RE: Gas Industry Settlement

To signatories to the Comprehensive Settlement:

ALJ Biren has given us until Friday of this week (April 28, 2000) to file
"errata" to the Comprehensive Settlement.

So far, I am planning to make the following non-substantive changes:

1. The table of contents was seriously messed up by an "automatic update"
feature in Word just before we duplicated and filed. I will be putting it
back to the state you saw in the final draft.

2. On p.7, section 1.12, put a period at the end of the last sentence.

3. On p.9, section 1.1.3.1, two thirds of the way down the page, I will be
changing "subject to adjustment annual by the base rate PBR formula" to
"subject to adjustment annually by the base rate PBR formula".

4. On p.27, section 1.5.4, in the third full paragraph on the page, I will
be changing "If only one customer has an OFO day" to "If only one customer
class has an OFO day".

5. Also on p.27, section 1.5.4, bottom line on the page, I will be filling
in the blank with "C" (so it reads "Appendix C")

In the category of "maybe substantive",

1. On p.10, section 1.1.3.2, three lines from the bottom of the page, the
date "October 1, 2000" would be changed to "October 1, 2001". This sentence
refers to including the cost of backbone transmission for core customers
buying gas from SoCalGas in the "procurement" rate. Obviously, our intent
was to do that only once we had unbundled backbone transmission, which
happens on October 1, 2001.

In the category of "substantive":

1. Our capacity term sheet had said that we would unbundled "additional"
(non-reliability) storage for CTAs effective upon implementation of the
settlement (See p.4). The filed settlement managed to drop the section that
provided for this option for CTAs prior to the principal storage change on
April 1, 2001. (The filed settlement is ok for the period starting April 1,
2001). So, to be consistent with the term sheet, we need to insert
something back into the settlement to allow CTAs to opt out of
non-reliability storage in the period from the effective date (90 days after
approval) to April 1, 2001. Obviously, this may not be a very long period.
John Leslie has suggested inserting at the very beginning of Section
5.4.4.3: "In the partial storage year beginning on the effective date of
this Settlement Agreement, and....[continue with current text]." We would
need to cover as part of implementation filings the exact mechanism/pricing
for SoCalGas purchasing gas in storage owned by CTAs if they opt out of
nonreliability storage prior to April 1. 2001. SoCalGas and SDG&E are ok
with John's language and want to make sure it is ok with other signatories.

If you have any problems with any of these changes, please contact me or
Brian Cherry by noon on Friday, April 28. My email is gsullivan@sempra.com
and my phone is (619) 699-5162. Brian's email is bcherry@sempra.com and
phone is (213) 244-3895.

We are looking at the possibility of two or three additional changes, and
Brian may send you a follow-up message.

-- Glen Sullivan
Sempra Energy Law Dept.