Greetings Folks:

As you know, the Gas Accord is coming to an end and PG&E's trying to figure
out where to go from here. I would argue that what happens with PG&E is
equally, if not more, important as what happens with SoCal.

As you also know, we're faced with a retrograde PUC that, by all accounts,
longs for the "halcyon days" of command-and-control regulation. As such, I
think it would be very useful, and cost-effective, to pull together the
effective coalition we established in the SoCalGas settlement.

In that coalition, some of us contributed dollars and some contributed
experts. I think we should employ that approach again. I asked Mike Day,
who I think most agree, did a pretty good job of representing us in the SoCal
settlement, to make a proposal for representing us in the PG&E case. Mike's
proposal is attached. Finally, if there's anyone else you think we ought to
include in our coalition, please let me know.

Let me know what you think.

Hope all is well with you and yours.

Best,
Jeff

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Jeff:

Goodin, MacBride is willing and able to represent a coalition of
end-users, marketers, and other interested parties in the PG&E Gas Accord II
proceeding in much the same fashion that it represented multiple parties in
the GRI proceeding in both PG&E and SoCalGas settlements. We would propose
to split our monthly billings for legal fees and expenses equally between
the parties who agree to join such a coalition. In exchange for joining the
coalition, parties would receive frequent updates on the status of
settlement talks and other proceedings, participate in conference calls to
reach decisions on coalition positions, and have the ability to call on the
GMSRD lawyers on the case in order to answer specific questions or provide
any other useful information.

I envision using several attorneys for various portions of the
proceeding, including using associates and paralegals for research, and
other GMSRD partners with gas experience for preparation of pleadings, etc.
However, most of the face to face negotiating, including working with
Commissioners and advisors as necessary, would be done by myself as lead
partner on the case. I have attached a fee schedule for the GMSRD attorneys
who would likely have some involvement in the case. Because the majority of
this work will be done in 2001, these rates reflect our new 2001 hourly
fees. However, in an effort to encourage participation in the coalition,
and because several potential members of the coalition are past or existing
clients, we propose to reduce our standard fees with a 15% discount for all
participants in the coalition. With this discount, these would be the
lowest fees available to any of our clients in the coming year.

I have not made any type of estimate of legal expenses for this
proceeding, as it is exceedingly difficult to forecast how protracted the
proceedings will be. Once we begin participating in the proceeding and we
collectively decide how best to proceed in terms of actual participation in
the case, we can provide frequent budget reports and make more useful
budgetary estimates. If you require some type of estimation sooner than
that, please let me know.

Thank you for your interest in using our services. Please contact
me directly at (415) 765-8408 if you have any questions.

Mike Day, partner
Goodin, MacBride, Squeri, Ritchie & Day

GMSRD Fee Schedule for Gas Accord II proceedings

Michael Day $300

James McTarnaghan $260

Jeanne Bennett $220

Alexandra Ozols $130

Heather Patrick, paralegal $ 85