Item 5. Other Events.
Pacific Gas and Electric Company (the "Servicer") is the servicer of
the California Infrastructure and Economic Development Bank Special Purpose
Trust PG&E-1, Rate Reduction Certificates, Series 1997-1 (the "Certificates").
On January 4, 2001, Standard and Poor's lowered the short-term credit rating of
the Servicer to A-3, and on January 5, 2001, Moody's Investors Services Inc.
lowered the short-term credit rating of the Servicer to P-3. In accordance
with Section 6.11(b) of the Transition Property Servicing Agreement dated as
of December 8, 1997 between the Servicer and PG&E Funding LLC, on
January 8, 2001 the Servicer began remitting the charges paid by ratepayers for
payments on the Certificates to Bankers Trust Company of California, N.A., as
trustee, on a daily basis. The Servicer had previously been required to remit
these amounts once a month.
