Pacific Gas Transmission Company

First Revised Volume No. 1-A

Effective Date: 06/01/2001, Docket: RP01-400-000, Status: Effective

Fourth Revised Sheet No. 103 Fourth Revised Sheet No. 103 : Effective

Superseding: Third Revised Sheet No. 103

TRANSPORTATION GENERAL TERMS AND CONDITIONS

(Continued)

28. CAPACITY RELEASE (Continued)

28.7 Allocation of Parcels (Continued)

(a) Primary Allocation (Continued)

If Releasing Shipper does not specify an option for

determining best bid, Option 2 will be the default

option used.

Under all options, PG&E GT-NW will evaluate and rank

all bids for Parcels.

(b) Right of First Refusal

In the case of a Prearranged Shipper's bid for a

Parcel with a term equal to one month or greater, at

a rate other than at the highest valued bid, pursuant

to the methodology specified by the Releasing

Shipper, if the bid submitted by a subsequent

Replacement Shipper exceeds the value of the

Prearranged Shipper's bid, the Prearranged Shipper

will be allowed to match the higher valued bid. The

Prearranged Shipper will be allowed a match period,

as specified in Section 28.8, to match the higher

valued bid, otherwise, the allocation will be

awarded to subsequent Replacement Shipper(s) in

accordance with the primary and secondary allocation

mechanisms.

To the extent there is more than one Replacement

Shipper submitting a winning bid, the Parcel shall be

allocated based on one of the following tie-breaker

methodologies to be selected by the Releasing

Shipper: pro rata, lottery, or order of submission

(first come/first serve).

(Continued)