PG&E-ENRON AGREEMENT

Dan:

We propose the following changes for your review. Dave Anderson (Law) and
I are available to discuss these changes tomorrow, 12/17/99, anytime
before 11:00 AM PST if that is convenient for you.

< 4.1:
<
< The Delivery Point shall be as mutually agreed to by Buyer and Seller as
< set forth in Exhibit A and shall be identified by one or more pipeline
< receipt point; mnemonic, pool number, or other identifiers. Buyer will
< take delivery of the Gas at the Delivery Point. The Party who holds title
< to the Gas as a result of a NOVA inventory transfer on the NOVA system in
< Alberta will also hold the extraction rights at the Cochrane Extraction
< Plant (located near Cochrane, Alberta) for the liquids in that Gas.[
< explain, please] We'll explain.
<
< 11.4 Except for an event of Force Majeure of the Agreement, any Party
< that does not fulfill 100% of its obligation shall pay the other Party a
< Liquidated Damages Fee, which shall be calculated using the formulas set
< forth below. The calculation is based on the Price for the specified Daily
< Contract Quantity, and a fixed US $0.25 per MMBtu. The Parties hereto
< acknowledge and agree that the amounts which may be payable hereunder
< Article 11.4 shall be conclusively deemed to be Liquidated Damages and
< shall not be construed as a penalty. No Party shall be liable to the
< other Party for loss of profit, punitive, exemplary, or consequential
< damages.
<
< 11.5 [All caps] The Parties confirm that the express remedies and
< measures of damages provided in this Agreement satisfy the essential
< purposes hereof. For breach of any provision for which an express remedy
< or measure of damages is herein provided, such express remedy or measure
< of damages shall be the sole and exclusive remedy hereunder, the obligor's
< liability shall be limited as set forth in such provision and all other
< remedies or damages at law or equity are waived. If no remedy or measure
< of damages is expressly herein provided, the obligor's liability shall be
< limited to direct actual damages only, and such direct actual damages
< shall be the sole and exclusive remedy hereunder and all other remedies or
< damages at law or equity re waived. Unless expressly herein provided,
< Neither Party shall be liable for consequential, incidental, punitive,
< exemplary or indirect damages, lost profits or other business interruption
< damages, in tort, contract, or otherwise, Except as provided under the
< indemnity provisions of Article 9.1 and 9.2 Article 11.1.
<
< 12.7 Agree to deletion of "Termination Date"
<
< 11.2 Add paragraph to end of Article 11.2:
<
< "Provided however, that Force Majeure shall not excuse non-performance for
< a period of up to 60 Days in the aggregate during any 12 Month period, and
< for any longer period, except for a Force Majeure which physically
< prevents Seller's Transporter from accepting gas hereunder at the Delivery
< Point."
<
Charlotte
(415) 973-6720