LETTER OF UNDERSTANDINDG

<<PGESpreadvaluationdefinition 4-19.doc<<

I went ahead and made the conforming changes I thought needed to be made to
the Spread Calculation and have one question identified. Please review and
sign off so that we can attach to execution document. Peter

PG&E National Energy Group and any other
company referenced herein that uses the PG&E name or
logo are not the same company as Pacific Gas and
Electric Company, the regulated California utility. Neither
PG&E National Energy Group nor these other
referenced companies are regulated by the California Public
Utilities Commission. Customers of Pacific Gas and Electric Company
do not have to buy products from these companies in order
to continue to receive quality regulated services from the utility.

- PGESpreadvaluationdefinition 4-19.doc