Gas Strategy OII Parties:

Attached for your review is a draft letter which we propose to send to the
Energy Division next week on Thursday, February 1, 2001.  Such a letter is
required by Section 2.1.3.7 of our Comprehensive Gas OII Settlement that was
approved by the CPUC in D.00-05-049, which states that "By February 1, 2001,
the OFO Forum will recommend to the Commission whether the amount of storage
capacity allocated to balancing service should be revised."  Based on prior
discussions with many of you, as well as the fact that we now have many
other higher priorities, it appears to be the consensus that no change of
this type should be implemented during the term of the Gas Accord.

Please let me know by e-mail no later than Wednesday, January 31, if you
have concerns with the attached draft letter, so that I may file it with the
CPUC on February 1st.

Thank you for your attention to this follow-up matter.

Randy Litteneker
PG&E Law Department
rjl9@pge.com
415-973-2179

 <<Gas OII Storage for Balancing Letter_.doc>>

 - Gas OII Storage for Balancing Letter_.doc