Please forward to anyone else who might be interested.
---------------------- Forwarded by Rebecca W Cantrell/HOU/ECT on 05/30/2001 
06:11 PM ---------------------------


"Tracey Bradley" <tbradley@bracepatt.com> on 05/30/2001 05:59:43 PM
To: <jlimone@aeglobalmarkets.com>, "Charles Shoneman" 
<cshoneman@bracepatt.com>, "Randall Rich" <rrich@bracepatt.com>, 
<agold@coral-energy.com>, <rreilley@coral-energy.com>, 
<Rebecca.W.Cantrell@enron.com>, <pat.cradock@huskyenergy.ca>
cc:  
Subject: PG&E opens bids to add 1.2 bcf of natgas in Calif


FYI

Wednesday May 30, 3:55 pm Eastern Time
PG&E opens bids to add 1.2 bcf of natgas in Calif
(UPDATE: adds background in paragraphs 6-11)

SAN FRANCISCO, May 30 (Reuters) - Pacific Gas & Electric Co., in an effort to 
determine interest in expanding its California natural gas pipeline system, 
said it was accepting bids for up to 1.2 billion cubic feet a day (bcfd) of 
gas transport capacity.

The move by the company, a subsidiary of San Francisco-based PG&E Corp. 
(NYSE:PCG - news), responds to California's growing demand for natural gas to 
run new power plants.

Gas suppliers and big industrial customers participating in the bidding 
round, called an open season, have until July 31 to submit offers stating how 
much pipeline capacity they are willing to purchase and the price they are 
willing to pay.

Based on the results of this round, PG&E will decide whether to proceed with 
the planned 1.2 bcf expansion -- enough to run seven 1,000 megawatt gas-fired 
power plants -- or modify it to accommodate an even bigger volume of gas.

As it stands, PG&E's open season is offering firm capacity on its its 
Redwood, Baja, and Silverado pipelines.

These lines transport gas from Malin, Oregon; Topock, Arizona, and California 
gas production to the company's local transmission system and other pipelines.

PG&E's current intrastate pipeline system can transport more than 3 bcf of 
gas a day throughout Northern and Central California.

Over the past year, utilization rates on many California pipelines have 
jumped from 75 percent to near full capacity, limiting deliveries into the 
state needed to drive gas-fired power plants.

Demand for gas, which already accounts for more than a third of California's 
power generation, is expected to jump.

Since April 1999, California has approved 14 major gas-fired projects with a 
combined generation capacity of more than 9,500 megawatts. Ten gas-fired 
plants, with a total generation capacity of more than 6,000 megawatts, are 
already under construction.

Over the past three months plans to build or expand interstate lines carrying 
gas to California have been announced by Sempra Energy (NYSE:SRE - news) unit 
Southern California Gas Co., Enron (NYSE:ENE - news) unit Transwestern, 
Williams Cos' (NYSE:WMB - news) unit Kern River Transmission, El Paso Corp. 
(NYSE:EPG - news) units El Paso Natural Gas Co. and Mohave Pipeline Co., 
Questar Corp. (NYSE:STR - news), Calpine Corp. (NYSE:CPN - news) and Kinder 
Morgan (NYSE:KMP - news).