Glenn, are you taking point on all these new Calif. proceedings?  Given Tony's commitment to other projects right now, I'd like you to, with support from Tony and Dan as needed, if Steve and Rob agree.  When Bill Rapp starts in our group Monday, we can start getting him up to speed as well. Thanks.  DF

-----Original Message-----
From: Dan Douglass [mailto:douglass@earthlink.net]
Sent: Wednesday, October 17, 2001 1:34 PM
To: Harris, Steven; Fossum, Drew; Pryor, Tony; Hass, Glen
Subject: Fw: PG&E's Gas Accord II application
Importance: High


Gentlemen,

Attached is PG&E's Gas Accord II application, filed as directed by the
Commission last month in D.01-09-016.  It is captioned as the, "Application
of Pacific Gas and Electric Company (U 39 G) Proposing a Market Structure
and Rules for the Northern California Natural Gas Industry for the Period
Beginning January 1, 2003."  The Commission Order required, "an application
proposing a market structure, rates, and terms and conditions of service
relating to the PG&E gas transmission and storage system for the period
beginning January 1, 2003, when most of the provisions of the existing 'Gas
Accord' are scheduled to expire."  There is no testimony attached.  Instead,
PG&E notes that, "the service of supporting testimony at the time an
application is filed is not required by the Commission's Rules of Practice
and Procedure."  They say that testimony, if any, would be filed after a
prehearing conference is scheduled.  The utility suggests December 17 for
the conference.

In summary, PG&E requests Commission authorization to extend the existing,
approved Gas Accord market structure and rates for a two-year period.  Under
this proposal, those provisions of the Gas Accord currently scheduled to
expire as of January 1, 2003, will be extended through December 31, 2004,
while other provisions of Gas Accord scheduled to expire as of April 1, 2003
(consisting of certain storage-related provisions) will be extended through
March 31, 2005.  As noted by the utility, "This approach would not preclude
parties from proposing specific, justified operational or other limited
changes during the two-year extension period.  However, as discussed below,
parties seeking to obtain Commission approval of changes in the Gas Accord
regime, and thus to alter the status quo, must bear the brden of proof on
such issues."  If the simple, two-year extension of the Gas Accord is
adopted as requested, PG&E says it will waive the 2.5 percent escalation for
the two-year Gas Accord II extension period.

The application also notes that on September 20, 2001, shortly after
issuance of D.01-09-016,  PG&E filed a Plan of Reorganization with the
Bankruptcy Court, which, if adopted, would substantially restructure PG&E's
existing business operations.   As proposed, the Plan of Reorganization
would alter the regulation of PG&E's natural gas transmission and storage
system, as the utility's gas transmission and storage operations would be
transferred from PG&E to a new corporation, and operated under exclusive
FERC jurisdiction.   Assuming FERC accepted such jurisdiction, the CPUC
would no longer would have jurisdiction over the rates or terms and
conditions of service on the PG&E gas transmission and storage system.  Your
thoughts on this development would also be appreciated.

I assume we need to review this application to determine its potential
impact on Transwestern and that we should, of course, monitor the proceeding
generally to determine if any active role is required at a later date.  What
are the fundamental issues that concern Transwestern when considering PG&E?
How do you feel about FERC jurisdiction of its transmission/storage systems?

Finally, note that PG&E states that, "...contributing to uncertainty in the
gas markets is the large number of interstate pipeline construction projects
that have been proposed.  It will take at least a year or two before the
viability and impacts of those various pipeline projects can be confirmed in
the marketplace."  The utility also includes a footnote 9 that references
the Transwestern Red Rock FERC application (as well as seven other projects)
as pending at FERC.

Let's discuss at your convenience.

Dan

Law Offices of Daniel W. Douglass
5959 Topanga Canyon Blvd.  Suite 244
Woodland Hills, CA 91367
Tel:   (818) 596-2201
Fax:  (818) 346-6502
douglass@energyattorney.com
----- Original Message -----
From: "Stewart, John C" <JCSv@pge.com>
To: <alan_reid@pcp.ca>; <andy.bettwy@swgas.com>; <aod@newsdata.com>;
<askaff@energy-law-group.com>; <bcragg@gmssr.com>; <bfinkelstein@turn.org>;
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<dcarroll@dbsr.com>; <douglas.porter@sce.com>; <dwa3@pge.com>;
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<roger.pelote@williams.com>; <ron_oechsler@rmiinc.com>; <ronknecht@aol.com>;
<rpetti@ladwp.com>; <salleyoo@dwt.com>; <sbs@cpuc.ca.gov>;
<skatz@sempratrading.com>; <slins@ci.glendale.ca.us>; <sscott3@enron.com>;
<stomashe@energy.state.ca.us>; <tah@cpuc.ca.gov>; <tdickers@westerngas.com>;
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<steve.huhman@mirant.com>; <pkeeler@br-inc.com>;
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<peter.saunders@paramountres.com>; <michael_r._soland@oxy.com>;
<tsurak@socalgas.com>; <jsuwara@sempra.com>; <JeffreyGray@dwt.com>; "Kauss,
Kent" <KWK3@pge.com>; <wgmanuel@tid.org>; <mflorio@turn.org>
Cc: "Lindh, Frank (Law)" <FRL3@pge.com>; "Lieu, Lisa" <LKL1@pge.com>;
<Fogelmanm@steefel.com>; "McLafferty, Daniel" <MDM8@pge.com>; "Williams,
Ray" <RDW0@pge.com>; "Bellenger, Geoffrey" <GJB2@pge.com>
Sent: Tuesday, October 09, 2001 4:50 PM
Subject: PG&E's Gas Accord II application


Today, October 9, 2001, Pacific Gas and Electric Company (PG&E) filed an
application with the California Public Utilities Commission (CPUC).

In this application, PG&E proposes a market structure and rules for the
northern California natural gas industry, beginning
January 1, 2003.  PG&E's filing was in response to a recent Commission order
(Decision 01-09-016), which directed PG&E to file a "Gas Accord II"
application.

If you have any problems opening these documents, please contact me at (415)
973-8677.


 <<CovLtr_GAII.doc>>        <<GAII_final.doc>>         <<GAII_Exhibit.pdf>>
Thank you,

John Stewart
Case Coordinator
Pacific Gas and Electric Company
(415)973-8677
jcsv@pge.com