New PG&E Schedule G-CFS

Jeff,

I wanted to call attention to one of the new PG&E rate schedules (G-CFS)
which Randy Litteneker distributed on Friday evening.

The Assigned Storage Monthly Charge under G-CFS indicates the charge will
become retroactively effective January 2000. How can PG&E implement a back
charge of this nature? I believe these charges under this rate schedule
should not commence until April 2000. The basis for my argument is as
follows....

Proposed Schedule G-CT indicates that "In any storage year under this rate
schedule, a CTA will be allowed one annual cycle for injection, inventory and
withdrawal of gas in storage." While the typical storage year remains in
effect, the charges would start in mid storage season when operational and
economic decisions have already been completed.
Proposed Schedule G-CT indicates that "Prior to March 1, each CTA will be
given the option to reject a percentage of its initial Storage Allocation, up
to 100 percent (%), for the upcoming storage year of April 1 through March 31
(Storage Year)". This option was not given for the current storage year April
2000 - March 2001. Further evidence in the current Schedule G-CT states that
"PG&E will allocate to the CTA, acting on behalf of Customers in the Group, a
pro rate share of of PG&E's total core storage capacity reservations." The
current schedule makes no indication of ability to reject any allocated
portion.

I apologize for continuing to harp on this issue but as stated in proposed
G-CFS, I would incur charges of $506,700 (this is different from the $420,000
I mentioned on the phone because I neglected to include the capacity we will
receive from the PG&E Eneryg Services acquisition. This charge would
obliterate the Gas Desk goals for 2000.

Please call me to discuss when you have a chance. Thanks.

Tim