Pacific Gas Transmission Company

First Revised Volume No. 1-A

Effective Date: 03/27/2002, Docket: RP02-164-000, Status: Effective

Original Sheet No. 22 Original Sheet No. 22 : Effective

Superseding: No. 22

RATE SCHEDULE LFS-1

LIMITED FIRM TRANSPORTATION SERVICE

(Continued)

3. RATES (Continued)

3.6 Discounted Transportation Rates

Shipper shall pay the Maximum Reservation Charge and the

Maximum Delivery Charge for service under this Rate Schedule

unless PG&E GT-NW offers to discount the Mileage Rate

components or the Non-Mileage Rate components of the

Reservation Rate or the Delivery Rate or the GRI surcharge

under this rate schedule. If PG&E GT-NW elects to discount

any such rate, such discount shall not be anticompetitive or

unduly discriminatory between individual shippers. The rates

for service under this rate schedule shall not be discounted

below the Minimum Reservation Charge, the Minimum Delivery Rate,

and applicable ACA Surcharge.

3.7 Backhauls (as defined in Paragraph 1.30 of the Transportation

General Terms and Conditions) shall be subject to the same

charges as forward haul (as defined in Paragraph 1.29 of the

Transportation General Terms and Conditions) except that no gas

shall be retained by PG&E GT-NW for compressor station fuel,

line loss and other unaccounted-for gas. Backhauls are subject

to the operating conditions of PG&E GT-NW's pipeline and will not

be made available to Shipper if PG&E GT-NW determines, in its

sole discretion, that such transportation is operationally

infeasible or otherwise not available.

(Continued)