Pacific Gas Transmission Company

First Revised Volume No. 1-A

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Effective Date: 02/02/1998, Docket: GT98- 17-000, Status: Effective

First Revised Sheet No. 125 First Revised Sheet No. 125 : Effective

Superseding: Original Sheet No. 125

TRANSPORTATION GENERAL TERMS AND CONDITIONS

(Continued)

30. GAS SUPPLY RESTRUCTURING TRANSITION COSTS (Continued)

30.5 Transition Cost Recovery Mechanism (Continued)

(d) Northwest Shippers' GSR Cost Responsibility -- All

Northwest Shippers (excluding Washington Natural Gas

Company) shall pay a Direct Bill and Washington Natural

Gas shall pay a GSR transition cost surcharge (different

from that provided in (c) above) for their share of GSR

transition costs. The Northwest Shippers' responsibility

shall be equal to 1.3 percent of the Approved GSR costs

that are not absorbed by PG&E GT-NW and in any event shall

not exceed a total of $1,454,000. Of this amount,

one-third, up to $485,000, will be credited against the

amount allocated to the Direct Bill as described in

Paragraph 30.5(b), and two-thirds, up to $969,000, will be

credited against the amount allocated to the GSR surcharge

provided in Paragraph 30.5(c). The amounts allocated to

the Northwest Shippers as a group will be allocated among

the individual Northwest Shippers based on the

percentages shown below and will not exceed the

applicable total amount for each Shipper.

Total

Percentage Amount

Washington Natural Gas Company 55.02% up to $ 800,000

Cascade Natural Gas Corporation 24.07% up to 350,000

Washington Water Power Company/

WP Natural Gas 18.57% up to 270,000

Northwest Natural Gas Company 2.34% up to 34,000

Total Northwest Shippers 100.00% $1,454,000

Washington Water Power Company/WP Natural Gas (WWP),

Cascade Natural Gas Corporation (CNG), and Northwest

Natural Gas Company (NNG) will be billed and will pay

immediately all amounts of the Approved GSR Costs

allocated to them up to the total maximums noted above.

The total amount allocated to Washington Natural Gas

Company (WNG) will be recovered through a volumetric

surcharge over a three-year amortization period based on

the approved commodity throughput for WNG. Any amounts

not recovered at the end of the 36-month amortization

period will be due and payable in one lump sum. Once the

maximum GSR Costs applicable to Northwest Shipper(s), as

such amounts may be adjusted pursuant to the application

of rolled-in rates on the PG&E GT-NW system, have been

collected then the GSR Cost tariff provisions will no

longer apply to such Northwest Shipper(s).

(Continued)