Pacific Gas Transmission Company

First Revised Volume No. 1-A

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Effective Date: 07/01/2001, Docket: RP01-400-001, Status: Effective

Substitute Third Revised Sheet No. 130 Substitute Third Revised Sheet No. 130 : Effective

Superseding: Second Revised Sheet No. 130

TRANSPORTATION GENERAL TERMS AND CONDITIONS

(Continued)

33. RIGHT OF FIRST REFUSAL UPON TERMINATION OF FIRM SHIPPER'S SERVICE

AGREEMENT

Firm Shippers (original capacity holders) under PG&E GT-NW's firm

transportation rate schedules of First Revised Volume No. 1-A who

hold capacity for terms greater than or equal to one year at the

maximum authorized reservation charge or rate shall have the right

of first refusal at the expiration of their service agreements,

subject to the following procedures. Original capacity holders must

notify PG&E GT-NW one year prior to the primary expiration date of

their service agreements whether they elect to terminate or not to

terminate the service agreements.

One year prior to the expiration of the service agreement,

PG&E GT-NW will post a notice on its EBB that the original capacity

holder's service agreement will expire and whether the original

capacity holder has either elected or not elected to terminate.

33.1 In the event original capacity holder elects termination, PG&E

GT-NW shall subject this capacity to a bidding process. PG&E

GT-NW will commence open bidding no later than 3 months prior

to the service agreement expiration. The bid period will

be no less than 5 business days in duration. PG&E GT-NW will

announce the bid winner(s) as soon as practicable after the

close of the bid period, provided, however, that PG&E GT-NW

will have no obligation to accept any bid(s) at rates less than

the maximum applicable rate in effect. Tied bids will be

awarded on a pro rata basis. Winning Shipper(s) and PG&E GT-NW

must execute a new firm transportation service agreement prior

to service commencement.

33.2 In the event original capacity holder does not elect

termination, PG&E GT-NW will commence open bidding no later

3 months prior to the service agreement expiration. The bid

period will be no less than 5 business days in duration. PG&E

GT-NW will notify the original capacity holder of the highest

bid(s) as soon as practicable, provided, however, that PG&E

GT-NW will have no obligation to accept any bid(s) at rates

less than the maximum applicable rate in effect. In the event

that PG&E GT-NW does not receive any acceptable bids, the

original capacity holder shall not be entitled to continue to

receive transportation service upon the expiration of its

contract except by agreeing to pay the maximum applicable

tariff rate. If PG&E GT-NW accepts any bid(s) the original

capacity holder will have 2 weeks from the date of notice to

match the highest bid(s), provided that original capacity

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