*Pacific Gas Transmission Company*

*First Revised Volume No. 1-A*

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Effective Date: 12/02/1999, Docket: RP99-518-006, Status: Effective

**Substitute Original Sheet No. 8A **Substitute Original Sheet No. 8A : Effective

Superseding: No. 8a

STATEMENT OF EFFECTIVE RATES AND CHARGES

FOR TRANSPORTATION OF NATURAL GAS

(Continued)

NEGOTIATED RATE AGREEMENTS UNDER RATE SCHEDULE ITS-1

Explanatory Footnotes for Negotiated Rates under Rate Schedule ITS-1

1/ This contract does not deviate in any material aspect from the Form of

Service Agreement in this Tariff.

2/ Unless otherwise noted, all Shippers pay PG&E GT-NW’s maximum Mileage

and Non-Mileage Charge, ACA, and contribute fuel in-kind in accordance

with this Tariff.

3/ Index Price References: Unless otherwise noted, references to "Daily

Index Price" shall mean the price survey midpoint for the specified point

as published in Gas Daily for the day of gas flow. Weekend and holiday

prices will be determined using the next available Gas Daily publication.

Unless otherwise noted, the references to the "NGI FOM" for a specified

point shall mean Natural Gas Intelligence’s First of Month Bid Week

Survey (Supplement to NGI’s Weekly Gas Index) Spot Gas Price for the

specified point.

4/ This Agreement is for Service under PG&E GT-NW’s Rate Schedule ITS-1

(E-1). The rate for service under this Agreement will be redetermined

daily as follows: First, an "Index Price" will be calculated each day.

The Index Price will equal the Daily Index Price at Sumas less

the Daily Index Price at Malin, plus $0.05. Second, the Daily Rate for

service will be calculated as follows:

If the Daily Index is less than $-0.05 then Daily Rate = $0.8615299

If the Daily Index is greater than or equal to -$0.05, but less than

$0.05, the Daily Rate is $0.0014096.

If the Daily Index is equal to or greater than $0.05, and not greater

than $0.10, the Daily Rate is ((Daily Index - $0.05) *.5) + $0.01).

If the Daily Index is greater than $0.10, and not greater than $0.16,

the Daily Rate is ((Daily Index - $0.10) *.75) + $0.035).

If the Daily Index is greater than $0.16, the Daily Rate is

((Daily Index - $0.16) *.5) + $0.08).

The Daily Rate shall not be less than $0.0014096/Dth. The average Daily

Rate over the Term of this Agreement will not exceed $0.8615299.