Pacific Gas Transmission Company

First Revised Volume No. 1-A

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Effective Date: 09/15/1998, Docket: RP98-375-000, Status: Effective

Sixth Revised Sheet No. 5A Sixth Revised Sheet No. 5A : Effective

Superseding: Fifth Revised Sheet No. 5A

STATEMENT OF EFFECTIVE RATES AND CHARGES

FOR TRANSPORTATION OF NATURAL GAS

Notes: (Continued)

(g) Under the terms of the July 29, 1994 Agreement (Agreement)

between PG&E GT-NW and The Washington Water Power Company (WWP)

(expressly incorporated herein), the initial negotiated rate is

$0.163955 per Dth-mile, which is designed by dividing first-year

annual revenues of $3.9 million by Dth-mile demand billing

determinants of 23,787,000 (22,500 Dth/d x 12 months x 88.1 miles).

Each year thereafter, until the end of the primary term of the

Agreement, the rate shall increase or decrease by the same overall

percentage increase or decrease in a "Benchmark" rate based on

PacifiCorp's average electric rate in effect during the preceding

contract year under its Residential Rate Schedule 4, or superseding

Rate Schedule (or those of its subsidiaries, successors, assigns, or

of substitute service providers) applicable to residential heating

service for a residential customer utilizing 1,000 kilowatt hours per

month. That Benchmark rate shall encompass all of the rate components

of the aforementioned Rate Schedule. The Agreement provides for

recovery of any "deficiency" amounts (plus carrying costs at PG&E

GT-NW's allowed rate of return on investment for the applicable

period) over the primary term of the Agreement to the extent permitted

by increases in the foregoing electric rates. WWP's first-year

deficiency amount of $3.394 million is equal to WWP's revenue

responsibility at the maximum E-2 (Medford) rates, or $7.294 million

[(22,500 Dth/d x 12 months x 88.1 miles x maximum Reservation Charge)

+ (22,500 Dth/d x 365 days x 88.1 miles x 95% load factor x maximum

Delivery Charge)], less WWP's first-year revenue responsibility of

$3.9 million. For each contract year after the end of the primary

term of the Agreement, the rate shall equal PG&E GT-NW's

then-effective rate as set forth in the applicable tariff for firm

transportation service on the Medford Extension. In the event that

PG&E GT-NW recovers the "deficiency" amounts of the Firm

Transportation Service Agreement during the primary term, WWP shall

pay the then-applicable tariff rate for firm transportation service

on the Medford Extension (E-1) or successor rate. PG&E GT-NW shall

file an annual report with the Commission specifying (a) the

calculation of the Medford Extension cost-of-service; (b) the

revenues collected under the Medford (E-2) Rate; (c) the deferred

cost recovery mechanism account balance, including carrying charges;

and (d) workpapers detailing the computations.

(h) Applies to Diamond Energy service, which commences 1998.

Rate is negotiated reservation charge of $0.090388 for first

45,000 Dth/d and $0.035477 for the second 45,000 Dth/d. Revenues

will be applied to annual revenue requirement on the Medford Extension.

(Continued)