FYI, PCB mtg with SoCal

The third quarter PCB meeting with Southern California Gas Company was held
this morning. SoCal presented a third quarter invoce of their PCB management
and disposal activities for which Transwestern is responsible for $120,602.19
(86%). All charges were appropriate and considered normal operating expenses
for PCB activities in California. On a similar note, while speaking to Ralph
Komai, PCB person for SoCal, some interesting things are happening on their
system and are presented below:

SoCal is beginning to notice accumulations of PCB pipeline liquids on
portions of their system which has been considered PCB clean. It is these
portions of their pipeline for which they have been petitioning EPA to
declassify. These liquids are not new liquids introductions into the SoCal
system but historic liquids that have laid in their pipeline. Because of the
fact that Transwestern is not seeing liquids accumulations at the compressor
stations upstream of Needles, we know that liquids are not being sent inot
California. Due to the increase of Transwestern gas into the SoCal system,
it appears the gas is sweeping old historic liquids into these new pipeline
areas.

SoCal will be meeting with PG&E within the next couple of weeks to discuss
the discovery of pipeline liquids at an interconnect where SoCal provides
natural gas to PG&E.The PCB concentrations are less than 5 ppm. The location
of this interconnect is near Bakersfield, Ca.

Southwest Gas has requested that 2 filter separators be installed at 2
interconnects where they receive gas from SoCal. As you know, Transwetern
supplies gas to SoCal who then provides gas to Southwest. The price of the
2 separators will be approx. $33,000 plus installation charges. Ralph stated
that theses charges will show up on the first or second quarter of 2002. Of
note, Southwest has asked SoCal to install each separator on the SoCal side
of the interconnect which means that maintenance and operation of each
separator will be SoCal's responsiblility. these charges will be passed on
to Transwestern at 86%.