Michelle,

We enjoyed the meeting with Transwestern and appreciate your support for our
Plan of Reorganization.

We are still looking at a purchase of pipeline capacity from PG&E Topock to
your connection with the South Point Power Plant.  The timing has changed
from when we met in Houston.  At this time, we will not be including this
contract and service to South Point in our FERC filing.  However, we would
like you to review the following proposal.

50,000 dth/day of firm capacity on the Transwestern system from PG&E Topock
to the Calpine South Point Power Plant. The price is to be $0.05 per dth
consisting of $1.395 per dth-month reservation fee and $0.0042 per dth
volumetric charge.

The contract will start with CGT acceptance of the FERC Certificate and
continue to the end date of the Calpine contract, which is the start of our
Section 4 rates.  We anticipate acceptance of the FERC Certificate at the
end of 2002.  Our Section 4 rates would start mid to late 2004.  

The start of the contract is contingent on the following conditions; PG&E is
issued and accepts an FERC Certificate, PG&E is allowed by the FERC to amend
the delivery points in the tariff to include the South Point Power Plant and
PG&E has a contract with Calpine for deliveries to South Point.

Please let me know what you think

Roger Graham
Market Development Manager
(415) 973-2293