amp;E
NEG and its rated subsidiaries, including PG&amp;E GTN, have
provided guarantees to counterparties in support of PG&amp;E
ET&rsquo;s energy trading and non-trading activities relating to
PG&amp;E NEG&rsquo;s merchant energy portfolio.&nbsp; The face
amount of PG&amp;E GTN&rsquo;s guarantees, excluding guarantees
relating to tolling agreements, is $468 million.&nbsp; As of
October 7, 2002, the current exposure (excluding exposure under
tolling agreements) guaranteed by PG&amp;E GTN is approximately $83
million.&nbsp; The amount of such exposure varies daily depending
on changes in market prices and net changes in position.&nbsp; In
light of the recent downgrades of PG&amp;E GTN, some counterparties
may seek replacement security to collateralize the exposure
guaranteed by PG&amp;E GTN.&nbsp;</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At October 7, 2002, PG&amp;E ET's
estimated uncollateralized current exposure (excluding exposure
under tolling agreements) is approximately $293 million (including
the exposure guaranteed by PG&amp;E GTN in the amount of $83
million as discussed above).&nbsp; In the past, PG&amp;E ET has
been able to negotiate acceptable arrangements and reduce its
overall exposure to counterparties when PG&amp;E ET or its
counterparties have faced similar situations. There can be no
assurance that PG&amp;E ET can continue to negotiate acceptable
arrangements in the current circumstances.&nbsp; PG&amp;E NEG
cannot quantify with any certainty the actual future calls on
PG&amp;E ET&rsquo;s liquidity, however, based on current estimates
of anticipated demands for collateral, PG&amp;E NEG believes that
PG&amp;E ET has sufficient liquidity to meet anticipated calls for
cash collateral or other credit support, or to otherwise reduce
this uncollateralized exposure. The actual calls for collateral
will depend largely upon counterparties&rsquo; responses to the
ratings downgrades, mutual forbearance as many counterparties also
have been downgraded, pre- and early-pay arrangements, the
continued performance of PG&amp;E NEG companies under the
underlying agreements, whether counterparties have the right to
demand such collateral, the execution of master netting agreements
and offsetting transactions, changes in the amount of the exposure,
and the counterparties&rsquo; other commercial
considerations.&nbsp;</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The face amount of PG&amp;E
NEG&rsquo;s guarantees relating to PG&amp;E ET&rsquo;s tolling
agreements, including $174 million of guarantees provided by
PG&amp;E GTN, is approximately $599 million.&nbsp; This amount
includes $150 million that both PG&amp;E NEG and PG&amp;E GTN have
guaranteed in connection with a tolling agreement with Liberty
Electric Power, L.P. (Liberty).&nbsp; As previously disclosed,
Liberty has provided notice to PG&amp;E ET that the ratings
downgrade of PG&amp;E NEG constituted a material adverse change
under the tolling agreement requiring PG&amp;E ET to post security
in the amount of $150 million.&nbsp; PG&amp;E ET has not posted
such security.&nbsp; PG&amp;E ET is in negotiations with Liberty to
resolve this situation.&nbsp; Under the terms of the guarantees for
an aggregate $150 million, Liberty <strong>must first proceed
against PG&amp;E NEG&rsquo;s guarantee</strong><b>,</b> and can
only demand payment under PG&amp;E GTN&rsquo;s guarantee if
(<strong>1)</strong> PG&amp;E NEG is in bankruptcy or
<strong>(2)</strong> Liberty has made a payment demand on PG&amp;E
NEG which remains unpaid 5 business days after the payment demand
is made.&nbsp;</p>

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If PG&amp;E ET does not replace
guarantees, provide alternative collateral, or agree on other
acceptable arrangements as required, the counterparty has the right
to terminate the related tolling agreement and seek recovery of
damages based upon the difference in the contract price for the
power under the agreement and the market price for the power.
PG&amp;E Corporation and PG&amp;E NEG are unable to predict whether
counterparties will seek to terminate their tolling agreements.</p>

<p><br clear="all" />
</p>

<div align="center">
<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td valign="top">
<p align="center">SIGNATURE</p>
</td>
</tr>
</table>
</div>

<p><a name="_DV_M141"></a>Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto
duly authorized.</p>

<table border="0" cellspacing="0" cellpadding="0" width="649">
<tr>
<td valign="top">
<p>&nbsp;</p>
</td>
<td valign="top">
<p>PG&amp;E CORPORATION</p>
</td>
</tr>

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

<tr>
<td valign="top">
<p>&nbsp;</p>
</td>
<td valign="top">
<p>By:&nbsp; CHRISTOPHER P. JOHNS</p>
</td>
</tr>

<tr>
<td valign="top">
<p>&nbsp;</p>
</td>
<td valign="top">
<p>
&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></p>
</td>
</tr>

<tr>
<td valign="top">
<p>&nbsp;</p>
</td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CHRISTOPHER P. JOHNS<br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Senior Vice President and
Controller</p>
</td>
</tr>

<tr>
<td valign="top">
<p>&nbsp; Dated:&nbsp; October 21, 2002</p>
</td>
<td valign="top"></td>
</tr>
</table>
</div>
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[{"type": "8-K", "sequence": "1", "filename": "final1021.htm", "description": "FORM 8-K", "secsgml_size_bytes": 12277}]
{"company-data": {"conformed-name": "PG&E CORP", "cik": "0001004980", "assigned-sic": "4931", "irs-number": "943234914", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-12609", "film-number": "02794116"}, "business-address": {"street1": "ONE MARKET SPEAR TOWER", "street2": "SUITE 2400", "city": "SAN FRANCISCO", "state": "CA", "zip": "94105", "phone": "4152677000"}, "mail-address": {"street1": "ONE MARKET SPEAR TOWER", "street2": "SUITE 2400", "city": "SAN FRANCISCO", "state": "CA", "zip": "94105"}, "former-company": {"former-conformed-name": "PG&E PARENT CO INC", "date-changed": "19951214"}}
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: October 21,
2002
PG&E Corporation
-----------------------------------------------------
(Exact Name of Registrant as
Specified in its Charter)
California               
1-12609         
94-3234914
---------------------------------------------------------------------
(State or other
Jurisdiction  
(Commission       (IRS Employer
of
Incorporation)             
File Number)     Identification No.)
PG&E Corporation
One Market, Spear Tower,
Suite 2400
San Francisco, California
94105
--------------------------------------------------
(Address of principal
executive offices) (Zip Code)
(415) 267-7000
---------------------------------------------------
(Registrant's telephone
number, including area code)
Item 5. Other Events
A.        PG&E National
Energy Group Credit Ratings Downgrades
On October 11, 2002, Standard
& Poor's (S&P) announced its decision to downgrade
the credit rating of PG&E National Energy Group, Inc. (PG&E
NEG), a subsidiary of PG&E Corporation, to B- from
BB+.   In addition, S&P 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 BB- from BBB+); USGen New England, Inc.
(USGenNE) (downgraded to B- from BB+); PG&E Generating Company,
LLC (downgraded to B- from BB+); PG&E Energy Trading Holdings
Corp. (PG&E ET) (downgraded to B- from BB+); and Attala
Generating Company, LLC (downgraded to B- from BB+).  
The ratings on each of these companies remain on CreditWatch with
negative implications.
S&P stated that its rating
action reflects the uncertainty facing PG&E NEG in reaching an
agreement with its bank lenders regarding the impending October 21,
2002, maturity of a $431 million principal payment, and further
noted that PG&E NEG "currently has no access to the
capital markets and lacks adequate liquid funds to make the October
21, 2002, payment."  S&P noted that it lowered the
ratings on PG&E ET, despite the existence of a corporate
structure that is designed to comply with S&P's criteria
to protect a subsidiary from the bankruptcy of its parent, due to
PG&E ET's reliance on PG&E NEG and its affiliates for
capital and support of PG&E ET's trading operations in
the form of explicit collateral guarantees.   S&P
lowered PG&E GTN's rating to below investment grade to reflect
S&P's maximum three-notch differential between the ratings of a
ring fenced entity and its ultimate parent.  Although S&P
noted that PG&E GTN is "legally ring fenced," and
that PG&E GTN's stand-alone credit quality remains good,
S&P stated it could not view PG&E GTN's rating on a
stand-alone basis because of the 100% ownership by PG&E NEG and
the guarantees that PG&E GTN holds on behalf of
affiliates.  S&P lowered the ratings of the other PG&E
NEG subsidiaries noting that because these subsidiaries do not
benefit from any legal ring fencing, there is the possibility that
these subsidiaries would be consolidated in a bankruptcy of
PG&E NEG.
On October 16, 2002, Moody's
Investors Service, Inc. (Moody's) downgraded the credit
ratings of PG&E GTN's senior secured indebtedness to Baa3
from Baa2, USGenNE's pass-through certificates and syndicated
bank credit facility to Ba3 from Baa3, and Attala Generating
Company, LLC's senior secured indebtedness to Ba3 from
Baa3.  Moody's stated that its action reflects that
these entities are wholly owned by PG&E NEG, "whose
credit profile has deteriorated due to weak operating performance,
low operating cash flow relative to its debt levels, and very tight
liquidity" noting that PG&E NEG relies upon excess cash
flow generated by PG&E GTN and USGenNE.  Moody's also
noted that it has concerns about the ability of PG&E NEG to
extend its revolving credit facility that expires on October 21,
2002.
Further, on October 18, 2002,
Moody's downgraded PG&E NEG's senior unsecured
debt, issuer and syndicated bank credit facility to B3 from
B1.  Moody's also further downgraded PG&E
GTN's senior unsecured debt to Ba1 from Baa3, USGenNE's
pass-through certificates and syndicated bank credit facility to B2
from Ba3, and Attala Generating Company, LLC's senior secured
debt to B2 from Ba3.  Moody's kept these ratings under
review for further possible downgrade.   In addition to
its comments in its October 16, 2002 release, Moody's noted
that PG&E NEG had disclosed that it is in negotiations with
lenders under the GenHoldings I, LLC construction facility for the
lenders to fund completion of the projects.
As previously reported, PG&E
NEG and its rated subsidiaries, including PG&E GTN, have
provided guarantees to counterparties in support of PG&E
ET's energy trading and non-trading activities relating to
PG&E NEG's merchant energy portfolio.  The face
amount of PG&E GTN's guarantees, excluding guarantees
relating to tolling agreements, is $468 million.  As of
October 7, 2002, the current exposure (excluding exposure under
tolling agreements) guaranteed by PG&E GTN is approximately $83
million.  The amount of such exposure varies daily depending
on changes in market prices and net changes in position.  In
light of the recent downgrades of PG&E GTN, some counterparties
may seek replacement security to collateralize the exposure
guaranteed by PG&E GTN.
At October 7, 2002, PG&E ET's
estimated uncollateralized current exposure (excluding exposure
under tolling agreements) is approximately $293 million (including
the exposure guaranteed by PG&E GTN in the amount of $83
million as discussed above).  In the past, PG&E ET has
been able to negotiate acceptable arrangements and reduce its
overall exposure to counterparties when PG&E ET or its
counterparties have faced similar situations. There can be no
assurance that PG&E ET can continue to negotiate acceptable
arrangements in the current circumstances.  PG&E NEG
cannot quantify with any certainty the actual future calls on
PG&E ET's liquidity, however, based on current estimates
of anticipated demands for collateral, PG&E NEG believes that
PG&E ET has sufficient liquidity to meet anticipated calls for
cash collateral or other credit support, or to otherwise reduce
this uncollateralized exposure. The actual calls for collateral
will depend largely upon counterparties' responses to the
ratings downgrades, mutual forbearance as many counterparties also
have been downgraded, pre- and early-pay arrangements, the
continued performance of PG&E NEG companies under the
underlying agreements, whether counterparties have the right to
demand such collateral, the execution of master netting agreements
and offsetting transactions, changes in the amount of the exposure,
and the counterparties' other commercial
considerations.
The face amount of PG&E
NEG's guarantees relating to PG&E ET's tolling
agreements, including $174 million of guarantees provided by
PG&E GTN, is approximately $599 million.  This amount
includes $150 million that both PG&E NEG and PG&E GTN have
guaranteed in connection with a tolling agreement with Liberty
Electric Power, L.P. (Liberty).  As previously disclosed,
Liberty has provided notice to PG&E ET that the ratings
downgrade of PG&E NEG constituted a material adverse change
under the tolling agreement requiring PG&E ET to post security
in the amount of $150 million.  PG&E ET has not posted
such security.  PG&E ET is in negotiations with Liberty to
resolve this situation.  Under the terms of the guarantees for
an aggregate $150 million, Liberty
must first proceed
against PG&E NEG's guarantee
,
and can
only demand payment under PG&E GTN's guarantee if
(
1)
PG&E NEG is in bankruptcy or
(2)
Liberty has made a payment demand on PG&E
NEG which remains unpaid 5 business days after the payment demand
is made.
If PG&E ET does not replace
guarantees, provide alternative collateral, or agree on other
acceptable arrangements as required, the counterparty has the right
to terminate the related tolling agreement and seek recovery of
damages based upon the difference in the contract price for the
power under the agreement and the market price for the power.
PG&E Corporation and PG&E NEG are unable to predict whether
counterparties will seek to terminate their tolling agreements.
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has 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
Dated:  October 21, 2002