Pacific Gas Transmission Company

First Revised Volume No. 1-A

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

Substitute Fourth Revised Sheet No. 131 Substitute Fourth Revised Sheet No. 131 : Effective

Superseding: Third Revised Sheet No. 131

TRANSPORTATION GENERAL TERMS AND CONDITIONS

(Continued)

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

SERVICE AGREEMENT (Continued)

33.2 (Continued)

holder shall not have to match any term greater than five years;

and provided further that the original capacity holder shall not

have to match any bid rate higher than the maximum applicable

rate. PG&E GT-NW will announce the winning bid(s) as soon as

practicable after the close of the match period. If the

original capacity holder matches the highest bid(s), the

capacity is awarded to the original capacity holder. If the

original capacity holder does not match the highest bid(s), the

capacity shall be awarded to the highest acceptable bid(s). If

there is more than one winning bid, PG&E GT-NW shall award

capacity on a pro rata basis. New Shippers must execute a firm

transportation service agreement with PG&E GT-NW prior to

service commencement. Original capacity holder is allowed to

retain a portion of its capacity by matching price and term

according to the procedure outlined in this provision, provided

that the original contract path is maintained.

33.3 Bids shall be evaluated on the net present value incorporating

price and term. The net present value of revenues to be received

from a Shipper bidding a Negotiated Rate shall be calculated

using the proposed reservation charge revenues and any proposed

usage charge revenues guaranteed by a minimum volume commitment

or otherwise. Where the Negotiated Rate is based on a Negotiated

Rate Formula, the future value of which cannot be determined at

the time of the bidding, PG&E GT-NW shall estimate the future

revenues to be received under the Negotiated Rate Formula using

currently available data.

33.4 If there are no competing bids other than that of the original

capacity holder, the rate and terms of continuing service is to

be negotiated between existing capacity holder and PG&E GT-NW.

In addition, in this instance, if the existing capacity holder

agrees to pay the maximum authorized rate, the existing

capacity holder may determine the term it desires and PG&E GT-NW

must extend its contract to the existing capacity holder

accordingly.

33.5 Shippers who terminate their service agreements are not liable

for any reservation charges or other charges applicable to the

new Shipper contracting for this capacity.

(Continued)