Pacific Gas Transmission Company

First Revised Volume No. 1-A

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

Second Revised Sheet No. 140 Second Revised Sheet No. 140 : Effective

Superseding: First Revised Sheet No. 140

GENERAL TERMS AND CONDITIONS

(Continued)

37. ADJUSTMENT MECHANISM FOR FUEL, LINE LOSS, AND OTHER UNACCOUNTED FOR

GAS PERCENTAGES

The effective fuel and line loss percentages under Rate Schedules

FTS-1 and ITS-1 shall be adjusted downward to reflect reductions and

may be adjusted upward to reflect increases in fuel usage and line

loss in accordance with this Section 37.

37.1 Computation of Effective Fuel and Line Loss Percentage

The effective fuel and line loss percentage shall be the sum

of the current fuel and line loss percentage and the fuel and

line loss surcharge percentage.

37.2 The Current Fuel and Line Loss Percentage

(a) For each month, the current fuel and line loss

percentage shall be determined in accordance with

Section 37.2(c) hereof. The current fuel and line

loss shall be effective from the first day of such

month and shall remain in effect for the month.

(b) The current fuel and line loss percentage to be

applicable for the month shall be posted on PG&E GT-NW's

Electronic Bulletin Board not less than seven (7)

days prior to the beginning of the month.

month shall be determined on the basis of (1) the

estimated quantities of gas to be received by PG&E

GT-NW for the account of Shippers during such month and

(2) the projected quantities of gas that shall be

required for fuel and line loss during such month,

adjusted for overrecoveries or underrecoveries of fuel

and line loss during such month preceding the month in

which the current fuel and line loss percentage is

posted; provided, that the percentage shall not

exceed the maximum current fuel and line loss

percentage and shall not be less than the minimum

current fuel and line loss percentage set forth on

the Statement of Effective Rates and Charges.

(Continued)