Pacific Gas Transmission Company

First Revised Volume No. 1-A

Effective Date: 07/06/2002, Docket: RP02-362-000, Status: Effective

Sixth Revised Sheet No. 68 Sixth Revised Sheet No. 68 : Effective

Superseding: Substitute Fifth Revised Sheet No. 68

TRANSPORTATION GENERAL TERMS AND CONDITIONS

(Continued)

18. OPERATING PROVISIONS (Continued)

18.1 Firm Service (Continued)

For capacity that becomes available other than through the

circumstances identified in Paragraphs 28 and 33, requests for

firm capacity shall be accommodated in the following manner

and subject to the following conditions and limitations:

(a) In order to be eligible for firm capacity, a party

requesting service (requestor) must be deemed

credit-worthy per Paragraph 18.3 and submit a valid

request in accordance with the provisions herein.

(b) Pre-Arranged Capacity: PG&E GT-NW may enter into a

pre-arranged service agreement with any party for

available unsubscribed capacity or capacity that becomes

available and is not subject to a right of first refusal;

provided that PG&E GT-NW will post the terms of

the pre-arranged transaction and other parties

will have an opportunity to bid on the capacity. If

another party submits a bid with a higher incremental

economic value, the pre-arranged Shipper will have a

one-time right to match the higher bid in order to retain

the capacity. If the pre-arranged Shipper elects not to

match a higher competing bid, the capacity will be awarded

to the highest creditworthy bidder in accordance with

Paragraph 18.1(e).

capacity on its Internet website. A requestor

that submits a valid request may submit a bid via the

website for the available capacity subsequent to

PG&E GT-NW's posting of such capacity on the website.

The Bid Period will be a minimum of 1 business day for

capacity available for up to 1 month; a minimum of 3

business days for capacity available for greater than one

month but less than one year; and a minimum of 5 business

days for capacity available for one year or more. All

bids not withdrawn prior to the close of the Bidding Period

shall be binding. At the end of the Bidding Period,

PG&E GT-NW will evaluate the bids and determine the bid(s)

having the greatest economic value as determined in

Paragraph 18.1(e) below.

(Continued)